UK companies are closing more often as taxes and wage costs rise

More than 3,700 firms in the UK filed for bankruptcy over the past month, according to The Gazette, which publishes announcements of business closures across the country. This is 32% higher than the figures for the same period last year.

As Bloomberg notes, this month, there is expected an increase in both employer national insurance contributions and the minimum wage in the United Kingdom, according to plans announced in October by the finance minister. Such measures may harm businesses with low profitability, retail in particular.

According to Simon Edel of EY-Parthenon UK, the country's companies are being pressured by persistent inflation, falling business sentiment, and supply chain disruptions. Rising costs and the possible negative effect of new US tariffs are creating additional challenges for UK businesses. Heather Powell, an expert at Blick Rothenberg, estimates that the increase in costs for businesses due to higher taxes and insurance contributions could amount to 10–15%.