Rachel Reeves sparks panic as small businesses fear Autumn Budget will threaten growth

Many small business owners are fearful of the upcoming Autumn Budget, worried that new announcements could hit their growth prospects and finances hard. Concerns focus on potential increases in national insurance (49%), VAT (48%), and income tax (50%), which many believe would stall business expansion. Flexible working policies also worry traditional sectors, while property businesses fear any rises in Capital Gains or Inheritance Tax could ripple through the market.

Joanna Morris, Head of Insight at Novuna Business Finance told the Express: “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. Small businesses want support to power their growth plans forward 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.”

The UK’s annual Autumn Budget is set to take place on November 26. While there’s much speculation about possible changes to ISA limits, pensions, inheritance tax, and capital gains tax, nothing is confirmed yet.

Meanwhile, despite government efforts promoting trade deals with countries outside the EU and the US, new exclusive research from Novuna Business Finance reveals UK small businesses are turning inward focusing more on the domestic market than international expansion.

In a nationally representative survey of 1,000 small business owners across the UK, the percentage of businesses prioritising the UK market for future growth has surged to 84%, up from 64% in 2017, marking the highest level recorded since the survey began tracking attitudes eight years ago.

Sectors showing the greatest reliance on domestic growth including agriculture (97%), construction (96%) and hospitality (87%).

Interest in markets like the US and the EU has seen a notable decline. The desire to do business in the US, which had remained steady at around 16% for several years, has now dropped to 12%, the lowest point in eight years and well below the pre-pandemic high of 22% in early 2020.

The European Union, once a crucial trading partner for many small UK businesses, has seen its appeal wane dramatically. Back in 2017, 24% of small businesses identified the EU as a growth opportunity. That figure has now fallen to 17%. Countries in Europe outside of the EU have also seen interest being halved, down from 12% to just 6%.

Jo Morris added: “These new findings are possibly a consequence of the frustrations many small businesses have felt, following major political shifts over the last eight years. Our research in June 2017 revealed dismay over Brexit, with nearly a third of small business owners (31%) saying they wanted a new government that would reverse the Brexit decision.

“Forward wind to the start of 2025 and our Business Barometer survey revealed that more than seven in 10 small businesses (77%) said they were fearful that policies from the new US administration could have an adverse ripple effect on the outlook for small businesses here in the UK.

“Our new findings see this playing out, with a growing number of small businesses looking to the local UK market to deliver their aspirations for growth and expansion. In recent months, the UK government has heralded a string of so-called ‘historic’ trade deals with India, the United States, and the European Union.

“Our data questions whether this will deliver an uplift in confidence for UK small businesses, at a time when their growth forecasts are falling each quarter. Small businesses dislike uncertainty, and with the Autumn Budget approaching, many enterprises will be hoping for a Budget that is good for business.”