UK tax policies are hampering business growth and innovation, according to research conducted by a Bicester accountancy firm.

Ahead of the March 6 Spring Budget, the January 2024 Azets Barometer survey shows the UK tax regime's impact on business growth, innovation, sustainability, and talent attraction and retention is just below neutral.

The findings suggest that while not severely detrimental, the existing tax environment isn't particularly beneficial to businesses, particularly smaller ones.

Significant disparity is noted between businesses of different turnover scales - those within the £50 million to £99.9 million turnover bracket show the most growth, while those in the £10 million to £49.9 million range view the tax regime as broadly neutral.

Praveen Gupta, UK head of tax at Azets said: "Simplifying incentives, taxes, and regulations is essential to create a more competitive landscape that rewards entrepreneurship and ambition."

"Businesses are paying more tax than ever, yet there is an obvious correlation between tax, regulation, and economic growth, and this ought to be a priority for this Government and the next.”

The UK's economic outlook for the next 12 months scored of 5.1 out of 10, hinting at a cautious, wait-and-see approach towards prospects.

Of the 323 UK respondents, 41 per cent expressed moderate optimism with scores of six or above, contrasted with 35 per cent who were more pessimistic, scoring four or lower, and 24 per cent opting for a neutral score of five.