Key facts
- The CBI urged the government to cut business costs, citing higher taxes, energy bills, and regulatory burdens.
- Employer national insurance contributions rose 28% year-on-year to £123.1 billion in 2025-26.
- UK non-domestic electricity prices were 45% above the G7 median in 2023-24.
- The British Chambers of Commerce proposed cutting employer National Insurance for under-25s and reducing energy taxes and business rates.
- BCC research indicates domestic policies have increased SME costs by over 70% in the last decade.
Retailers and business groups are urging UK Chancellor John Healey to prioritize cutting business costs in his upcoming budget, citing increased taxes, energy prices, and regulatory burdens as significant pressures hindering investment and growth. The Confederation of British Industry (CBI) and the British Chambers of Commerce (BCC) have both submitted proposals to the government.
The CBI's report found that businesses paid almost £345 billion in taxes in 2025-26, a 12.7% increase from the previous year, representing 31.3% of all UK tax receipts. Employer national insurance contributions, increased in the 2024 budget, rose to £123.1 billion in 2025-26, a 28% year-on-year increase, and have overtaken corporation tax as the largest single source of business tax revenue. The report also noted that UK non-domestic electricity prices were about 45% above the median of G7 countries in 2023 and 2024.
CBI chief executive Rain Newton-Smith warned that when firms absorb higher taxes, energy bills, and regulatory costs, the consequences include weaker investment, fewer jobs, and less scope for wage increases. The CBI identified four barriers to investment: labour and energy costs, fragmented rules, regulatory friction with the EU, and tax complexity. They called for budget measures to ease pressures from employment costs, energy bills, and business rates.
The BCC echoed these concerns, with its research indicating that domestic policies have increased the cost stack facing a typical small or medium-sized business by over 70% in the past decade. The BCC proposed cutting employer National Insurance contributions for under-25s, reducing energy taxes and business rates, and enhancing export support for SMEs. They suggested these measures could be partly funded by replacing the pensions triple lock.