The UK’s payments on account system catches a lot of new sole traders by surprise. Payments on account are advance payments towards your next Self Assessment tax bill (in this case for the year 25/26). You pay them on top of any tax you owe for the previous (24/25) tax year. HMRC uses payments on account to help spread the cost of your tax across the year rather than collecting it all at once. They apply mainly to: • self employed people • landlords • anyone with untaxed income They are based on last year’s tax bill HMRC assumes your income next year will be similar to the previous year. So each payment on account is half of your previous year’s tax bill. You make two instalments • 31 January • 31 July You may also need a “balancing payment” If your actual tax bill ends up higher than the two instalments you’ve already paid, you pay the difference the following 31 January. If you paid too much HMRC will refund you. You won’t be asked to make payments on account if either: • your last tax bill was £1,000 or less, or • 80% or more of your tax was already collected at source (e.g., PAYE). If your tax bill last year was £3,000, HMRC will ask you to pay: • £1,500 on 31 January • £1,500 on 31 July towards next year’s bill. If your actual bill ends up higher, you pay the extra as a balancing payment the following January. It’s particularly tough to find the additional money to pay on account if you’re fairly recently self-employed and weren’t expecting it. You may have put aside money to cover tax on the amount you were earning but not to cover the additional amount. HMRC doesn’t automatically require new sole traders to pay tax on account in their first year. The rules above apply, You will have to make Payments on Account if both of these apply: Your tax bill for the year is more than £1,000, after subtracting any tax already deducted at source (e.g., PAYE). Less than 80% of your total tax was collected at source. If those conditions apply, HMRC will ask you to make: • First payment on account: 31 January • Second payment on account: 31 July Each is normally 50% of your previous year’s tax bill. You won’t have to make Payments on Account if: • Your tax bill is £1,000 or less, or • More than 80% of your tax was already deducted (e.g., you still have PAYE employment), or • HMRC decides your first year’s liability is too low to trigger the system. This is very common for brand new sole traders whose first year is part time, low income, or mixed with PAYE work. If: You start self employment in 2025/26 and owe £600 in tax. → No payments on account. You owe £2,500, but you also have PAYE employment that covered 85% of your total tax. → No payments on account. You owe £2,500, and PAYE only covered 20%. → Yes. You will have to make payments on account. If you’re unsure whether you’ll cross the £1,000 threshold, try to set aside 20–30% of your profits so you’re covered whether payments on account apply or not. This is an example where a qualified accountant can keep you right. You may worry that the fees will be too expensive but accountants will keep you safe and probably save you money in the long run. Check their qualifications. Unqualified people calling themselves accountants have been known to give poor advice.

A–Z of Starting a Small Business in 2026 Here are the basics. You’ll want more detail and perhaps assistance to get all the processes right. Business111’s search function will point you in the right direction. Accounting, Automation and AI Set up bookkeeping from day one. Use simple tools (FreeAgent, QuickBooks, Xero) and automate invoicing, reminders, and expenses. AI tools can draft proposals, chase payments, and analyse cash flow. Business Plan & Business Model You don’t need a 40 page plan. You need clarity on: • what you sell • who you serve • how you make money • how you deliver • what it costs A one pager is enough to start with and constantly review and revise it. Cash Flow All important. Cash flow is the No.1 reason micro businesses fail. Build a buffer, forecast monthly, and protect yourself from late payments. The figures in your business are what really tell you the story. Digital Presence Your online footprint is your shopwindow if your business is online only. That means: • a simple website • an online Business Profile • one social platform you show up on consistently Expenses & Efficiency Track every cost. Claim allowable expenses (keep the records) Streamline your processes from the start and avoid stress later. Funding & Finance Explore grants, start up loans, local authority schemes, and sector specific funds. January is a key reset point for many funding programmes. GDPR & Data Protection Even micro businesses must comply. Have a privacy notice, secure data storage, and clear consent processes. HMRC Registration Register as self employed or set up a limited company. Understand tax obligations, payments on account, and allowable deductions. Insurance Most businesses need at least: • public liability • professional indemnity • employer’s liability (if you hire anyone) • cyber cover is increasingly essential. Journey Mapping Map the customer journey from their first contact with your business to repeat purchase. This helps you design better experiences and reduces the chances of losing customers to your competition. KPIs (Key Performance Indicators) Track what matters: • leads • conversion rate • average order value • customer lifetime value • monthly recurring revenue (if relevant) Legal Structure Choose between: • sole trader • limited company • partnership • CIC or social enterprise Each has different tax and reporting requirements (see Business111 Resources) Marketing Strategy Pick one core channel and master it. Consistency beats complexity. Networking & Niche Communities Join local business groups, sector networks, relevant or specialist communities, and business forums. Businesses thrive through connections and sharing tips and best practice. Operations Document your processes early: • onboarding • delivery • invoicing • customer service • refunds This saves time and supports growth. Pricing Price for sustainability, not survival. Yopu won’t survive if you’re only breaking even or can’t pay yourself a salary. Review your prices regularly and make sure you aren’t undercharging, which is a very common business mistake. Quality Control Whether you sell products or services, create simple quality standards. Consistency builds trust. Risk Management Think about: • cyber security • compliance with the regulations such as tax and VAT • supply chain • financial risks • reputational risks A basic risk register is enough. Sales Strategy Know your offer, your value, and your ideal customer. Create a simple sales script or pitch. Tax Understand: • income tax • corporation tax (if Ltd) • VAT thresholds • payments on account • allowable expenses Set aside 20–30% of profits to stay safe. USP (Unique Selling Proposition) What makes you different? Your story, your values, your niche, your method, all contribute to your competitive edge. Visibility Show up regularly. People buy from businesses they recognise and trust. Website A simple, clean, accessible website is enough. Include: • what you do • who you help • prices (if possible) • how to contact you • testimonials eXpectation Management Set clear expectations with customers: • timelines • deliverables • boundaries • communication channels This reduces complaints and increases loyalty as long as you stick to your promises. Yearly Planning Set annual goals, quarterly priorities, and monthly actions. Review and adjust to make sure you can be agile enough to respond to changes. Agility is a superpower. Zero Burnout Your wellbeing is a business asset as is that of any people you take on. You need a zero tolerance approach to anything that undermines wellbeing. Set boundaries, take breaks, and build a support network to avoid the feeling of isolation. If you aren’t thriving the business won’t either.

It’s that time of year. Many of us are thinking about how we’ll do things differently over the next 12 months with the aim of making our businesses thrive. After all the disruption and uncertainty coupled with challenges like the rising cost of doing business and customers with less money to spend, a new year seems like the ideal time for new approaches. I’ve been looking for a list of 12 resolutions, one a month, to work on over the coming year and as my business friends tell me I have to be specific, make ambitions measurable and realistic or they will end up abandoned in January. Here's my list: Build a cash flow buffer of 3–6 months Businesses fail more from cash flow shocks than poor sales. A buffer gives stability, bargaining power, and breathing space and could mean you don’t have to borrow at huge expense during the year if you have an invoice that doesn’t get paid when you expect it to. Raise prices strategically rather than emotionally Many small businesses undercharge because they’re scared of losing work or sales. Review your prices regularly, benchmark against your competitors, and increase prices realistically, adding value if you can. Automate the things you can automate Get the tech tools to do the jobs that drain your time: invoicing, chasing payments, onboarding, scheduling, stock checks. Yes they cost but they’re a real investment freeing you up to spend on the business rather than in the business. Time is better spent thinking and planning than filling in forms. Diversify income streams 2026 is the year of multiple revenue channels: • digital products • subscription add-ons • partnerships • B2B services • seasonal bundles Even one new revenue stream can make a business more resilient. Get paid fairly Many businesses lose money to unfair payments like overdue invoices or unfair terms in a contract. Change that: • Check the payment terms offered and negotiate better ones • automate reminders • ask for deposits, up front payments to cover stuff you have to pay for