Tom Jauncey started his business in the UK as a teenager eight years ago, but now says policies introduced in last month’s Budget are making him consider moving his business elsewhere.

The chief executive of London-based digital marketing agency Nautilus Marketing said the increase in the minimum wage and national insurance, as well as an increase in capital gains tax (CGT) At Chancellor Rachel Reeves’ first tax event last month, it was harder to justify staying in the UK.

Mr Jauncey, 25, who set up his agency in 2016, said that since the budget “it’s like one hit after another for small business owners”, and he plans to soar and settle in Cyprus.

Among other policies, Reeves told the House of Commons on October 30 that from April 2025, employer contributions in NI would increase from 13.8 percent to 15 percent, and that the the minimum wage will also increase at £12.21 for adults over 21 and £10 for 18-20 year olds.

For Mr. Jauncey, another policy – ​​an increase CGT – also made him think about his future.

CGT is a tax paid on gains a person makes on an asset – for example if the price of their shares or property increases. This can affect business owners who eventually want to sell their business for a profit. Although not as significant as initially expected, Reeves increased the lower rate of CGT, paid by basic rate taxpayers, from 10 percent to 18 percent and the higher rate, paid by taxpayers at higher rate, from 20 percent to 24 percent.

Mr Jauncey said: “Honestly, I started seriously considering moving the business to Cyprus, where the corporate tax (corporate profits tax) is 12.5 per cent (half of the UK rate of 25 per cent) and dividend tax (tax on payments to shareholders) is 0 per cent compared to the taxes we pay on dividends here.

“The tax burden here is just getting too heavy, and there’s no real incentive to try harder when most of what you earn ends up going straight to the government.”

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His team of 22 works remotely, so moving overseas wouldn’t make a big difference to them.

But the entrepreneur believes that the increase in CGT would complicate things when selling the business.

He added: “If I decide to move, I would sell to the UK and start a new business in Cyprus, but if I do that I would lose a lot of what I have worked for.

“It’s like there’s no winning solution: stay and be heavily taxed or sell and face the same problem.”

“It’s a frustrating situation, and I wouldn’t be surprised if we see more companies exploring opportunities overseas as a result.”

The Chancellor pledged to “protect our smallest businesses” by Labor budget last month – yet Mr Jauncey is one of many business owners who feel they will not benefit.

The Employment Allowance allows eligible employers to reduce their NI liability by up to £5,000 currently, and within its budget, Reeves announced that this figure will increase to £10,500 in April 2025.

The initiative is designed to support small businesses with employment costs, allowing them to claim and pay less NI from the employer each time they make a payroll until the entire allowance is spent or the fiscal year ends.

Labor said this means 865,000 employers will pay no NI next year and more than a million will pay the same or less than previously, but those who will be helped are those with very small numbers of employees. As a result, employers like Mr Jauncey will not benefit.

He is not the only one worried about what the future holds for him after the political announcements.

Richard Simm, owner of three pubs in Tunbridge Wells, Kent, said the changes announced in the budget would “evaporate a lot of our bottom line”.

Mr Simm said I: “Money-wise, each of my three pubs have about the same turnover and the increases announced by Reeves will affect them in about the same way.

“As a result, costs will increase by around £27,000 per pub. This important figure speaks for itself. This comes against the backdrop of five very difficult years, two years of Covid and a continuing cost of living crisis. The latter has hit us in both directions: higher costs and customers with less money who come less often. »

“Most often, opening costs us more than closing. In particular, utility increases make the colder months almost unsustainable.”

Mr. Simm said the week following the budget has been “incredibly difficult” as they try to come up with a plan to mitigate the increases they will see.

He added: “We will almost certainly open less. Modifying our operations to close in the quieter part of the week or even during the quieter months of the year seems like the way to go.

“But nothing is out of the question, even getting rid of one of them.

“The idea of ​​selling is really overwhelming. We’ve spent decades building our businesses and this will mean losing former colleagues turned friends, but something has to give.