The UK’s position in the EU, rising interest rates and tax increases are among the biggest concerns for businesses in 2016, a survey has found.
The Institute of Chartered Accountants in England and Wales (ICAEW) polled its members on what they thought would affect businesses this year.
The questions featured a range of scenarios, involving the economy, skills, immigration and the political landscape, and asked whether each would have a positive or negative impact.
Key survey findings include:
- 44 per cent are concerned about the negative impact of growth in Europe, down from 56 per cent in 2014
- 52 per cent say they will be negatively affected by a rise in interest rates this year
- 36 per cent expect low inflation to have a positive effect
- 41 per cent believe that uncertainty about the UK’s position in the Eurozone will have a negative effect
Regulatory and tax changes are expected to pose a threat, with businesses believing the following will have a negative impact:
- Increase in the national minimum wage – 29 per cent
- Higher standard rate of VAT – 53 per cent
- Rise in income tax – 51 per cent
Changes will challenge businesses
Stephen Ibbotson, director of business for the ICAEW, commented: “Next year will throw up a number of changes for businesses and they are rightly concerned about them. The reliance on domestic sales for UK growth is highlighted by the negative impact any interest rate increase would have.
“New Year resolutions for more exports continue to be challenged with slow growth in the Eurozone and developing countries.
“This is more worrying when so much emphasis has been placed on exports and rebalancing the economy. The dependence on domestic and consumer sales could mean a car crash for the UK economy in 2016 if sudden and unexpected hazards appear in the road in 2016.”