before work starts, or payment in stages as work is completed • charge interest and compensation if the payments are overdue (this is set out in legislation) la • use invoice chasing tools Getting money in when you expect it to come in can save you the expense of borrowing just to stay afloat. Invest in keeping your customers rather than having to find new ones Returning customers cost less and spend more. Think about: • loyalty perks • follow up support • personalised check ins • feedback loops Gather your data Even the smallest businesses can track: • cost per lead • conversion rates • top performing products • busiest days • customer lifetime value When you collect useful data you can review them regularly and use them to decide next steps. Build you story and spread it Businesses win on authenticity. Refresh your brand story, update your website, and show up consistently on one chosen platform to increase trust. Create a 12 Month Content Plan • 4 themes • 12 monthly focuses • weekly posts A plan helps reduce stress and builds authority. Factor in your own wellbeing and boundaries Burnout is real: • set working hours • take breaks • delegate • protect weekends If you are healthier the business will be too. Review your compliance and risk management All the following need regular auditing: • data protection • cyber security • employment practices • accessibility Build your support network Businesses thrive with the help of mentors and business advisers as well as groups of people who all want to help each: • local business groups or groups in your sector • sector networks • minority led communities • disability inclusive business forums • peer groups You may think you don’t have time for networking but networking with the right supportive groups can save you time and save you stress, isolation and money, perhaps even save your business. Here’s wishing all businesses a prosperous and thriving 2026.

The new Employment Rights coming in 2026 and 2027 The UK Government’s Employment Rights Bill has been passed by Parliament and is expected to receive Royal Assent before the end of 2025. This Bill is a major shift in the UK employment landscape. The reforms included in the Bill will be phased in over 2026 and 2027 and cover unfair dismissal, sick pay, parental leave, zero hours contracts, fire and rehire, trade union rights, harassment protections, and more. Unfair Dismissal • The length of time an employee has to work for an employer (the qualifying period) in order to make a claim for unfair dismissal will be reduced from 2 years to 6 months. • The cap on compensation will be removed, meaning claims could be uncapped. • These changes are expected to come into force in January 2027. Employment Tribunal Claims • The time limit for bringing employment tribunal claims will be extended from 3 months to 6 months for most claims. • That change is expected to come into force in October 2026. Fire and Rehire • Dismissing and rehiring on worse terms becomes automatically unfair dismissal, except in cases where the employer can prove that it was genuinely financially necessary. • That change is also expected to come into force from October 2026. Trade Union Rights from April 2026 • Industrial action ballots: Minimum 50% turnout required will be required and if that’s the case a simple majority will be sufficient to allow strike action. • Union recognition: The thresholds will be lowered, meaning easier access to workplaces (physical and digital). Parental Leave & Sick Pay • Employees will have rights to paternity leave, unpaid parental leave, and statutory sick pay from day one of their employment. • Statutory Sickpay will be payable from day one and the lower earnings limit will be removed. • These changes will come in from April 2026. Zero-Hours Contracts • Employers must offer contracts with guaranteed minimum hours. • Compensation will be required for shifts cancelled at short notice. • These changes are expected from 2027. Harassment • Employers must take all reasonable steps to prevent sexual harassment and that will include harassment by third parties. This duty was Strengthened from October 2024, and will be expanded in 2026. Collective Redundancy • An employer who is making roles redundant and doesn’t consult the workforce following the regulations will face higher penalties of 180 days’ gross pay per affected employee from April 2026 Fair Work Agency • From April 2026 there will be a new enforcement body to oversee employment rights. What do employers need to do to prepare for the changes? • Update policies on sick pay, parental leave, and redundancy by April 2026. • Review dismissal procedures ahead of 2027 to manage risk of uncapped claims. • Prepare contracts for zero-hours staff to include guaranteed hours. • Train managers on the changes and on harassment prevention and union access rights. We'll be following the detials as they emerge and thinking about the unintented consequences for small and micro businesses.

