Businesses are preparing to slow hiring as a result of measures in Rachel Reeves' Budget, which puts Britain on course for a record tax burden, a new snap poll suggests.
Some 56% of business leaders said there were likely to be fewer hires than originally planned.
The poll of 500 business leaders was carried out by WPI Strategy and polling firm Merlin Strategy to gauge sentiment among businesses in the immediate aftermath of Wednesday’s Budget statement.
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Businesses were largely spared from targeted tax hikes, unlike last year’s autumn Budget which set out an increase to the rate of employer national insurance.
However, a range of measures – including extending a freeze on income tax thresholds for another three years, and hiking the national minimum wage from April – are thought to indirectly affect firms including by reducing the amount of cash they can allocate to growing.
Furthermore, larger properties worth more than £500,000, including supermarkets, are also facing a new business rates “surtax” to help fund a permanent discount for smaller retail, leisure and hospitality firms.
The extended freeze on income tax thresholds is seen as the most damaging impact of the Budget, with 47% of business leaders saying it will have a negative impact on their business and staff, the survey showed.
Despite this, 45% said it was a justified measure to raise revenue.
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The move, which keeps current thresholds the same until April 2031, is expected to raise £7.6 billion for the Treasury by 2030.
The poll also showed that 56% of respondents felt it would have been better for the Government to raise income tax but leave all other taxes as they are.
Meanwhile, about two-thirds of business leaders fear they will be targeted with further tax rises in the near future.
Martin Beck, chief economist for WPI Strategy, said the findings “reinforce the sense that the Budget has done little or nothing to jump-start growth”.
“The Budget may not have significantly worsened the mood among firms, but it’s done nothing to lift corporate confidence, which is essential if firms are to feel able to invest, expand and hire,” he said.