In April's Budget the chancellor, Alistair Darling (pictured), confirmed income tax will increase for high earners from 2010, affecting those with salaries higher than £150,000, who will see their income tax on their higher earnings rise from 40p to 50p from April 2010.
According to a report from accountancy firm MacIntyre Hudson, 72% of employers in small and medium-sized business think this tax regime is ‘punitive' and 89% believe Britain will lose high-level talent as a result.
Almost three quarters (72%) are considering moving their business abroad because of the tax increase as 69% think the tax regime makes the system less competitive than it was at the time they set up their business.
Nigel May, tax principal at MacIntyre Hudson, said: "What was once a celebrated, competitive tax and regulatory regime has become increasingly burdensome, particularly for those ambitions individuals who underpin the health of our economy.
"What the chancellor may have overlooked is that essential activities for future growth rely on the very people his so-called ‘targeted' tax rises hit hardest."
