Rising UK costs are impacting businesses as April’s NIC and minimum wage increases take effect, with around half freezing pay. Many owners are also considering moving abroad to escape rising UK costs.
Staffing
Businesses have faced many challenges, including high utility bills and increased costs. However, April’s changes are causing particular concern, with higher employer NIC costs combined with above-inflation minimum wage rises:
- Many business owners have had no choice but to cut staffing and pause recruitment.
- Staff hours are being reduced to manage costs.
- Where possible, businesses are starting to use AI tools and automation to replace roles.
To manage, many owners are planning price increases to stay afloat.
Additionally, the increase in the capital gains tax rate for entrepreneurs selling their business has harmed business sentiment. From April 2026, the rate will rise to 18% from the previous 10%.
Professional accounting support can help businesses manage rising UK costs while ensuring compliance and informed financial decisions.
Moving abroad
A recent survey of 500 business owners revealed that around 40% are prepared to move abroad to escape the UK’s challenging business environment. Countries with lower taxes often have lower living costs, which is important for families paying private school fees.
Several countries now offer long-stay digital nomad visas. For permanent relocation, some provide golden visas. Previously used mainly by high-net-worth individuals, these visas are increasingly utilised by middle-class families.
Golden visa schemes in Greece and Portugal remain popular. With VAT now charged on private school fees in the UK, the United Arab Emirates is becoming a preferred option for many families.
The full details of the Business Owners Sentiment Survey can be found here.