Nearly Half Of UK Small Business Owners Are Dreading The Budget

Nearly half of UK small business owners are dreading the Budget, with two-thirds fearing tax rises could force them to close according to the latest research from Newmoney.co.uk The research reveals the personal and financial toll of Budget uncertainty on UK small business owners — and what they hope to see from the Chancellor on October 28th.

Key Findings:

• 45% of UK small business owners describe themselves as anxious or actively dreading the upcoming Budget, against just 22% who feel optimistic

• 65% are concerned that a rise in business taxes could force their business to close within the next 12 months

• 60% say they have experienced stress, and 23% have lost sleep, as a direct result of speculation over the Budget

• 77% have delayed a personal financial decision — such as buying a house, having children, or retirement planning — because of Budget uncertainty

• If business taxes rise, 57% of business owners say they would raise prices for customers, 39% would pause growth or expansion plans, and 29% would stop hiring new staff

• The smallest businesses surveyed (2-9 employees) are less likely to lose sleep over Budget speculation than larger SMEs

• Energy and utility bills are the single biggest cost pressure on SMEs right now, cited by 54% of SME owners surveyed

• When asked for one policy commitment from the Chancellor, business owners most often chose energy cost support and business rates reform (17% each)

The survey of 500 UK small and medium-sized enterprise (SME) owners found that less than a quarter (22%) of business owners feel optimistic about the upcoming Budget, while 45% describe themselves as anxious or actively dreading it.

Budget Worries For Business Owners

The anxiety experienced by SME owners 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’re worried a tax rise in this Budget could force their business to close within the next 12 months.

What Will Businesses Do If Taxes Rise?

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.

The Smallest Businesses Are The Calmest

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've felt no stress or sleep loss at all (38% vs 31% average).

Where The Financial Pressure Is Coming From

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.

What Business Owners Want From The Chancellor

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’s no silver bullet SMEs are rallying behind — businesses are divided on exactly where government support would make the most difference

Tom Luth, CEO of money.co.uk 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."

As Paul Andrews, Founder and CEO of Family Business United adds, "There continues to be a great deal of political and economic uncertainty as the backdrop to doing business in the UK and family businesses want certainty. They plan for generations, not the short term, but the ongoing cuncertainty continues to force them to think about decisions in a shorter term than they are used to. The changes to inheritance tax and reliefs is also continuing to drive conversations and decisions too."

"As the engine room of the economy, family firms want to invest, to increase productivity and to grow but they do need a stable environment to enable them to make the decisions for the longer term that enables this to happen."