The UK economy shrank by 0.1 per cent in October according to the Office for National Statistics (ONS). That’s on top of the 0.1% decline in September. There was no growth in August. The economy hasn’t grown since June. For a Government that put so much emphasis on the need for the economy to grow so that there’s money to spend of public services that’s not a good look. However, the word that’s been exercising me in the headlines is ‘unexpectedly’. Apparently, the fall was unexpected. Most economists were expecting to see a rise of 0.1 per cent for October, driven by Jaguar Land Rover’s recovery after the cyber attack on it in August which hit the manufacturing sector hard. I’m not an economist but as a business journalist I could often be heard to remark that if you asked 40 economists for their forecasts, you’d get 40 different assessments. So why then were economists apparently agreeing on the likelihood of growth? I think it’s because they are fixated on, and talking to, the wrong companies. The small and micro firms in the UK are the bellwether. What’s happening on the high streets, the industrial estates and on the other sector frontlines is where forecasts would be more accurately based. We’re in an economic mess with quiet quitting of small businesses going on all over the UK. Small business owners when asked are fairly optimistic about their own prospects next year but not about the wider economic picture or about the ecosystems they’re working in. The budget didn’t help, piling on the agony after the wages and NIC rises in April 2025. The shenanigans before the budget with the kite flying and leaks of supposed definite changes to be announced in the budget exacerbated the situation. Business owners kept their hands firmly in their pockets even if they did have money to spend, because of the uncertainty. I’d love to see the counter factual calculation that could show what the growth figure would have looked like had the seeds of uncertainly not been so widely and so frequently spread around the business community. The budget itself was a damp squib in terms of encouragement for businesses to get their hands out of their pockets and invest to grow. Small and micro owners, despite all the derogatory talk about lack of ambition for growth and productivity would love to adopt technology, hire talented people, reskill and upskill and grow. They need to feed families who are facing a cost of living crisis that’s been hanging around for years and they need to tackle their own cost to doing business crisis that’s been holding them back since 2008. We need support, radical solutions and a real voice at the table when the economists and politicians are musing about their forecasts and policies. The smallest businesses get the least air time but that’s the place to start. Given that there was next to nothing in the budget for the biggest business sector, the 0-50 employee businesses that provide 47% of the employment in the private sector, contribute £1,8trillion of our UK income and are the biggest innovators and job creators in good times, the budget needed to be radical, growth-focused and ambitious. Even the crumbs of good news, like more money for the British Business Bank to lend, weren’t new. We’re not growing, investing creating jobs and fewer of us are exporting. If you make it this hard for the small business owners, who are renowned for getting going when the going gets tough then you should be expecting the economy to reduce rather than grow. We need the government to understand the needs of small business, entrepreneurs, the risk-takers and reward them, encourage them, incentivise them and get their help to build a clear plan for growth. Only then, and of course I’m not an economist so what would I know, will we get 3 or 4% growth and that growth will lead to further growth. I do know that you have to build from the bottom up rather than the top down. Trickle down has been shown not to work. Trickle up can, with the will and the power, experience and innovation of our smallest businesses.

I’ve seen a flurry of questions over the weekend on the rules around selling your personal belongings that you no longer want. If you are simply selling stuff to get rid of it and declutter you aren’t running a business. If you’re selling things that you’ve made for the purpose of selling and making an income as a business, you’re trading. The rules are different in these cases. If you’re just selling your own unwanted personal belongings online, you usually don’t have to pay tax. However, if you sell items for £6,000 or more you may owe Capital Gains Tax, and if you’re regularly buying or making items to sell for profit, you may owe Income Tax once your earnings exceed the £1,000 trading allowance. Selling Personal Possessions No Income Tax if you’re simply selling unwanted possessions like clothes, furniture, phones, jewellery, or household goods Capital Gains Tax (CGT) may apply if a single item sells for £6,000 or more or a set of items (e.g., matching ornaments, book collections) sells for £6,000 or more in total. HMRC treats collections as one item for CGT purposes Trading vs Selling personal items: If you buy or make items to sell for profit (e.g., crafts, vintage resale, upcycling), HMRC considers this trading. You get a £1,000 trading allowance per tax year so if your total trading income is £1,000 or less, you don’t need to declare it. If it’s above £1,000, you must register with HMRC and submit a Self Assessment form every year on which you put the detail of you earnings from all sources and you may owe tax depending on your total income. Platform Reporting Rules (from 2025) Online platforms (e.g., eBay, Vinted, Etsy, Depop) must report sellers’ earnings to HMRC if: o You sell more than 30 items, or o Earn more then £1,735 in a year. This doesn’t automatically mean you owe tax, but HMRC will check if your selling counts as trading and will take your total income from all sources into consideration. Personal Tax Allowance Even if you have more income than the £1,000 trading allowance, you only pay tax once your total income (job + side sales or pension income or income from some other source) is more than the personal allowance (£12,570). However be carfeul. Even if items are second-hand, frequent resale for profit can leave you having to pay tax. Keep receipts and records of sales to prove whether items were personal possessions or trading stock. If you don’t declare trading income above £1,000 you could face fines.

