ACCA Calls on Prime Minister Burnham for Tax Reform as UK SME Confidence Hits Record Low

Following the appointment of Prime Minister Andy Burnham, ACCA Chief Executive Helen Brand OBE has issued an open letter calling for tax reform, regulatory simplification, and long-term fiscal stability, backed by fresh Q2 2026 GECS data showing UK business sentiment falling to a record low.

In a letter sent to 10 Downing Street on 21 July 2026, Helen Brand OBE, Chief Executive of the Association of Chartered Certified Accountants (ACCA), congratulated Prime Minister Andy Burnham on his appointment while outlining a clear assessment of the UK business climate.

Drawing on the latest findings from the Q2 2026 Global Economic Conditions Survey (GECS), conducted jointly with the Institute of Management Accountants (IMA), Brand highlighted that domestic policy friction and external economic pressures have pushed small and medium enterprise (SME) confidence to its lowest point on record.

For corporate treasurers, finance leaders, and risk managers operating in or trading with the UK, the data signals a cautious climate for capital expenditure, persistent cost inflation, and an urgent requirement for structural tax simplification.

Key Economic Indicators from GECS Q2 2026

The Q2 2026 survey highlights a period of sharp caution across the British business landscape:

• Record Low Sentiment: UK SME confidence fell to a new record low in Q2 2026, remaining well below its historical average following a trend that began after the 2024 Budget.

• Elevated Cost Inflation: Over 80% of survey respondents reported increased input and operational costs in Q2, placing cost pressures significantly above the long-term series average.

• Stagnant CapEx and Employment: Both the Capital Expenditure and Employment indices reflected ongoing weakness, indicating widespread caution and deferred strategic investment across firms.

• Domestic and External Pressures: External factors like energy price hikes tied to Middle East volatility weighed on firms, but domestic factors such as increased tax burdens on employers and rising minimum wage floors were cited as crucial headwinds.

Looking closely at the underlying indicators, the GECS data illustrates a tough operating background. While global trade tensions and geopolitical energy swings continue to disrupt forecasts, domestic cost drivers are impacting corporate cash flows. The broader data points to a stagnant investment market, with firms opting to hold back liquidity rather than commit to long-term capital projects.

Foundations for Tax Reform: Simplicity, Certainty, and Stability

Brand noted that while government measures such as single annual fiscal events, long-term spending reviews, and the industrial strategy are helpful structural steps, they have not yet reversed declining sentiment among business leaders.

ACCA argues that sustainable economic growth requires a tax regime anchored in three core principles: simplicity, certainty, and stability.

Brand urged the Prime Minister to include a comprehensive 10-year vision for tax policy within the government’s long-term economic strategy, putting forward three primary proposals:

1. Phased Tax Simplification: Commencing with streamlined administrative rules and tax thresholds for smaller firms to lower compliance costs.

2. Regulatory Streamlining: Removing unnecessary regulatory friction that restricts private enterprise growth.

3. Enhanced Agent Governance: Empowering qualified professional agents to manage tax administration, which ACCA notes could narrow the national tax gap, lower fraud risk, and reduce operational burdens on HMRC.

Brand confirmed that ACCA will send a supplementary submission to the Chancellor detailing specific friction points affecting business productivity, the incorporated small business tax gap, and risk exposures to the Exchequer.

Implications for Corporate Treasury

The ACCA submission underlines a clear priority for corporate treasury teams: high uncertainty restricts visibility, making accurate cash forecasting and capital allocation challenging.

For group treasurers and CFOs managing UK operational exposure, three strategic focus areas emerge:

• Working Capital Efficiency: With over 80% of companies reporting higher operating costs, maintaining lean working capital management and tight control over receivables is vital.

• Dynamic Scenario Modelling: Given ongoing energy market shifts and evolving tax obligations, treasury desks should run flexible stress tests incorporating potential tax adjustments and input cost swings.

• Disciplined Investment Allocations: Weakness across national CapEx metrics points to tight cash preservation; investment approvals require realistic hurdle rates that reflect sticky inflation and ongoing regulatory compliance expenses.

As the Burnham administration establishes its domestic policy roadmap, the treasury and finance community will monitor closely to see if Downing Street moves quickly toward a more predictable, simplified tax framework.