Problems may arise if the new coalition government decides to impose a large overall tax increase on the country's businesses and workers, according to one expert.
The Institute of Directors' director general Miles Templeman believes that the country's private sector firms might end up suffering if tax were to become a major focus of the recently formed administration.
He stated: "No-one should be in doubt that tackling the deficit primarily through tax increases would jeopardise the private sector and the country's ability to pay for first-class public services in the future."
Sacrifices will instead need to be made with regards to public sector spending, Mr Templeman argues, with both the Conservatives and Liberal Democrats required to compromise in the near future.
He made his remarks after the leaders of the two parties, David Cameron and Nick Clegg, announced the creation of a new coalition government to lead the UK.
Posted by Susie Cho.