Businesses cut jobs by 1.8% on average in November according to the Bank of England and it’s expected that there will be a further fall of 0.7% in the next year. Unemployment is already at 5% according to the latest ONS figures. When firms cut jobs and unemployment is growing people looking for work and finding that hard, often decide to take the big step into self-employment, setting up as a sole traders, working freelance or perhaps starting up a small business. The bills still have to be paid. People may not start out those ventures with the ambition to grow but that could become a possibility in future. For many though the question is ‘where do I find the information to help me get started’. We’ve set up www.business111.com for precisely that reason. People constantly tell me that they know the information is out there somewhere but they don’t know where or how to find it. Business111 is the tool to help you navigate to the sources of information you need. We’re not adding to the over-information. We know it’s already available. We want to help you find the right information for you at the right stage of your business. We’re at the start too and want to build from here. Register with us. It’s free. Then tell us what’s working and what isn’t, what you need that isn’t there, and add reliable sources you’ve found that have helped you. Share your experiences and reliable sources of help in our forum too. Let’s aggregate, curate and share to help each other and others thrive.

By Liz Barclay At least we know. After all the speculation we’ve had the budget, and businesses can get on with serving their customers and planning ahead. But the road is tough for many. What do the measure announced on 26th November say about how UK government sees small and micro businesses and entrepreneurs? The Budget was a mixed bag. It’s the first time I’ve heard ‘start-ups, scale-ups and entrepreneurs’ mentioned in a budget speech. I hoped, coming early in the speech, that signalled good stuff, but while there were targeted reliefs, such as extended business rates support and apprenticeship cost reductions, the overall package delivered higher wage bills, dividend tax hikes, and compliance burdens. Government says small businesses are the backbone of our economy and vital to society but prioritising fiscal consolidation and worker protections over entrepreneurial growth doesn’t leave small business owners feeling recognised and appreciated. We know the Chancellor had to balance feeble growth forecasts, stubborn inflation, and a challenging fiscal gap but support for the UK’s entrepreneurial backbone could make the job a lot easier. The biggest measure was the rise in the National Minimum and Living Wage from April 2026 (£12.71/hour for 21 and over, £10.85 for 18–20 year olds will earn £10.85/hour, and £8 an hour for apprentices and under‑18s. The Living Wage raises pay to £13.45/hour outside London and £14.80/hour in London). Business owners want to pay fairly. For small businesses in hospitality, retail, or care, higher wages may improve recruitment and retention but the increases will squeeze margins already under pressure. One distraught entrepreneur told me he’d planned to take on 5 people before the April 2025 increases. Now he’s expecting another huge payroll increase in April 2026. That’s a few more jobs he’s no longer planning to create. All the businesspeople I know think their people deserve more but they want to do that by growing the business so they can afford to increase wages. There’s also the knock-on impact. If colleagues are getting wage increases everyone else in the workplace wants and deserves recognition too and it all pushes the national insurance bill ever higher. Can businesses absorb the increasing costs, or do they have to raise their prices while risking losing customers who can no longer afford their products or services? The Budget confirmed a 2% increase in dividend tax rates from April 2026. For small business owners who pay themselves via dividends, that’s less take‑home income. Combined with corporation tax, it reinforces the sense of “double taxation” on entrepreneurial spirit. I know quite a few businesspeople who can no longer afford to pay themselves at all. Their income is going down while the risks of being innovative and entrepreneurial are becoming too onerous. There’s quiet closing going on and unemployment is rising. The budget also brought property tax increases, savings income tax rises and a £2,000 cap on salary‑sacrifice pension contributions. The good news is: Lower business rates for over 750,000 retail, hospitality, and leisure properties, worth nearly £900m a year from April 