Rising taxes, operational pressures, and economic uncertainty drive UK business owners to consider redundancies and hiring freezes

UK businesses are bracing for a challenging year as the Autumn Budget looms. A recent report reveals that almost four in ten business owners expect to make redundancies in the next 12 months, while a similar proportion plan to implement hiring freezes to cushion the impact of potential tax rises.

The findings come from S&W’s The BOSS (Business Owners Sentiment Survey), which surveyed 500 UK business owners with turnovers exceeding £5 million. The survey paints a picture of widespread unease, fueled by last year’s Autumn Budget, which increased employer National Insurance contributions and tightened fiscal policy.

Redundancies on the Horizon

The report highlights that 37% of business owners expect job cuts, while 39% foresee a hiring freeze, signaling a deepening confidence crisis across sectors. Retail, hospitality, communications, and healthcare are among the industries feeling the strain as employment costs rise and margins tighten.

“Tighter tax policies risk driving more of the UK’s most successful businesses abroad,” warns Toby Tallon, Tax Partner at S&W. With operational pressures mounting, entrepreneurs are questioning whether the UK remains a stable environment for growth.

Business Owners Eye Overseas Moves

The survey also shows that 41% of business owners are considering relocating operations overseas if further tax increases materialize. Proposed changes such as the extension of inheritance tax to pensions from 2027 and cuts in business property and agricultural reliefs are intensifying concerns.

For many, moving abroad is no longer a last resort but a practical response to economic uncertainty, rising costs, and the threat of additional tax burdens.

Drivers of Uncertainty

The drop in confidence is fueled by a combination of factors: recent tax policy shifts, rising operational costs, supply chain pressures, higher wage expectations, and persistent skills shortages. Insolvency levels continue to climb, and hiring slowdowns are now spreading beyond traditional sectors like retail and hospitality.

Industry groups are urging the Chancellor to deliver a pro-growth, supportive Budget that restores confidence, avoids unnecessary redundancies, and keeps the UK competitive for SMEs.

“Bold policies are needed to give entrepreneurs confidence and keep Britain open for business while staying fiscally responsible,” stresses Tallon.

Conclusion

As UK business owners weigh the costs of taxes, inflation, and economic uncertainty, the November Budget could determine the trajectory for jobs and hiring across the country. Share your thoughts on how UK policy impacts your business or comment on strategies to weather these challenges.