New research from Novuna Business Finance has found that 86% of UK small businesses fear specific Budget announcements next week could negatively impact their growth outlook and finances. The Autumn Budget will be presented on Wednesday, October 28, by Chancellor of the Exchequer John Healey.
The research, based on a nationally representative survey of 1,382 small business owners, found that rises to taxation, business rates and fuel duty top the list of concerns. Increases to National Insurance, VAT, income tax and corporation tax are among the biggest worries ahead of the Budget.
Key tax concerns among business owners
More than half of respondents (53%) said a further rise in employer National Insurance would negatively affect their business, while 47% pointed to the prospect of higher VAT. Increases to income tax were cited by 46%, followed by corporation tax at 44%.
Rising fuel costs are also a major concern, with 40% of small business owners worried about increases to fuel duty and 37% saying further taxes on diesel and petrol vehicles could harm their business outlook. Business rates are another significant source of concern, with 36% of respondents saying changes could negatively affect their finances. This issue appears particularly pressing for established firms, with 57% of businesses trading for more than 20 years expressing concern.
Growth outlook and investment caution
Only around one in four (26%) small businesses said they are forecasting growth for the final three months of 2026, set against 23% fearing they will either contract or struggle to survive the winter months.
The figures also suggest businesses are becoming more cautious about investment and recruitment. The proportion of small business owners looking to invest in growth by creating new jobs has fallen by nearly half - from 28% in 2022 to 15%. Looking further ahead, only 8% said they were considering expanding overseas in 2027 while just 5% planned to hire young people to train and develop.
Other concerns and calls for support
Other concerns include changes to tax thresholds (25%), increases to Capital Gains Tax (24%), changes to the VAT registration threshold for small businesses (24%), new rules on parental leave and sick pay (20%), the introduction of a wealth tax (19%) and changes to salary sacrifice and pension arrangements (17%). Further increases to wages for lower-income earners (26%) and the possibility of new rules for employers on flexible working and employee rights (22%) were also seen as challenges.
Jo Morris, head of insight at Novuna Business Finance, said: “The depth of concern over next week’s Budget, and the sheer number of issues small businesses are worried about, reflects the challenging economic environment in which they currently operate.” She added: “Given the importance of small businesses to the UK’s growth agenda, we need a Budget next week that supports the SME community. Positive announcements in next week’s Budget could go a long way towards boosting small business confidence and strengthening their ability to power economic growth and create jobs across the UK.”
