Businesses Take Stock of Increased Costs
- 11th July 2025
Businesses across the UK are grappling with the ongoing impact of April’s National Insurance (NIC) increases and minimum wage rises. In response, many owners have put pay rises on hold and are exploring radical measures to stay afloat – including relocating operations overseas.
Employers have already been dealing with spiraling utility bills and supply costs in recent years, but the latest round of tax and wage changes has brought new financial strain. The above-inflation minimum wage rise, coupled with increased employer NICs, has led to a series of difficult decisions:
- Staff reductions and hiring freezes have become more common
- Many have cut employee hours to reduce overheads
- Automation and AI tools are being introduced to replace manual roles where feasible
In addition to tightening staffing budgets, most business owners are also having to raise prices to maintain profitability.
The mood among entrepreneurs has worsened following the announcement that from April 2026, the capital gains tax rate on business disposals will rise to 18%. This is a notable jump from the 10% rate previously enjoyed under Business Asset Disposal Relief and has hit confidence hard.
A recent survey of 500 UK business owners reveals that 40% are considering relocating abroad to escape rising taxes and operating costs. Popular destinations include Portugal, Greece, and the United Arab Emirates, where business conditions are often more favourable, and the cost of living – particularly private education – can be significantly lower.
Forrester Boyd Partner, Matthew Priest commented, ‘Business owners are facing a perfect storm of rising costs, shrinking margins and increased tax burdens. The sentiment shift we’re seeing is very real – many are exploring overseas opportunities not out of preference, but necessity. Strategic planning and advice have never been more important.’
Some business owners are exploring digital nomad visas for short-to-medium term moves, while others are taking advantage of golden visa schemes that offer longer-term residency in return for investment. Once considered the preserve of the wealthy, these options are now increasingly attractive to middle-income professionals and entrepreneurs alike.
The addition of VAT on private school fees in the UK is also pushing families to look at relocating, with the UAE emerging as a preferred option due to its favourable tax environment and high-quality international schooling.
You can read more in the full Business Owners Sentiment Surveys here:
https://www.swgroup.com/insights-events/insights/the-sw-business-owners-sentiment-survey/
All data and figures referred to in our news section are correct at the date of publishing and should not be relied upon as still current.
