Small and medium-sized business in the UK are worried that the country's tax regime will hinder economic recovery, according to research from accountancy firm MacIntyre Hudson.

The research revealed that 80% of small firms think that the UK's tax regime poses a greater threat to the economy than cuts in public spending and, as a result of the tax penalties on high earners, 89% believe Britain will fall victim to a ‘brain drain', as top talent leaves for more favourable opportunities elsewhere.

One in five company owners said that it is unlikely they would have chosen to start a business under the tax regime of today and 69% describe the current system as less competitive than when they first set up their own business.

"The message from business is clear. What was once a celebrated, competitive tax and regulatory regime has become increasingly burdensome, particularly for those ambitious individuals who underpin the health of our economy," said Nigel May of MacIntyre Hudson.