Hopes for tomorrow's Budget

The Federation of Small Businesses (FSB) is calling on the Chancellor to deliver a decisively pro-small business Budget, saying SMEs are “sick of stagnation.”

The UK’s largest small business group says the Budget, tomorrow, will be the Chancellor’s “first and best chance” to secure sustainable, long-term economic growth.

It is urging the Chancellor to resist pressure to introduce anti-enterprise tax rises, as new official figures highlight the urgent need to encourage more start-ups as well as support existing small firms.

The figures – from the Department for Business and Trade – revealed a 56,000 drop in the number of small businesses in the UK between early 2023 and early 2024. They also showed a 0.5 per cent fall in the number of people employed in small businesses, from 16.7 million to 16.6 million.

FSB is calling on the Chancellor to:?

• Provide certainty and a pro-business, pro-employment element to the plan to Make Work Pay, specifically increasing the Employment Allowance so it automatically rises in line with the National Living Wage (NLW).
• Fulfil Labour’s pledge made in the election campaign to help small businesses, including those on or around the high street, with business rates. This includes adopting FSB’s proposal to take more small firms out of the tax by increasing the threshold of Small Business Rates Relief from ￡12,000 to ￡25,000 of rateable value.
• Protect Entrepreneurs' Relief, which would provide vital financial security to small business owners when they sell their business, encouraging more people to take the leap into entrepreneurship.

Ann Scott, Development Manager for FSB in Essex, said:?

?“Small businesses are sick of stagnation. Our recent small business confidence index in October, shows that confidence remains notably low. Just 14% of small business owners expressed confidence in their business prospects over the next year, marking a significant drop from previous quarters.

?These findings underscore the need for supportive policies to boost confidence and facilitate investment in the small business sector.

We have 5.5 million small and medium-sized enterprises here in the UK, who employ 16.7 million people. They contribute approximately 53% of all business turnover, so small businesses are key to economic recovery and growth.

We are hoping for a Budget that helps these small businesses invest, employ, and grow - which will, in turn, see the UK economy grow”.

In relation to the Employment Allowance, Nikki, Physiotherapy practice owner in Essex and FSB member, added: “Over the past 4 years, my costs have increased massively - utility bills, business products, consumables, and especially the costs associated with employing staff.

As I have been unable to raise my charge out rates enough to compensate for this, I haven't made any money.

I am pivoting my business to attract income from other sources, but unknowns coming up in the Budget make planning very difficult. Eg. the probable increase in employers NI, and the changes in business rates.

As a small business owner for the past 18 years, I am feeling very vulnerable and unheard. It feels that they are penalising SME's while pursuing the large corporates.

I am very grateful to FSB for speaking up on our behalf, and I hope that this government finds a way to protect and nurture the many small businesses in this country”.