Business confidence has dropped for the first time in a year amid growing concerns over potential tax increases in the upcoming budget.
According to the latest business confidence monitor from the Institute of Chartered Accountants in England and Wales (ICAEW), confidence among businesses fell from 16.7 in the second quarter to 14.4 in the third quarter.
The survey, which gathered responses from 1,000 professional advisers up until September 20, revealed that 29% of respondents cited the “tax burden” as a key concern. The fall in confidence comes as speculation mounts that the government may introduce further tax hikes to shore up public finances.
Alan Vallance, CEO of ICAEW, said, “The findings show that businesses are troubled by the tax burden and increasingly reluctant to invest. As the UK prepares to host a major investment summit, and speculation mounts ahead of a difficult budget, the chancellor must give companies the certainty and stability they need.”
Business concerns over the tax burden come despite a broader easing of inflationary pressures. The survey showed that salary growth had slowed slightly to 3.6% year-on-year, the lowest rate in over two years but still nearly double pre-pandemic levels. Wage growth is expected to decelerate further over the next 12 months.
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