Business Owners Criticize Tax Hike, Urge Chancellor Not to Stifle Growth
Entrepreneurs and family business owners have expressed serious concern over the recent tax hikes announced in the Budget, warning the government not to discourage their passion for growth.
Criticism has focused on measures they believe will have a major impact on their businesses, including employer contributions to National Insurance, changes to family inheritance tax, and reductions in capital gains tax.
Craig Bunting, founder of Bear Coffee, which employs 130 people across eight restaurants in the Midlands, said the Budget measures would have a “huge impact” on his £5.5 million business. He estimates an extra £200,000 a year in costs due to the rise in employer National Insurance contributions from 13.8% to 15% from next April. The threshold at which employers start paying this tax will also be lowered from £9,100 to £5,000, affecting more part-time workers.
Bunting expressed his sadness, saying, “I don’t want to be exploited because I’m interested in building something meaningful, employing people and creating good jobs.” He stressed that the unexpected changes, particularly the inclusion of low-wage and part-time workers in the National Insurance scheme, were “unreasonable changes” that could affect prices for customers and deter new businesses.
Farmers also protested in Westminster against making family farms pay inheritance tax from April 2026. For decades, agricultural and business property has been exempted for long-term ownership. Family business owners such as Stuart Paver, chairman of York-based shoe store Pavers, echo these concerns. He pointed out that the imposition of inheritance tax on family companies conflicts with the government’s policy of promoting long-term investment and economic growth.
Paver highlighted the potential financial difficulties for a £1 million-turnover family business, highlighting how inheritance tax obligations can eat into profits intended for reinvestment and shareholder returns over many years. “It makes no sense to hold shares and transfer them,” he said, suggesting that this could lead to more sales to private companies with short-term goals.
Nicky Walker, managing director of Walker’s Shortbread, took a measured view but admitted the Budget had led to a review of their three-year investment plan. “Even though there is a lot of noise when the government comes in to not raise taxes, you always think that it will happen. How will the government release the money?” he commented.
Walker noted that while the tax increase comes after years of challenges for businesses, the certainty allows for better planning. However, he acknowledged that these measures could affect future investments and shareholder benefits, which could lead to difficult negotiations between family-owned companies.
The National Living Wage is also expected to rise by 6.7% to £12.21 next April, adding to financial pressures on businesses. Businessmen urge the government to look into these measures, warning that they can hinder growth, discourage investment, and have a negative impact on employment.
