Tax rises in the Budget have made it harder for businesses to “take their chances” on hiring staff, according to one of Britain's biggest business groups.
In a speech to his annual conference on Monday, the head of the Confederation of British Industry (CBI) will say the changes undermine investment.
Rain Newton-Smith will suggest that businesses across many sectors are “hit by a tough business environment that has just gotten tougher” due to changes to National Insurance Contributions (NICs) and inheritance tax.
The government said “difficult choices” had been made to try to “fix the public finances” but was determined to work with businesses.
In her first budget as chancellor last month, Rachel Reeves announced a nearly £70 billion increase in public spending, funded in part by increases in business taxes.
While the minimum wage increases and workers' rights reforms have been welcomed by unions and labor groups, bosses have criticized, saying their businesses are being weighed down by multiple changes at once.
In her speech to the CBI conference, Ms Newton-Smith will argue that “such tax rises must never again be applied only to businesses”.
She will also discuss a recent survey by the group, which found that almost two thirds of the 185 businesses responding believed the Budget would harm UK investment.
Ms Newton-Smith will also say that profits “are not just extra money for businesses to put in a pillowcase, but the key to investment”.
“When you touch profits, you touch competitiveness, you touch investment. You touch growth,” she will say.
Last week a group of major retailers including Tesco, Amazon and Next wrote to the Chancellor warning of the impact tax changes would have.
Companies such as Sainsbury's and Marks & Spencer have said they will face a huge increase in costs and may have to increase prices for their customers.
However, critics said asking multi-million dollar companies to pay more tax was one of the fairest ways to improve funding for services like the NHS.
“No one questions the fact that we need tax rises to actually help fund our public services,” Ms Newton-Smith told the BBC's Today programme.
But she said businesses had been left confused by the National Insurance payment threshold being lowered and the pain was “really bad”.
In her speech, she will urge the government to consider a number of reforms to improve economic growth, such as giving businesses more flexibility in how they spend money through the apprenticeship levy.
She will also say the chancellor should consider updating business rates for commercial property and simplifying the planning system.
According to reports on Monday, the Chancellor will use the opportunity offered by the conference to respond to criticism of Labour's first budget in 14 years.
The Guardian suggests she will tell business leaders that they offered “no alternative” to her plans and that there was a need for a “clean slate” after the general election.
During the election campaign, Labor promised that “working people” would not see higher taxes on their pay slips.
A government spokesperson said the commitment meant the government had to make “difficult choices to get public finances back on track and on a firmer footing”.
“Despite a difficult legacy, the Government is determined to continue growth and work in partnership with business to invest in Britain's future so we can improve the situation in every part of the country,” they said. added.
