A total of 86% of UK small business owners are fearful of Autumn Budget announcements that could negatively impact the growth outlook and finances of their enterprises – according to.
New research from Novuna Business Finance says that for those that expressed concerns, the prospect of national insurance hikes (49%), rises to VAT (48%) and income tax (50%) were issues small business owners believed would damage business growth.
Flexible working was major a concern in many traditional sectors, whist the property sector feared the ripple-effect from the market if there were rises to Capital Gains tax or Inheritance tax.
The findings come at a time when there has been a rise in the percentage of UK small business predicting growth, rising from 30% to 35% in the weeks immediately after the General Election. This upturn in small business confidence represented a two-year high, following a period of falling and then flat business confidence during cost-of-living crisis.
Novuna said that 78% of those small businesses predicting significant expansion for next three months to December 2024 are also enterprises that express concern on how the Autumn Budget could adversely impact their growth plans.
The nationally representative poll asked 1,046 small business owners which, if any, of a number of potential Budget announcements would negatively impact the growth outlook and finances of their business, if the new UK Government was to apply them in the Autumn Budget. Concerns over the Autumn Budget were relatively even across all industry sectors – at least 81% of business owners in every industry sector cited possible Budget policies that would negatively impact the growth outlook and finances of their business.
The specific issues cited varied by industry sector:
- The wide-ranging market speculation on potential rises to national insurance caused most concern for small businesses in manufacturing (61%), transport and distribution (61%) and construction (56%).
- Concerns over the prospect of rises to income tax were strongly felt in the retail (56%) and property sectors (56%) – sectors where business owners are acutely aware of the need to maintain consumer confidence and spending power.
- Small business owners in transport and distribution (68%) and construction (63%) were most worried about the impact of any rises to fuel duty.
Changes to working patterns and pay also was a cause of concern. Small businesses in manufacturing (44%) and the transport and distribution sector (44%) cited that forcing employers to offer flexible working would negatively impact the growth outlook and finances of their business. Further, small businesses in the hospitality (42%) and manufacturing sectors also expressed concern about the impact to business stability of raising the minimum pay rates for low earners. Nationally, 21% of small businesses were concerned about the impact to their business’s stability of employees getting parental leave and statutory sick pay from day one of a new job.
Small businesses in the property sector were most concerned about the possibility of rises to Capital Gains tax and Inheritance tax (48%) in terms of the knock on effect for their enterprises.
Joanna Morris, Head of Insight at Novuna Business Finance said:
“Whilst almost daily there seems to be speculation over what will be announced in the Autumn Budget, in truth no one actually knows at this moment in time. What our survey does reveal, however, is how hard-fought but frail the unturn in small business confidence has been since the General Election. After two-years of small business confidence not moving each quarter, the upturn in July was welcome news for the economy and coincided with inflation falling and reports of modest growth to the UK economy in August.
“All this makes the timing of the Autumn Budget important. Small businesses want support to power their growth plans forward – it is a critical time to build on the signs of upturn since July – but fiscal changes that add to the cost burden of UK small businesses, increase red tape or dampen consumer spending confidence could see trigger a fall in small business growth outlook for the final months of 2024 and going into 2025.”
