BCC Survey Points To Business Failure And Job Losses To Come

by Amanda Banks, Tax-News.com, London

01 April 2003

A survey by the British Chambers of Commerce has found that one in five businesses are planning to lay off staff as a consequence of the increased tax burden contained in Chancellor Gordon Brown's economic policies.

One of the more visible tax hikes that is due to take effect from April 6 this year is the 1% rise in National Insurance contributions which is expected to raise £8 billion for increased spending, most notably on the National Health Service.

However, president of the BCC, Isabella Gordon has argued that the timing of the tax increase couldn't be worse. She asserts that businesses are already over-burdened with excessive regulation and tax, and that combined with a serious skills gap, the increase in the tax burden could be "the final nail in the coffin for some businesses."

The businesses likely to be most acutely affected by the measures will be small and medium sized firms, one third of whom are planning to cut jobs, according to the BCC survey.

Rather worryingly for the British government a significant number polled said they were considering pulling out of the UK and relocating their businesses offshore where regulation and the tax burden are lighter.

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