80% Of Welsh SMEs Are Worried Autumn Budget Might Impact Growth
This was followed closely by National Insurance contributions (59%) and fuel duty (56%), which would both cut into the business’ bottom line.
This was followed closely by National Insurance contributions (59%) and fuel duty (56%), which would both cut into the business’ bottom line.
Other taxes that they were concerned about included:
VAT increases (45%) New taxes on diesel and petrol vehicles (44%) New taxes on pensions (36%) Changes to tax thresholds (33%) Rising minimum wage costs (32%) Raising Capital Gains Tax (26%)
As SMEs struggle with the rising cost of employees, energy bills and fuel, it seems like even the smallest increases may push them over the edge.
Different Sectors, Different Pressures
When it comes to industry-specific worries, the report also showed that different sectors had different fears.
Transport and distribution industries were most concerned about National Insurance increases (68%).
The real estate sector was worried about income tax and capital gains tax changes (68% and 51%).
Retail businesses feared VAT rises and lower VAT thresholds (63% and 37%).
This was followed closely by National Insurance contributions (59%) and fuel duty (56%), which would both cut into the business’ bottom line.
The construction sector would be hit hardest by potential fuel duty hikes (55%).
Agriculture business owners were most concerned about tax threshold changes (45%).
Jo Morris, Head of Insight at Novuna Business Finance, warned that SMEs in Wales cannot continue battling rising costs without support:
“This is the long-tail of the cost-of-living crisis – such as rising supplier costs, the burden of energy and fuel costs and mounting staff costs. What our new research tells us is Welsh small businesses cannot keep absorbing market pressures to their cost-line and cashflow.
“We are all committed to growth in this country but small businesses in Wales need a ‘Budget for Business’ – one that eases the tax burden, helps with the operating costs and makes hiring people more affordable. Help here will do a lot to power growth into 2026 and beyond.”
How Can Businesses Prepare For Tax Hikes?
Whilst an upcoming Budget, especially one with so much speculation, can feel scary, businesses can still prepare to get ahead.
For example, an increase in taxes could affect their bottom line, which might hamper plans for expansion.
In these cases, it’s important for businesses to have a clear financial plan to see where these extra pressure points might come up and how they can relieve them elsewhere. Are there any areas to cut back costs? Any suppliers to start negotiating with early to lock in prices long term? An ability to get a cheaper office?
All of this planning means businesses can stay one step ahead and ensure they are less likely to be stumped by increased taxes.
With so much speculation flying around, it can be easy to get wrapped up in the rumour mill. The truth is, no one, apart from Reeves herself, knows exactly what is going to be announced in the Budget.
And whilst knowing would certainly make things easier for businesses, the important thing is staying ahead of the curve. By thinking about which scenarios might affect your business most deeply, you can make a plan for the future to help build resilience.
After all, businesses constantly have to adapt to new policies, and this latest Budget is just the next example of that.
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Based on reporting by techround.co.uk.