A new report of 114 business leaders by personalised workwear firm MyWorkwear reveals the 'bleak' outlook facing companies across the UK in the wake of Rachel Reeves’ proposed tax changes.
77 per cent of bosses are actively concerned about the rise in costs, with 75 per cent predicting that they will have to pass these onto their customers - potentially leading to higher consumer prices and a rise in inflation.
“The findings of our report should send a chilling message to the Chancellor on how industry is going to react to the April tax changes," commented James Worthington, Co-Managing Director at MyWorkwear.
“The economic growth she is crying out for is set to be strangled, with firms more interested in investing in automation over people and, tellingly, ‘recruitment’ set to be halted by more than half of the manufacturing companies questioned.
“As a workwear supplier we tend to be a good barometer for economic sentiment, working with tens of thousands of companies across a range of industries including manufacturing and engineering, hospitality, agriculture and construction. The anecdotal feedback we were hearing on the ground has been reflected in the results of this latest report.”
In addition to the planned tax changes, the report also posed questions about other challenges facing businesses heading into the 2025 financial year.
A staggering 47 per cent of manufacturers named inflation as the biggest factor impacting their business struggles, closely followed by rising utility costs (30 per cent). Lack of skilled labour was the third most popular reason (21 per cent), with just one in ten respondents stating reduced Government support is holding them back.
“As a small business, the upcoming increase in employer National Insurance Contributions and minimum wage will have a huge impact," Worthington added.
“We’re expecting to incur additional costs of around £100,000 as a result of these changes and are currently looking at new commercial activities and pricing structures to ensure we can absorb these costs without passing the hikes on to our customers - except for our annual increase.”
MyWorkwears' 2025 Economic Report can be downloaded and read in full here.
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