Senior business figures have urged the government to refrain from raising employment costs in the forthcoming Autumn Budget, to prevent small and medium-sized enterprises ( SMEs ) from increasing prices.
A fresh report by Employment Hero reveals that 86 per cent of the 1,000 business leaders surveyed are apprehensive about the implications of the imminent Budget, with expectations of tax hikes by Rachel Reeves.
This follows a rise in employer national insurance contributions (NICs) from 13.8 per cent to 15.05 per cent, effective from 6 April.
More than half (59 per cent) expressed the sentiment that the º£½ÇÊÓƵ government overlooks the requirements of small businesses when formulating Budget decisions.
If Reeves decides to elevate employment costs again, such as employer NICs, it could "damage the government's mission to drive economic growth and control inflation", as reported by .
Almost half of businesses (49 per cent) indicated they would contemplate price increases if employment costs escalated, potentially adding "further inflationary pressure on the economy ".
If employment costs rise, over a third (33 per cent) of leaders said they would postpone hiring, and an additional 24 per cent would consider making redundancies.
Businesses, especially SMEs, have been voicing concerns about the impact the Employment Rights Bill will have on businesses at a time when many are facing difficulties.
The effects of Reeves' inaugural Budget last year are still a major concern for businesses, with 72 per cent of leaders stating that the announcement impacted their firms.
However, data from Employment Hero indicates that the º£½ÇÊÓƵ labour market's recovery is maintaining momentum, as employment rose by 2.3 per cent month-on-month in October, and is up 1.9 per cent compared to the same period last year.
Kevin Fitzgerald, º£½ÇÊÓƵ managing director at Employment Hero, said: "When you tax small businesses, you tax everyone.
"It creates a domino effect, higher costs lead to higher prices, fewer jobs, and less money in people's pockets. Small businesses employ the majority of our workforce. Make life harder for them, and you make it harder for Britain to grow.
"The Autumn Budget is an opportunity to learn from past mistakes," Fitzgerald said.
"If the government wants to continue this job growth and control inflation, they can't keep penalising the very businesses that power our economy. We simply can't afford a repeat performance. The way to get Britain working again is to back small businesses, not burden them," he added.
