As the UK anticipates the upcoming autumn budget, CFOs across industries are voicing concerns over possible tax hikes that could strain businesses and potentially drive some owners to relocate overseas. With Prime Minister Sir Keir Starmer cautioning that this budget will be “painful,” finance executives fear impacts on investments and growth, particularly if Corporation Tax and Capital Gains Tax rates are raised. This sentiment was echoed in a recent survey of iFD’s community of part-time and fractional CFOs, where the mood was described as one of “nerves.”
iFD is a division of Isosceles Finance and part of the PE-backed Dains group of companies, a £65m group employing around 650 people with offices throughout the UK.
Greg Eaton, Managing Director at Isosceles Finance, highlighted the apprehension among finance leaders: “Our community of Fractional CFOs are clearly worried about the impact of the upcoming budget on the businesses they support. They would like to see more support for innovation to enable growth and are concerned about the impact a rise in Capital Gains Tax would have on investment.”
CFOs are keen to see specific budget measures that could bolster business stability, particularly through reforms on business rates, enhanced research and development (R&D) tax reliefs, and improved tax breaks for those investing in R&D. These are seen as essential steps to drive innovation and ease burdens on smaller businesses. Many also advocate for increased grants and investments focused on skills training and support for climate change initiatives to foster sustainable growth.
However, one CFO voiced the fear that “easy targets such as successful businesses and individuals will be targeted again, leading to them possibly moving away from the UK.” Speculation is also mounting that Chancellor Rachel Reeves could impose an ‘Exit Tax’ to counter any business exodus, although CFOs warn this could discourage high-net-worth individuals from remaining in the UK.
Interestingly, one CFO saw a silver lining, expressing optimism about Starmer’s approach to spending restraint: “Unlike the past Labour governments, it seems that Starmer’s government will not just spend and give money away…so I’m less fearful than with other Labour governments in the past.”
With tax increases and fiscal changes potentially in the cards, UK CFOs are bracing for the autumn budget’s outcomes, while calling for policies that could sustain business growth and safeguard the UK’s competitive economic standing.
