HIGH personal and business taxes are hampering the growth of companies in Aberdeen and Aberdeenshire, according to a new report.

Taxation has overtaken inflation and high energy costs as the biggest constraint facing companies in the region.

The North-east Quarterly Economic Survey, launched today by Aberdeen & Grampian Chamber of Commerce, in partnership with law firm Gilson Gray LLP, benchmarks key indicators in the region’s economy against the wider UK.

The report reveals that more than half of companies here (52%) believe that taxation has become a barrier to growth.

Four key findings will be outlined and discussed at a special Chamber Breakfast Briefing in Aberdeen this morning.

They are:

(1) RISING TAXES HAMPER GROWTH

For the first time since 2021, taxation has surpassed inflation as a constraint to growth for businesses in the North-east. 52% of companies polled listed it as a concern, up from 40% in the last quarter.

The windfall tax being extended is partly to blame, alongside changes in personal taxation announced by the Scottish Government in December which have now come into force.

Following changes which came into force this month, anyone who earns more than £28,850 will pay more in income tax than they would if they lived in England or Wales. Those who earn below the cut-off figure will pay less than they would south of the border.

The tax differentials grow sharply for those on higher incomes. Those on a £35,000 salary pay £61 more in Scotland than the rest of the UK. But the gap widens to £442 at £45,000; £1,696 at £55,000 and £2,096 at £75,000.

The new threshold, of 45% on earnings between £75,000 and £125,140 is also now in place, and the top rate, on salaries of more than £125,140, has jumped from 47% to 48%.

(2) INTERNATIONAL DEMAND CONTINUES TO GROW

More than a third of businesses (34%) think their international sales have increased over the past three months, continuing a trend of strong export trade for companies located in Aberdeen and Aberdeenshire.

Like the previous quarter, this is significantly ahead of the wider UK total (26%) and underlines the strong global demand for our produce, products and services.

Want to see more SNP fails? – Health Matters