Bridging the Divide:

Taxes on business sale was the top tax reform priority for businesses in East Anglia, cited by 61% of respondents – an even higher rate than the national average. Employment taxes (39%) were less of a concern for them than corporation tax (52%), profit distribution taxes, such as taxes on dividends (45%) and indirect taxes, such as VAT (45%).

Business Leaders in East Anglia chose investment incentives as the policy initiative that Parliament should prioritise to better support British businesses. Two out of five respondents in the region (41%) identified these incentives as a priority – a higher percentage than in any other region. This finding suggests that businesses in East Anglia currently lack the confidence to invest.

Meanwhile, over a third (34%) of East Anglian Business Leaders thought Parliament should prioritise ease of international trade – a higher figure than the national average (30%). East Anglia is therefore more aligned with MPs (39%) on the importance of easing international trade than many other region. The region is, however, strongly misaligned with MPs on the issue of productivity. While 38% of MPs believe that prioritising productivity would be helpful to British businesses, only 23% of Business Leaders in East Anglia think the same.

The findings also revealed that Business Leaders in East Anglia had some of the lowest confidence levels in Parliament. On average, 44% of businesses in East Anglia expressed low confidence in Parliament. These findings represent some of the lowest confidence levels in the country, alongside the South East (44%).

Business Leaders in Greater London rank business rates bottom of their list of tax reform priorities and are even less interested in reforming them than leaders in most other regions. With London being the powerhouse of the UK economy, this is stark finding – particularly since MPs have identified business rates as their top priority for tax reform.

Greater London Business Leaders are concerned about reducing interest rates and inflation (cited by 37%), the overall tax burden (cited by 36%), access to a highly skilled workforce (34%) ease of international trade (28%), incentives to meet sustainability goals (27%) and productivity (26%).

These findings might seem somewhat surprising given London is the most productive region in the UK and is renowned for its deep talent pool. It may be that London Business Leaders are wary of losing these competitive advantages, however, which is why they want Parliament to prioritise them. Unfortunately, they are not entirely aligned with MPs in terms of their priorities. While MPs recognise the importance of skills and productivity, they are far less inclined to prioritise access to utilities (9%) as a strategy to support British businesses.

Interestingly, when it comes to confidence in Parliament, Business Leaders in London were found to have greater confidence in Parliament than MPs, with 74% of Business Leaders believing they would deliver on the needs of their businesses.

The overall tax burden is a huge concern for Business Leaders in the South East, with 55% saying that Parliament should prioritise this as a way to support British businesses. Here there is a clear gulf with MPs, since just 16% of MPs take the same view.

Business rates is the tax that Business Leaders in the South East are most concerned about (50%). This is followed by corporation tax, indirect taxes such as VAT, and profit distribution taxes (all 45%). In fact, they are more worried about business rates than their peers in most other regions. This may be because premises in the South East have a high rateable value (a value based on how much it would cost to rent a property for a year).

Another major concern for Business Leaders in the South East is reducing interest rates and inflation, with 38% believing this should be a priority for Parliament. Again, there is a misalignment with MPs, however, since only 23% of MPs share that perspective.

Business Leaders in this region were also found to have low confidence in Parliament (44%). These findings represent some of the lowest confidence levels in the country, alongside the East of England (44%) and the West Midlands (40%).

Business Leaders in the South West cite corporation tax as their greatest tax concern. Nearly two-thirds of Business Leaders in the region (64%) believe the tax on company profits should be a priority for reform. Their next biggest priority is reform of taxes on business sale, with three out of five (61%) Business Leaders believing these should be overhauled. These two taxes were by far the most popular taxes to be reformed by Business Leaders in this region, highlighting a clear priority. The next closest taxes for reform (employment taxes, Indirect taxes) had 22% fewer votes (39% for both).

The findings highlight a clear divergence between the views of South West Business Leaders and MPs. Less than a fifth (19%) of MPs would prioritise corporation tax for reform, while just 32% would prioritise taxes on business sale.

Businesses in the South West appear to be under considerable financial pressure at present. From a policy perspective, South West Business Leaders would most like to see policies that help to reduce interest rates and inflation (58%) and policies that address the overall tax burden (42%). Yet neither of these policies feature among MPs’ top five priorities.

