Rachel Reeves has left businesses “disappointed” following her spring statement on Wednesday as firms continue to battle the October Budget tax hikes. While no extra levies have been added, many companies hoped for a “surprise gift” from the Chancellor. Businesses are bearing the brunt of the October tax increases, with costs being passed onto customers.

Employers National Insurance was hiked up by 1.2 percentage points to 15%, up from 13.8%. The Treasury also reduced the secondary threshold, the level at which employers start paying NI, from £9,100 per year to £5,000 – a whopping 45% reduction. “Lower taxes were never on the cards for the Chancellor’s spring statement,” Amy Knight, a small business expert at NerdWallet UK said.

“But, like a child who asks for a pony every Christmas, businesses will still be disappointed Ms Reeves didn’t deliver a surprise gift, such as lower VAT or corporation tax.”

Business rates relief is set to taper off in April, with no extra funding or support announced for retail, leisure and hospitality firms. Ms Knight says “many small firms will respond by raising prices” due to being unable to absorb the NI increase on top of the minimum wage hike.

Increased tax rates will leave businesses with less cash in their pockets to invest for growth. This will result in “fewer jobs created” and a decline in “new premises” being opened. The business expert warns there may be a reduced headcount across businesses, with hours being cut too.

However, challenging times “can force innovation”, Ms Knight optimistically says, as businesses will need to “find more efficient ways of driving productivity to longer-term cost savings that make growth more achievable.”

“But, that’s little comfort to firms buckling under rising costs — or the workers whose livelihoods are on the line,” she adds.

The expert advises small business owners who are facing financial difficulty to offset higher wage bills through diversification, such as monetising unused space or boosting online sales through social media.