A record number of businesses are ‘teetering on the edge of collapse’ amid uncertainty ahead of the Budget.
Shock research yesterday showed thousands of British firms have been plunged into significant financial distress this year.
The figure soared by a third to nearly 633,000 companies in the three months to the end of September, when compared to the previous year.
Bosses are ‘holding their breath’ ahead of the Budget later this month amid fears that Rachel Reeves is plotting a tax raid on businesses. The Chancellor is considering an increase to employers’ National Insurance contributions.
Experts warned Labour’s workers’ rights bill will cause ‘further pain’ for businesses by making it more difficult and expensive to hire staff.
A record number of businesses are teetering on the brink of collapse ahead of Rachel Reeves’ Budget
Businesses are holding their breath amid concerns that the Chancellor is planning a tax raid on firms
According to the research by business advisory firm Begbies Traynor, 632,756 firms faced financial trouble in the third quarter of the year. That was 32 per cent more than the same period last year and a 5.1 per cent increase on the previous three months.
The support services, construction and property sectors had the highest number of companies struggling.
Begbies Traynor chairman Ric Traynor said: ‘Many business leaders are holding their breath as they await clarity over what the forthcoming Budget will bring.
‘The mood music in the lead up to the Budget has led many business leaders to expect companies and investors to bear the brunt of changes to the tax regime.’
Julie Palmer, also of Begbies Traynor, added: ‘The knock-on effect [of the Budget] could be damaging for many businesses teetering on the edge of collapse.’