A record number of businesses in the UK are facing financial trouble ahead of Rachel Reeves’s Budget, according to new research by a business advisory firm.
The study from Begbies Traynor reveals that 632,756 firms were on the brink of collapse in the third quarter of 2023, marking a staggering 32 per cent increase from the same period last year.
This alarming figure also represents a 5.1 per cent rise from the previous three months, indicating a rapidly worsening situation for many companies.
The sectors hit hardest include support services, construction, and property, which reported the highest number of struggling businesses.
Record number of businesses on ‘verge of collapse’ ahead of Rachel Reeves’s BudgetGB NewsBusiness leaders are expressing deep concern about the upcoming Budget, with many “holding their breath” as they wait for the announcement.
Ric Traynor, chairman of Begbies Traynor, stated: “Many business leaders are holding their breath as they await clarity over what the forthcoming Budget will bring.
“The mood music in the lead up to the Budget has led many business leaders to expect companies and investors to bear the brunt of changes to the tax regime.”
Adding to the uncertainty, the Chancellor is reportedly considering an increase to employers’ National Insurance contributions.
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This potential tax hike, coupled with Labour’s proposed workers’ rights bill, has experts worried about the impact on hiring practices.
Julie Palmer of Begbies Traynor warned: “The knock-on effect [of the Budget] could be damaging for many businesses teetering on the edge of collapse.”
And it’s not just businesses who are apprehensive about the upcoming Budget.
As Brits scramble to protect their cash, GB News viewers have expressed their fears ahead of the announcements, with one pleading with Reeves not to “crucify” her disabled son by slapping VAT on his private schooling.
Chancellor Rachel Reeves will deliver Labour’s first Budget on Wednesday 30 OctoberPAWorried mum Sarah told The People’s Channel: “I’ve thought several times about leaving the country, but I have my son here in private school. He’s SEND (Special Educational Needs and Disabilities)”.
The mother had a scathing message for the Chancellor: “Don’t do it [apply VAT to private school fees]. You’re crucifying a child who will actually produce great results for this country.
“He’s British and he wants to get a good job. He wants to get A Levels and go on to university. He wants to contribute, dare I say, to economic growth.
“If you continue this, he will suffer as a result. This is not about equality. This is about damaging children who are already in education. I have chosen to spend my money on privately educating him and I should not be condemned for that.”
The panic comes as the UK is set to lose the largest amount of millionaires of any country over the next four years due to high rates and an overall unease about the economy.