Businesses bear the brunt of huge tax-raising Budget
Shropshire Chamber of Commerce says many businesses will be faced with ‘hugely escalating cost pressures’ following yesterday's tax-raising Budget.
Chancellor Rachel Reeves outlined a plan to raise more than £40 billion in new taxes – with the business community being asked to shoulder around two thirds of the burden.
Ruth Ross, chief executive of Shropshire Chamber, said: “Confidence is still brittle in our economy, and we needed a Budget which gives Shropshire businesses the confidence to invest, and the ability to thrive.
“There is no doubt that the rise in National Insurance for employers, on the back of the announcement of an above inflation increase in the National Minimum Wage, will put a big dent in profitability and be a big worry to many employers.
“The likelihood is that some of these additional costs are now going to be passed onto customers, which could in turn put pressure on inflation.”
She added: “This is the largest tax-raising Budget in a generation, and businesses – many of which are still struggling to recover from the ravages of the pandemic - are being asked to shoulder the biggest burden.
“I’m concerned that raising the rate and lowering the threshold for employers’ National Insurance ill particularly hit Shropshire companies which are employing lower paid workers.
“Combined with the increase in the National Living Wage and other measures associated with the Make Work Pay agenda, many of our businesses will see hugely escalating cost pressures.”
Ruth welcomed some of the announcements in the speech, including a decision to freeze fuel duty – particularly important for rural areas – a tax cut on draught beers to help the pub trade, and business rate relief for the retail, hospitality and leisure industry.
But she added: “We would have liked to have seen a root-and-branch revamp of the business rates system to help our high street traders to compete on a level playing field with online retailers. This is long overdue, and has been swerved again.”
In latest Shropshire Chamber of Commerce quarterly economic survey, businesses warned that tax rises may lead to disinvestment, or low investment in areas such as training.
Overall, the number of Shropshire businesses reporting a rise in domestic sales was down by 8% on the previous three months, with those predicting future sales growth down by 14%.
