Tax shoots up list of key concerns for business – Daily Business

Catherine McWilliam: taxes are holding companies back

Tax rates are becoming an increasing burden for businesses and are threatening their long-term future, according to new research.

The growing impact of tax is a key finding in the latest State of the Nation Directors survey conducted by the Institute of Directors (IoD) Scotland.

Five years ago, only 28% of businesses identified business tax as a concern. That has increased to 65%. It has moved from fifth priority in 2024 to top of the list.

Scotland’s income tax rates are putting additional pressure on businesses, with 71% of respondents saying they are too high. Meanwhile, 41% said changes to employer National Insurance Contributions have significantly impacted their organisation.

Tax divergence remains a worry for the majority (74.8%) of those surveyed, with respondents saying the disparity between taxation in Scotland compared to the rest of the UK will seriously impact their abilities to attract investment and hire the necessary skilled workers.

With the upcoming election on the horizon, respondents called for the future Scottish Government to “reduce the rates burden and address tax disparities that are hindering investment, growth, scaling and skills retention”.

Catherine McWilliam, nations director at IoD Scotland, said the incoming government needs to work alongside the UK Government to implement support measures for Scottish businesses that will alleviate these concerns.

“Members tell us that ongoing tax burdens are hindering acceleration, inward investment and skills retention, which leaves Scotland at risk of falling behind the rest of the UK.

“If we want to unlock our economic growth potential, businesses need stability and long-term policy certainty.

“While we welcome the support measures included in the recent Scottish Budget, they do not go far enough, particularly for businesses outside the retail, hospitality and leisure sectors.

Beyond tax concerns, the 2026 survey showed a significant surge in AI adoption. Prior to 2024, AI was not on the radar for Scottish business leaders. However, this year 75% say they are using AI for business operations with nearly all of those surveyed (92.68%) predicting its use will grow further in the coming years.

As AI becomes more embedded in Scottish organisations, cybersecurity has become the second highest priority for business leaders.

#Tax #shoots #list #key #concerns #business #Daily #Business