UK business leaders are bracing for further tax increases, despite Chancellor Rachel Reeves already implementing a substantial £26 billion tax raid in her second Autumn Budget delivered on Wednesday, 28 November 2025.
Business Confidence Plummets Post-Budget
A significant survey reveals deep anxiety within the business community. The 'Business Confidence Barometer' from WPI Strategy and Merlin Strategy, which polled 500 business leaders after the Budget, found that over two thirds of top bosses fear being targeted with more tax hikes.
This pessimism is having a direct impact on company plans. A majority of leaders stated they would make fewer hires than previously planned, with one in three directly blaming the Budget for this decision. Some warned that this stall in hiring could reach levels not seen since the Second World War.
Key Policies Causing Concern
Business bosses identified the freeze on income tax as the most damaging policy introduced by Labour. This move is widely viewed as breaking the government's 2024 manifesto pledge. Nearly half of the surveyed leaders said this stealth tax would negatively impact both their staff and their businesses.
The Budget's impact was not uniform across all sectors. A number of businesses bore the brunt of the changes, with the gambling industry facing new taxes and the Chancellor being accused of botching her reform of business rates.
The negative sentiment was echoed in a snap poll from the Institute of Directors, which covered over 500 business leaders. Anna Leach, chief economist at the Institute, said: "This Budget has landed badly with business leaders." She added that firms reported the measures would hit hiring and investment, with many planning to review pension arrangements.
Underlying Fiscal Fears
Despite the avalanche of new taxes, the UK's underlying financial position remains a core concern. Economists have warned the country was left in a "relatively weak fiscal position" due to the debt-to-GDP balance being well above levels from two decades ago.
Michael Saunders, a former Bank of England rate-setter and now senior economic adviser at Oxford Economics, stated: "The UK is still not securely on a sustainable fiscal path." The official fiscal watchdog also cautioned that the Budget still leaves the UK public finances vulnerable to future shocks.
It is this fundamental vulnerability that continues to fuel business fears that Rachel Reeves will return for more tax rises, despite her pledges to the contrary in this year's Budget. Firms are still reeling from the Labour government's first Budget, which hiked employer's national insurance contributions by 1.2 per cent.
As Anna Leach concluded, "After a prolonged and messy Budget period, businesses remain unconvinced by the government’s growth strategy." The business community now watches with apprehension, fearing that further fiscal demands are on the horizon.
