“Tax on Ambition” Crushing UK Growth, Warn Business Leaders

Sky-high business rates are fast becoming one of the biggest brakes on UK growth, with companies cancelling investment, shelving expansion plans and holding back on hiring. New evidence from the Confederation of British Industry suggests the system is no longer just outdated—it’s actively damaging the economy. After recent revaluations sent bills soaring, firms say they are being punished for improving their premises and left unable to plan ahead. The warning is stark: without urgent reform, the UK risks stalling the very businesses it depends on for jobs, innovation and recovery.

Sky‑high business rates are choking growth and stopping firms from investing, hiring and expanding according to the Confederation of British Industry (CBI). It says the current system is putting the brakes on the UK economy and hitting companies of all sizes, not just its big business members, hard. It wants the Government to deliver the business‑rates reform it previously promised, as a matter of urgency. The CBI represents the biggest firms in the UK but also has an eye to what’s happening to the smaller businesses and how the behaviour of bigger firms hits their smaller suppliers.

BILLS SOARING AFTER REVALUATIONS

Business Rates

Business rates are based on the value of a company’s property. After recent revaluations, many firms have seen their bills shoot up overnight.

A new CBI survey of nearly 700 members found:

• Almost a third have cancelled, delayed or scaled back investment because of business rates

• The UK now has the highest property taxes in the OECD

• Property tax as a share of GDP is four times higher than Germany’s

For small and micro‑business owners already battling rising costs, it’s yet another hit.

FIRMS SAY THEY’D REINVEST SAVINGS

Three‑quarters of CBI members say high business rates are directly stopping them from investing.

More than half say they can’t plan long‑term because they have no idea what their future bills will be.

And 30% of firms say they’d reinvest 90–100% of any savings straight back into their business if the system were reformed. Money would go into productivity, automation, refurbishments, expansions and hiring.

Companies also point out that the system acts like a “tax on improvement” because if you upgrade your premises, your bill goes up.

‘A TAX ON AMBITION’

The CBI says the current setup is holding Britain back and uncertainty around business rates is causing “vital projects” to be delayed, scaled back or scrapped altogether.

Business rates under the current system are what the CBI calls “a major tax on ambition”. They hit and hold back firms that want to grow, modernise or go greener.

WHAT THE CBI WANTS CHANGED

The industry body is calling for:

• An end to the rule that any reform of business rates must raise the same total revenue

• A system that gives real relief, not just shifting costs between sectors

• Clearer, more transparent calculations so firms can plan ahead

• And the removal of “cliff edges” that cause sudden jumps in bills.

The message from businesses is simple: the current system is unpredictable, expensive and holding back investment.

For smaller firms, the impact is dire. It’s hard to plan ahead and invest in improvements, hire and grow or to survive the rising costs many have experienced due to the recent rise in business rates on top of all the other rising costs of doing business. Reform isn’t a “nice to have”. If the Government wants more people to start businesses, innovate, grow and create jobs reform of the system is essential and urgent.