The Budget: 'Raising tax on businesses could hinder UK growth'

The chancellor's plans to fill Britain's fiscal black hole by hiking tax on businesses could hinder UK growth, the boss of a South West chamber of commerce has warned.

Phil Smith, managing director of Business West, said although "hard decisions" had to be made by government, he was "really concerned" by Rachel Reeves' Budget announcement on Wednesday.

Under the plans, taxes will rise by £40bn - a large share of which will come from employers' national insurance contributions (NIC). From April next year, the amount companies pay on staff NIC will increase from 13.8% to 15%.

"The tax burden on the business community could hinder the government’s much sought after growth and undermine investment decisions," said Mr Smith. "Employer NIC increases will leave companies with less money to invest in their staff and business’s success."

The West Country chamber welcome measures for small businesses, including changes to the employment allowances and business rate relief for t