8 In 10 Welsh Small Businesses Fear Autumn Budget

Further rises to employer’s National Insurance, income tax and fuel duty are the possible Autumn Budget announcements that Welsh small business owners fear the most, according to new research from Novuna Business Finance.

These findings come at a time when small businesses confidence in Wales for the Christmas trading period is already at a low ebb – the Novuna Business Finance tracking data revealing that only 26% of Welsh small business owners predict growth for the final three-months of the year.

With small business growth forecasts already fragile in the Wales, Novuna Business Finance asked Welsh small business owners about their thoughts on November’s Autumn Budget. Across Wales, 82% of small businesses said they feared the possibility of Autumn Budget announcements that, in their view, would adversely impact their plans for growth. Set against this, just 13% said the Budget would not impact their business growth – and 5% didn’t know either way.

The Budget announcements that would hurt Welsh small businesses the most

Of those Welsh small businesses that expressed concern over the business impact of possible Autumn Budget announcements, taxation was the biggest fear – 63% fearing the prospect of income tax increases, with worries also about further National Insurance hikes (59%) and increases to VAT (45%). In addition, 33% of respondents were worried about changes to tax thresholds, the point at which Welsh small businesses start to pay tax. 

Fuel was also a major issue in Wales – well above the national average – with 56% of respondents worried about the risk if increases to fuel duty and further taxes on diesel or petrol vehicles (44%).

At a time when many enterprises are struggling to keep fixed costs down, a further 32% of Welsh business owners expressed concern over the prospect of rises to the minimum pay for low earners.

Beyond this, personal finances were also a worry to many small business owners in Wales, with 36% worried about the possibility of new taxes on pensions and 23% concerned about the prospect on any changes to ISA allowances and tax on personal savings. 

Top small business concerns over the forthcoming Autumn Budget in Wales

Raising income tax	63%
Raising national insurance	59%
Increasing fuel duty	56%
Raising VAT	45%
Further taxes on diesel or petrol vehicles	44%
Tax on pensions	36%
Changing tax thresholds	33%
Raising the minimum pay rates for low earners	32%
Raising Capital Gains Tax	26%
Employers bound to offer flexible working / a 4-day week	23%
Cuts to the ISA/ personal savings allowance	23%
Lowering the VAT registration threshold for small businesses	22%
Employees getting parental leave/statutory sick pay from day one of a new job	21%
Banning zero hours contracts	17%
Introduction of a new wealth tax	15%
Changes to salary sacrifice options	4%

Findings by industry sector

Autumn Budget announcements feared the most varied by industry sector:

·      Further rises to National Insurance were most feared in the  transport and distribution sector (68%)

·      The possibility of rises to Income Tax and Capital Gains Tax were the greatest cause of concern in the real estate sector (68% and 51% respectively)

·      The prospect of rises in VAT and also the lowering of VAT thresholds worried small businesses the most in the retail sector, where growth outlook has been fragile (63% and 37% respectively)

·      Small businesses in the construction sector were the most worried about the possibility of increases to fuel duty (55%) and any further taxes on diesel or petrol vehicles (55%)

·      Changes to tax thresholds was the biggest concern for small businesses in the agricultural sector (45%)

Jo Morris, Head of Insight at Novuna Business Finance comments: “For the last 11 years, Novuna Business Finance has been tracking small business growth outlook every quarter. Major events such as Brexit, COVID and Budgets are all moments when we have captured the impact of events on small business outlook. The latest findings are not about double-guessing what will or won’t be in the Autumn Budget, but the findings tell us a lot about how Welsh small business owners see the world and what may help or hinder their growth. Recent quarters have seen consecutive falls in small business confidence and this is perhaps 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.”