Small business owners in the UK fear that the recent expansion of the European Union (EU) will lead to higher taxes and more regulations, new research has found.
The survey, conducted by accountancy firm Grant Thornton, found that four in five companies were “sceptical” of the business benefits of EU enlargement.
Nearly four in ten firms felt the expansion would lead to higher taxes while just under half predicted more red tape.
Few UK companies saw the business benefits of EU enlargement, which saw 10 former communist states become members on 1 May.
Just nine per cent of businesses in the Midlands felt the expansion would have any positive affect on them, while even in the most optimistic region, eastern England, less than a third of firms saw any benefits in enlargement.
Business groups have generally welcomed the EU expansion, claiming that the expected influx of new labour will help British businesses fill skills gaps.
However, some analysts have predicted a rise in red tape originating from Europe, hampering the growth of small firms in the UK.
Graeme Forbes, partner at Grant Thornton, said that geography and history still play an important role in forming the perception of many EU entrepreneurs.
“With many businesses across Europe actively engaged in debt reduction strategies, a factor which inevitably impacts in investment levels, it could be some years before UK businesses fully embrace Easter Europe and the Baltics as new markets for investment,” he said.
