{"id":44767,"date":"2025-11-05T09:52:37","date_gmt":"2025-11-05T09:52:37","guid":{"rendered":"https:\/\/employmenthero.com\/uk\/?post_type=news&p=44767"},"modified":"2026-02-03T17:06:00","modified_gmt":"2026-02-03T17:06:00","slug":"budget-tax-rise-fears-small-business-confidence","status":"publish","type":"news","link":"https:\/\/employmenthero.com\/uk\/news\/budget-tax-rise-fears-small-business-confidence\/","title":{"rendered":"\u2018Running Out of Resilience\u2019: Entrepreneurs Fear Tax Raid Will Derail Recovery"},"content":{"rendered":"\n
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Business confidence was already on shaky ground \u2013 but the Chancellor\u2019s pre-Budget comments may have sent it crashing through the floor.<\/strong><\/p>\n\n\n\n

After last year\u2019s National Insurance rise rattled employers, small business leaders had hoped the upcoming Budget might bring stability. Instead, the Chancellor\u2019s refusal to rule out increases to income tax, VAT or National Insurance has piled on fresh anxiety \u2013 particularly among the UK’s smallest firms, who say they are running out of resilience.<\/p>\n\n\n\n

In a speech delivered ahead of the Budget, she said she would be \u201cmaking the tax and spending decisions to get debt down and to fund our public services sustainably.\u201d<\/p>\n\n\n\n

A Fragile Recovery At Risk<\/strong><\/h2>\n\n\n\n

It comes after a volatile labour-market year marked by spiralling operating costs, tightening hiring conditions and weakening real wages. There had been tentative signs of recovery:<\/p>\n\n\n\n

91±¬ΑΟ data for September<\/a> showed UK employment rose 2.6% \u2013 the strongest monthly lift in 13 months \u2013 pushing annual growth to 2.7%. Full-time and wages were moving in the right direction too, although inflation continued to erode much of that progress.\u00a0<\/p>\n\n\n\n

Now business leaders warn these fragile gains could now be at risk if tax rises remain on the table ahead of the Budget.<\/p>\n\n\n\n

Entrepreneurs Question Whether Risk Is Still Worth It<\/strong><\/h2>\n\n\n\n

Afiya Titus, co-founder of Fineo AI<\/a> and a member of the UK Small Business Growth Council, spends her days speaking with accountants who support the UK\u2019s smallest businesses \u2013 and she says the mood has been increasingly weary. <\/p>\n\n\n\n

\u201cEverybody wonders why they\u2019re taking risk[s] at the moment,\u201d she says. \u201cIt currently feels like very little reward for the amount of risk that\u2019s taken.\u201d<\/p>\n\n\n\n

She adds that she\u2019s heard hundreds of conversations this past year where entrepreneurs and accountants alike have said, \u201cI\u2019d have a much simpler, safer, more stable life if I was an employee again, rather than employing people.\u201d<\/p>\n\n\n\n

She acknowledges that confidence has dipped \u2013 \u201cThere\u2019s definitely a reduced feeling of hope than before\u201d \u2013 but insists there\u2019s also an undercurrent of optimism. <\/p>\n\n\n\n

\u201cWe know policy can make a difference, and we\u2019ll keep pushing for choices that actually enable micro-businesses to thrive.<\/p>\n\n\n\n

\u201cWhatever comes out of the Budget, we\u2019ll find a way to adapt. There\u2019s an incredible amount of creativity and grit in this community \u2013 that\u2019s what keeps us going.\u201d<\/p>\n\n\n\n

Titus adds that misconceptions about business owners also need to be challenged and stresses that most entrepreneurs are far from the \u201cfat-cat\u201d caricature. <\/p>\n\n\n\n

\u201cMany of us pay ourselves less than our employees just to keep the lights on.\u201d She also warns that the \u00a385,000 VAT threshold still acts as \u201ca limit to growth,\u201d encouraging some smaller firms to turn down work to avoid tipping over.<\/p>\n\n\n\n

Even the postponement of the Budget has unsettled many founders. <\/p>\n\n\n\n

\u201cPeople are just a bit spooked that the date was pushed out\u201d she says. \u201cBut I do think once there\u2019s clarity, people will get back to building again. It\u2019s what we do.\u201d<\/p>\n\n\n\n

Chambers Of Commerce Warns Confidence Could Collapse<\/strong><\/h2>\n\n\n\n

The British Chambers of Commerce shares that alarm. David Bharier, Head of Research, says business confidence was already fragile before the Chancellor\u2019s comments<\/a>, and that piling on costs could push many smaller firms past breaking point.<\/p>\n\n\n\n

\u201cBusiness confidence is already at quite a low base at the moment. Fundamentally, there are two messages that businesses need to see very clearly: One is no more costs or no more taxes on them in the upcoming Budget. If they see costs going up again, confidence is going to continue to fall.\u201d<\/p>\n\n\n\n

But for Bharier, avoiding further cost pressures is only part of the equation \u2013 what the economy needs now, he argues, is a long-term vision for growth.<\/p>\n\n\n\n

\u201cThe other element is creating a stable narrative about how we\u2019re going to grow the economy over the next few years,\u201d he says, pointing to increased infrastructure investment and tackling planning barriers that currently stop firms expanding their premises.<\/p>\n\n\n\n

Trade And Long-Term Growth Plans Urgently Needed<\/strong><\/h2>\n\n\n\n

Trade support, he notes, could also deliver meaningful economic returns. \u201cTrade is a very obvious and very tangible area we can generate growth from,\u201d he says. \u201cIf last year we increased UK exports by just two percent, it would have added about 0.6% onto GDP. Every one percentage point growth in GDP is another potential \u00a310 billion in tax revenue.\u201d<\/p>\n\n\n\n

For now, entrepreneurs are bracing once again \u2013 hoping the Chancellor chooses relief, not another blow to an already fatigued business base.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Small business leaders warn potential Budget tax hikes could derail recovery and hurt confidence. Read what UK entrepreneurs want from the Chancellor.<\/p>\n","protected":false},"author":430,"featured_media":44768,"template":"","meta":{"inline_featured_image":false,"exclude_from_algolia":false,"author_id":70413,"reading_time":"3 min read","display_reading_time":false},"categories":[277],"tags":[],"post_features":[],"class_list":["post-44767","news","type-news","status-publish","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/news\/44767","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/news"}],"about":[{"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/types\/news"}],"author":[{"embeddable":true,"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/users\/430"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/media\/44768"}],"wp:attachment":[{"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/media?parent=44767"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/categories?post=44767"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/tags?post=44767"},{"taxonomy":"post_features","embeddable":true,"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/post_features?post=44767"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}