Despite this, Business Leaders in the South West have higher levels of confidence in Parliament’s ability to both understand and deliver on the needs of their businesses. 85% of businesses in the South West expressed high confidence in Parliament, representing some the highest parliamentary confidence levels, among Business Leaders, in England, alongside Yorkshire (82%) and London (77%).

In both the East and West Midlands, employment taxes are Business Leaders’ greatest priority for tax reform. Overall, 65% of Business Leaders in the West Midlands would like to see employment taxes reformed – a higher figure than for any other region. Three out of five Business Leaders in the East Midlands (59%) feel the same way.

These findings suggest that employers in the Midlands are heavily impacted by the hike in employer national insurance contributions, which takes effect in April – alongside a rise in the national minimum wage. MPs appear to underestimate the impact of national insurance contributions on businesses, however, with just 22% prioritising employment taxes for reform.

In terms of other policy priorities, employment and skills is a major concern for nearly half (49%) of East Midlands Business Leaders. They are also keen for policies that reduce interest rates and inflation and address the overall tax burden (both 32%).

Like their peers in the East Midlands, West Midlands Business Leaders are most focused on policies that promote employment and skills (35%). They also want policies that support healthy workforces (33%), ease of international trade (31%), and access to utilities (31%). While West Midlands Business Leaders are aligned with MPs on many of these areas, including skills, access to utilities does not feature highly on MPs’ radars (9%).

The data also showed low levels of confidence in Parliament’s ability to understand or deliver on the needs of their businesses in the West Midlands (40%). These findings represent some of the lowest confidence levels in the country, behind the East of England and South East (both averaged at 44%)

The West Midlands, the North East and the North West were the only regions where corporation tax did not make Business Leaders’ top three priorities for tax reform.

Nearly half (47%) of Business Leaders in the North West and 40% of Business Leaders in the North East, believe that reducing interest rates and inflation should be a policy priority for Parliament, just 23% of MPs said the same.

In the North East, Business Leaders’ second-greatest concern – after reducing interest rates and inflation – is improving transport links (37%). This finding reflects the comparatively poor transport links in the region, with public transport often being infrequent and unreliable.

For businesses operating in the North East and North West, the overall tax burden is also a significant issue. More than a third (34%) of Business Leaders in the North East believe it should be prioritised, while 35% of those in the North West say the same. In contrast, just 16% of MPs see reducing the overall tax burden on businesses as a priority.

In line with the national research findings, Business Leaders in the North East cite taxes on business sale as the taxes they would prioritise for reform (60%). In contrast, Business Leaders in the North West are most concerned about employment taxes, with 51% prioritising reform of these. As with the East and West Midlands, employers in the North West appear to be feeling the impact of the rise in employer national insurance contributions.

Interestingly, like the West Midlands, the North East and the North West were the only other UK regions where corporation tax did not make Business Leaders’ top three priorities for tax reform.

Business Leaders in Yorkshire & the Humber believe taxes on business sale should be the top priority for tax reform – in line with the national trend. Overall, 59% would prioritise reform of these taxes. Their second-greatest tax concern is employment taxes (46%), which suggests their businesses are heavily affected by the rise in employer national insurance contributions. Reform of corporation tax is a priority for two out of five (41%) Business Leaders in the region.

MPs’ top three priorities for tax reform are business rates (62%), taxes on business sale (32%) and profit distribution taxes (31%). So, Business Leaders in Yorkshire & the Humber and MPs are only aligned on taxes on business sale being a priority for reform, with Business Leaders feeling far more strongly about this than MPs.

Reducing interest rates and inflation is by far the biggest business priority of Business Leaders in Yorkshire & the Humber (48%). In fact, this figure is higher than for every UK region other than the South West. It suggests that business margins in the region are being squeezed by today’s challenging trading environment. The next greatest business priority for Business Leaders in Yorkshire & the Humber are the overall tax burden and ease of international trade (both 35%).

Business Leader in Yorkshire were also seen to have higher levels of confidence in Parliament. 82% of businesses in Yorkshire expressed high confidence in Parliament’s ability to both understand and deliver on the needs of their businesses, representing some the highest parliamentary confidence levels, among Business Leaders in England, alongside the South West (85%) and London (77%).