UK businesses are considering relocating operations abroad to secure more stable tax and regulatory landscapes, according to new research from consulting firm Baker Tilly International.
Survey reveals UK firms' concerns
The group's annual mid-market survey, conducted earlier this year, found that among all nine markets surveyed—including the US, China, and India—UK firms were "most likely" to move operations to markets with "more predictable tax and regulatory environments." The study covered 1,500 business leaders globally.
Among UK organisations, 39 per cent have delayed or cancelled major investments due to "uncertainty caused by rapid policy changes." The survey was conducted between January and March this year, before the latest political turmoil in Downing Street, which saw calls for Prime Minister Keir Starmer to resign and several Labour ministers stepping down.
Trend towards instability
Francesca Lagerberg, Baker Tilly's chief executive, told City AM that despite the research pre-dating recent political events, "there is clearly a trend" among British businesses worrying about market stability. "We have 39 per cent of UK organisations delaying, or in some cases even cancelling, major investments just because they want to know where the world is going," Lagerberg said.
The findings also show that UK business leaders are "the most negative" of all respondents about the economy's future, pointing to consistent unease about market stability.
UAE stands out as stable alternative
In contrast, companies in the United Arab Emirates reported the lowest level of market disruption from political swings among all countries surveyed and are the least likely to defer investment, despite the ongoing Iran War. Lagerberg noted that the UAE is "quite stable in terms of business, despite disruptions and conflict," contrasting with the UK which is "experiencing a little more of a rollercoaster ride through the economic ups and downs."
The UAE is a renowned global business hub due to its attractive, tax-efficient landscape with lower regulatory limits.
Future regulation concerns
Over 60 per cent of those surveyed believe regulation will "become more onerous and prescriptive" in the UK by 2035. Lagerberg called this "not a surprise," considering the arguable over-regulation of many sectors. She noted that the financial services industry is "particularly worried" about market instability and regulation impacting business, especially given the recent uptick in cyber risk.
