UK Tax Rules: A Recipe for Business Slow‑Down, According to Azets
Azets, a leading UK accountancy group headquartered on London Bridge, has just released a fresh survey that paints a less-than‑pretty picture of how the tax regime is affecting business in the UK. With the Chancellor gearing up for the Spring Budget on March 6, the Azets Barometer January 2024 shows that businesses feel the tax system is leaning more toward inhibition than encouragement.
Key Figures at a Glance
- Business Growth: 4.7 (out of 10) – just below neutral
- Innovation: 4.8 (out of 10) – slightly better but still under 5
- Sustainability: 4.7 (out of 10)
- Talent Attraction & Retention: 4.7 (out of 10)
In plain English: the tax system isn’t exactly sparking a fireworks show of growth or innovation. The numbers are hovering just under the neutral “5” mark across the board.
Why Small Businesses Feel the Pinch
People with smaller turnovers report feeling inhibited, while businesses turning over £10–49.9 m are almost neutral, and those pulling £50–99.9 m feel a bit more positive (average 6.4 for growth). In short, the tax environment appears to favor the big dogs.
Voice of the Tax Head
Praveen Gupta, UK Head of Tax at Azets stresses the need for a progressive tax system that levels the playing field. He says:
“Simplifying incentives, taxes, and regulations is essential to create a more competitive landscape that rewards entrepreneurship and ambition. R&D tax credits, for example, are a key driver of innovation, but the scheme is in chaos. Businesses are paying more tax than ever, yet there is an obvious correlation between tax, regulation, and economic growth, and this ought to be a priority for this Government and the next.”
The Barometer’s Big Picture
The Azets Barometer is a new tri‑annual survey capturing the vibe of mid‑market, owner‑managed, and family‑owned businesses across the UK (and a few Nordic countries). The January 2023 edition, its first of the series, shows overall optimism at 5.6/10, but the UK segment stands out as the least upbeat at 5.1/10 for the next 12 months.
- 41% of UK respondents are moderately optimistic (scores 6+)
- 35% are pessimistic (scores ≤ 4)
- 24% remain neutral (score 5)
What worries businesses most:
- Economic uncertainty: 6.1/10
- Geopolitical risk: 5.7/10
- Talent recruitment & retention: 5.2/10
- Regulatory compliance: 4.9/10
Bottom line: while the tax regime isn’t a death sentence for businesses, it’s leaving many feeling like they’re fighting against a tide they can’t control. A streamlined, fairer tax system could turn these lukewarm scores into a roaring success story.
