Rachel Reeves has been under fire for measures in her Budget (Image: Getty)
New research has suggested that concerns over payment defaults remain a “critical risk” for six in 10 of 1,417 UK surveyed as a backlash against policies continues.
The study also concluded that just under a third of respondents “don’t see any areas of and innovation for their business”.
It comes after announced on October 30 that the rate at which employers pay (NI) contributions (NICs) will rise from 13.8% to 15% on a worker’s earnings above £175 from April.
The point at which businesses start paying the levy, a major source of funding for the that also builds up entitlement to social security benefits, on each of their employee’s salary will be reduced from £9,100 per year to £5,000.
Further, there is set to be a 6.7% increase to the National Living Wage, which will be worth £1,400 a year for an eligible full-time worker.
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Parts of the research make for worrying reading (Image: Getty)
But credit insurer says 30% of businesses that took part in its research are “not identifying clear areas for growth or innovation, with economic uncertainty, lack of investment capital, and industry-specific challenges cited as barriers”.
The firm also detailed that, in response to rising costs, over half of the businesses that cannot absorb the Budget changes (57%) intend to increase prices.
Meanwhile, 36% plan to “absorb the costs at the expense of profitability”.
Experts added that “concerns around payment defaults also remain significant”, as 63% of the businesses are worried about the impact of late or failed payments. This rises to 74% as regards medium-sized companies.
The biggest post-Budget concerns, Atradius said, include increased inflation (46%) and rises in NICs (37%).
Although, the results also point to an “improving picture” for companies, with 65% “confident they can overcome additional costs associated with the Budget changes”.
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Ms Reeves says she wants to spark growth (Image: Getty)
In addition, 76% of the firms “will make hiring decisions driven by opportunities for growth” this year, findings suggest, compared to 30% of firms that are “making decisions based on increased costs from the Labour Budget”.
James Burgess, Head of Commercial and insolvency expert at Atradius UK, said: “With the financial outlook of the UK remaining turbulent, it’s understandable that businesses feel anxious about the changes that lie in the year ahead.
“However, it’s important for businesses to remain proactive. By consistently analysing market trends, focusing on customer retention, and investing in R&D to innovate products, businesses can better adapt to changing market conditions.”
Mr Burgess also mentioned the importance of employment. He added: “Strategic hiring is another vital component in equipping businesses to weather the storm.
“By continuously assessing the financial landscape, businesses can better protect themselves while also developing a skilled workforce. Additionally, the role of trade credit insurance cannot be overstated – it serves as a safety net that not only secures revenue streams but also enables sustainable expansion.”