Following increases to National Insurance Contributions (NICs) and the minimum wage in April, businesses in the UK are responding to their rising costs.
Around half of businesses are freezing pay, while many other owners are even considering moving abroad to escape the high tax environment in the UK.
Business sentiment has also taken a blow from increased Capital Gains Tax for entrepreneurs disposing of their companies, which will go up from 10% to 18% in April 2026.
Here’s how a significant proportion of UK businesses are handling these issues.
Reducing costs with staff cuts
There have been many challenges for UK businesses in recent years, including high utility bills and inflation – but the changes that took effect in April are particularly pressing concerns.
In attempts to reduce their operating costs, many business owners are cutting staff levels and limiting recruitment, while also reducing staff hours. Some companies are even starting to replace jobs with cheaper automation and AI tools where possible.
In addition to cutting back on staffing costs, most businesses also plan to increase their prices.
Moving businesses abroad
According to the Business Owners Sentiment Survey, around 40% of several hundred owners said they were prepared to move abroad to avoid the challenging tax environment in the UK.
Many other countries not only have lower taxes, but also lower living costs. This is especially attractive for individuals with families who are concerned about private school fees.
Some countries offer ‘digital nomad visas’ for long stays, while others have ‘golden visas’ as a more permanent relocation option. These schemes are being used more often by middle class families, especially in places like Greece, Portugal, and the United Arab Emirates.
Take stock of your business accounts with gbac
With many UK business owners freezing recruitment and expansion or thinking about moving their business to another country, it can be a daunting time to run a company.
However, staying on top of your business costs and knowing where to make savings can be much easier when you come to professionals like gbac to manage your accounts.
Our accountants in Barnsley can provide a range of efficient financial services to ensure your records are accurate and that you’re optimising all the available allowances and reliefs.
For more information about our services for business owners, get in touch by calling 01226 298 298, or email info@gbac.co.uk and we’ll get back to you with more details.