More than half of Britain's business leaders think that an over-complicated tax system is a greater barrier to growth than the UK’s tax burden, according to the latest Azets Barometer.
The survey of around 400 UK business leaders found that 54% believe that simplifying the tax system should be the government's first priority, while 47% cited that addressing high corporation tax rates was more important.
The UK's tax system is widely regarded as one of the most complex in the world. HMRC estimates that compliant UK businesses incur £15.4bn each year in meeting around 2,500 obligations across 27 policy areas.
Peter Gallanagh, UK CEO at Azets, said the results show that small and medium business are "drowning in tax complexity".
"They are not just asking for lower taxes, they are asking for a system they can understand and plan around. Simplifying that red tape would give SMEs greater confidence to invest, hire and grow," he said.
Less than half (47%) of businesses surveyed said that reducing corporation tax should be the Government’s top priority, suggesting that tax simplification overrides tax reduction. Completing the list of business leaders’ top five priorities were reforming business rates (44%), reducing employers’ National Insurance contributions (39%) and expanding capital allowances and investment incentives (38%).
According to the research, UK businesses are continuing to navigate a challenging operating environment. The biggest concern is higher labour costs, cited by 43% of respondents, followed by labour skills shortages (39%), geopolitical events (37%), energy prices (37%) and reduced profit margins (35%).
Those pressures are already influencing business decisions. Over the past 12 months, 45% of UK businesses said they had passed price increases onto customers, 42% had delayed planned capital expenditure or expansion, 38% had restructured or renegotiated supplier contracts, and 35% had frozen new headcount or hiring. A third (34%) had accepted permanently lower net profit margins, while 28% had taken on additional borrowing to manage cashflow.
Despite these challenges, growth remains on the agenda as 39% of UK business leaders said growing their businesses through cost-effective means was their biggest strategic priority over the next 12–24 months.
Gallanagh added: “SMEs are still ambitious, but ambition only goes so far when every pound is under pressure, and little is being done by the UK Government to help them. High costs and tight cashflow are forcing businesses to think twice about hiring and investment. If SMEs are expected to power UK growth, as they have for many years, we need to give them the headroom to do so.”
Explore more information on the lates Azets Barometer findings.
Methodology: The Azets Q3 2026 Barometer survey pulled data from a total sample of 1,400 senior business leaders (at manager level and above) across six European markets. This includes 366 respondents from the UK, alongside leaders in Sweden, Norway, Finland, Denmark, and Ireland. The fieldwork was conducted online between May and June 2026, combining an Azets client sample with an externally recruited panel of businesses with revenues of €10mn+.