Insider Media Limited

One in five Midlands entrepreneurs feel recent tax changes have damaged their spirit and drive more than the recession. That’s according to accountancy firm RSM Tenon, which questioned nearly 400 entrepreneurs on their attitudes towards the economic downturn and recent tax legislation.

RSM Tenon’s 'Business Barometer' questioned more than 390 entrepreneurs on their thoughts regarding the change in government, the recession and the recent tax changes.

Only 7 per cent of Midlands entrepreneurs feel that the changes, including the recent increase to Entrepreneurs’ Relief and the National Insurance Holiday, have had a positive impact on their attitude towards business in the UK.

Many others said they were feeling the pressure from the increase in personal taxation – including the introduction of the 50 per cent tax rate which was announced in April 2010.

Andrew Hubbard, chairman of tax at RSM Tenon, said: “A high tax regime is not conducive to an enterprise economy and is not sustainable long term. With the introduction of the 50 per cent tax rate now beginning to take effect – for the first time in many years the wealth creator is taking home less than the taxman - it is questionable how much longer entrepreneurs are prepared to put up with such an attack on their entrepreneurial spirit.

“The coalition needs to take this into account when considering its legislative programme and put measures in place to incentivise entrepreneurs. Business development is not a tap that can be turned on and off and while the UK is an entrepreneurial country, it will take time for growth to come back.”