Small firms have massive concerns about the Budget

Brits are likely to be looking ahead to the Autumn Budget with mixed emotions but it seems most small business owners are not only pulling their hair out with worry, some even claim to have delayed having a family or buying a home until Chanceller John Healey reveals the contents of his red leather despatch box on October 28.

That is the extraordinary claim to emerge from new research by digital broker money.co.uk, which quizzed 500 UK small and medium-sized enterprise (SME) owners and found that less than a quarter (22%) feel optimistic about the Budget, while 45% describe themselves as anxious or actively dreading it.

The anxiety experienced by appears to be impacting their personal lives. Six in ten (60%) say they have experienced stress as a direct result of Budget speculation, and more than a fifth (23%) have lost sleep over it.

Strikingly, over three-quarters (77%) say Budget uncertainty has caused them to delay a personal financial decision at some point, with over a quarter (28%) stating this has happened “many times.”

There is also concern on their livelihoods being impacted, with 65% saying they are worried a tax rise in this Budget could force their business to close within the next 12 months.

Asked what action their business would most likely take if the Chancellor raises business taxes, the most common response was raising prices for customers (57%), followed by pausing growth or expansion plans (39%), freezing hiring (29%), reducing staff numbers (25%), and cutting employee benefits or bonuses (21%). Only 4% said they would take no action and simply absorb the cost.

A surprising finding is that the smaller businesses surveyed (2 – 9 employees) report being less affected than other SMEs. This group was less likely to have lost sleep over Budget speculation (15% vs 23% average) and more likely to say they have felt no stress or sleep loss at all (38% vs 31% average).

Unsurprisingly, in the current climate, energy and utility bills are the clear leading cost worry for SMEs, cited by 54% of business owners as their main cost pressure – ahead of staff wages and employer National Insurance contributions (36%), business rates or commercial rent (29%), and supply chain or raw material costs (28%).

When asked about financing plans, 40% of business owners said they would take out a loan in the next 12 months primarily to fund growth, while 32% said a loan would be purely for survival and covering day-to-day costs or cash flow gaps. Nearly a quarter (24%) said they have no plans to take out a loan.

When asked to pick one policy commitment they’d most want to see in the Budget, business owners most often chose measures to reduce energy costs (17%) and a reduction or overhaul of business rates (17%) – placing both ahead of a freeze or cut in Corporation Tax (14%), lower employer National Insurance contributions (13%), and greater access to finance or government-backed funding (13%).

The near-even split suggests there is no silver bullet SMEs are rallying behind –businesses are divided on exactly where government support would make the most difference

Money.co.uk chief executive Tom Luth said: “This is bigger than business; it’s people’s lives on hold. Budget anxiety isn’t confined to the workplace for small business owners – it’s keeping people up at night and delaying real, personal decisions like buying a home or starting a family. Nearly two-thirds are worried that a tax rise this Budget could put them out of business, and that’s a significant level of concern for the Chancellor to be aware of.

“It’s clear from the survey that if taxes rise, business owners expect to have to respond to keep their heads above water, through raising prices, pausing growth, and not taking on new staff – which will have knock-on consequences for the wider economy, not just the businesses themselves.”

Small firms have massive concerns about the Budget

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