Business groups say the tax is likely to hurt the confidence of firms.

Confidence among UK firms is “down” as they face the “pressure cooker of rising costs and taxes”, according to a business group.

The British Chambers of Commerce (BCC) said its survey of more than 4,800 firms showed confidence had fallen to its lowest level for two years.

Almost two-thirds told the BCC they were worried about taxes after the Budget, which announced an increase in the National Insurance Contribution (NIC) paid by firms from April, and More than half expect prices to rise in the next three months.

A Treasury spokesman said more than half of employers would see either a cut or no change to their NI bills.

The focus has been on the strength of the UK economy following the release of disappointing growth figures just before Christmas.

The latest government data showed that the economy was Zero growth between July and SeptemberWhile It was signed during October.

The figures were seen as a blow to the government, which has made boosting the economy its top priority.

Labor has promised to deliver the most sustainable economic growth in the G7 group of the world’s richest nations.

Businesses have already warned that Budget measures such as increases in employer NICs, along with higher national wages, could lead to job cuts and price rises.

Kevin McNamee is chief executive of the Denver Group, a plastics manufacturer near Belfast, which employs 250 people.

He said the combined impact of changes to the minimum wage and national insurance would cost the company “millions of pounds, it’s really significant”.

He said it was “probably inevitable” that the prices of some of his goods would have to rise in an attempt to cover higher costs.

“The focus now will be on increasing productivity, reducing headcount or certainly not increasing headcount as the business grows and increasing that productivity.”

He added that businesses had been “surprised” by the changes to National Insurance.

“It’s hard to see how the budget encourages businesses to invest in growth, we’ve picked our pockets to a degree here.”

The BCC collected data from more than 4,800 businesses across the UK between 11 November and 9 December. It said 91% of the firms surveyed were classified as small and medium-sized enterprises, with fewer than 250 employees.

It found that 63% of firms are concerned about taxes. This was the highest level since 2017 when the business group began recording data, and was higher than the previous reading of 48 percent.

The BCC said confidence has fallen, with 49% of firms expecting sales to increase over the next year. The business group said it was the lowest level since the mini-budget in late 2022.

More than half of the firms surveyed – 55% – said they expected to increase their prices in the next three months.

“The alarming budget overruns are evident in our survey data,” said BCC Director General Shivn Havland.

“The pressure cooker of rising costs and taxes has eroded business confidence.

“Companies of all shapes and sizes are telling us that the rise in national insurance is particularly damaging. Businesses are already cutting back on investment and say they will have to raise prices in the coming months.”

A Treasury spokesman said: “We once again tabled a budget in Parliament to wipe the slate clean and give business the stability it so desperately needs.

“We have ensured that more than half of employers will see either no reduction or no change to their National Insurance bills, and by capping the corporation tax rate at the lowest level in the G7, pension mega By building funds and establishing a National Wealth Fund, we are bringing back political and financial stability, creating the conditions for economic growth through investment and reforms.

The spokesman added that this was just the beginning of the government’s transformational plans that would “improve all parts of the country”.