Small business owners up and down the country are packing their bags to escape a flurry of higher taxes, soaring costs and red tape, fresh data has found.
Nearly two in five owners of small and medium-sized firms (SMEs) have either left the UK or are considering an imminent departure, according to a new survey, in a shift that would likely sap Britain of its entrepreneurial spirit.
The majority of those who said they were considering leaving planned to do so within the next two years as a brain drain crisis looms.
The survey of 200 owners, commissioned by Handelsbanken Wealth & Asset Management, said that around half of owners said better financial conditions in other countries appealed to them.
Spain topped the list of firms’ most desirable destinations, followed by the United States and France. Dubai was also seen as a place owners wished to move to.
SMEs have come under intense pressure amid rising costs in employment and high taxes.
The rise to the national minimum wage and sweeping changes to worker’s rights could wreak havoc on SMES as a third of firms recently surveyed by the Federation of Small Businesses (FSB) said that they expected staff numbers to be shed.
Just one in ten small businesses said they planned to hire more staff, the survey also showed.
The tax burden is predicted to rise to 38.3 per cent in 2027, according to the Office for Budget Responsibility (OBR), beating highs seen in previous months. The intensifying strain on income is making people more cautious with their spending and stifling investment.
The mass departure of SME owners would follow that of dozens of non-doms, who have lost their tax status.
Recent research by the Adam Smith Institute estimated that the exodus of non-doms could cost the UK economy over £100bn if some 7,000 individuals who had non-dom status leave.
London is already suffering from an outflow of entrepreneurs and investors as research by Henley & Partners found that only Moscow had lost more ultra-high net worth individuals than London in the last 12 years.
Many SMEs hopes Chancellor Rachel Reeves’ recent Spring Statement would bring some relief but firms were left disappointed.
Kevin Fitzgerald, UK managing director at Employment Hero, said the government had failed to support small businesses.
