‘Cost of business crisis’ as government drives up expenses by 70 per cent in a decade
British companies are facing a “cost of business crisis” as a string of controversial government policies have pushed up an average firm’s expenses by 70 per cent in a decade, one of the country’s largest industry bodies has found. A typical-mid-sized firm is now paying roughly £827,000 more a year than they were in 2016 [...]
A prominent industry body in the UK has revealed that British companies are experiencing a "cost of business crisis" due to a series of government policies that have increased an average firm's expenses by 70% over the past decade. The British Chambers of Commerce (BCC) has unveiled a new business cost calculator that estimates the impact of domestic policies on companies, revealing that the average mid-sized firm is now paying £827,000 more annually since 2016.
A significant contributor to the rise in costs is the decision by former Chancellor Rishi Sunak to increase national insurance contributions for employers in her 2024 budget, which aimed to generate an additional £25bn in government revenue. This tax hike raised the rate for companies from 13.8% to 15% and lowered the salary threshold at which firms begin paying the levy to £5,000.
BCC deputy director David Bharier described the mounting cost burden as an "inflection point" that has "priced many firms out of growth," leading to a loss of confidence and a defensive posture in many SMEs. Other factors contributing to the increased expenses include higher minimum wages, pension schemes, and auto-enrollment contributions.
The BCC has launched its cost calculator to help businesses assess the impact of government policies on their expenses. In light of the upcoming election and the Labour Party conference, industry leaders are urging the new government to prioritize pro-business policies and implement a "growth delivery test" for all proposals.
Written by urgent.news from City AM's reporting — not their text. Machine-written — it may contain errors, so check the original before relying on it.