2026. A £4.3bn support package will cap bill increases for those hit hardest by revaluations. This should protect some independent pubs, shops, and cafés. Apprenticeships will be more affordable and potentially boost youth employment. The Enterprise Management Incentive (EMI) scheme will be expanded from April 2026, to cover firms with up to 500 employees and £120m in assets allowing more ambitious businesses to retain talent through tax‑advantaged share options. Fuel duty is frozen until September 2026, helping logistics and deliveries. Train fares are frozen until March 2027 helping commuting employees. There’s also a consultation on making tax incentives more “founder‑friendly,” recognising that entrepreneurs need tailored support to start, scale, and stay in the UK. However, that’s where the sweeteners end. Even extending the sugar tax to mass‑produced milkshakes and lattes, will cause some firms sleepless nights and the 3 pence per mile tax on electrical vehicles wasn’t factored into anyone’s careful financial forecasts when they decided that buying an EV would be worth it. I feel the budget paints a picture of a government that values small businesses as employers and community stalwarts, but wants them primarily to deliver worker protection and revenue rather than to be encouraged to invest. Wage rises, dividend tax hikes, and compliance measures dominate, while reliefs are targeted narrowly at high street firms and apprenticeships. The expansion of EMI and consultation on founder‑friendly tax incentives may be positive signals but policymakers need to balance worker protections with genuine support for the risk‑takers who create those jobs, innovate and build resilience across the economy. There’s still a long way to go.

By Liz Barclay The markets are calm following the chancellor's budget speech. I'm not sure the same can be said for small businesses: minimum and living wage increases, dividend tax rises and the compliance costs associated with the employment rights bill are just the direct costs. Freezing income tax thresholds and various other additional tax costs on members of households could leave the small business owner in the home with less room to use family income to bootstrap their business if that's their preferred way of funding additional business costs. All the scary stuff that was leaked ahead of the budget may not have come to pass but the damage was done as businesses held onto any resources and didn't invest. We've lost a year of investment that could have increased productivity and contributed to valuable growth. Instead productivity fell by 4.6% in the third quarter of the year due to the speculation and uncertainty. One change the Chancellor announced that may have been missed is that both the Federation of Small Businesses (FSB) and Small Business Britain pressed the Chancellor to make apprenticeships more affordable and flexible for SMEs, focusing on scrapping co‑investment costs and reforming the levy. They rightly emphasised youth employment concerns and highlighted apprenticeships as a key route to tackle skills shortages and youth unemployment, asking for targeted support for under‑25s. They wanted apprenticeships for young people in small firms to be fully funded, removing the co‑investment requirement. The Chancellor announced in response that: Co‑investment will be scrapped for under‑25 apprentices in small businesses, training costs will now be fully funded, extending previous relief (which only applied up to age 21) to cover 22–24 year olds, and £820m “Youth Guarantee”: Funding will ensure every 18–21 year old gets a place in college, an apprenticeship, or personalised job support. Future reforms were promised: Treasury documents mention simplifying apprenticeship standards and introducing short courses from April 2026. However, levy reform and broader flexibility remain unresolved, meaning small businesses will still face structural barriers in how apprenticeship funding can be used. I expect further campaigning on levy reform and flexibility. The government also announced plans to introduce mandatory e-invoicing for all VAT invoices. This is to come into force in 2029 and a roadmap to implementing this mandate will be announced in the 2026 Budget. Starting from January 2026, a co-creation process will begin where government will work closely with businesses, representative bodies, software providers, and internal teams to develop the policy and delivery approach. Small businesses may worry about the costs of implementing e-invoicing and the inconvenience of onboarding to customers’ systems but those problems should be ironed out between now and implementation. The upside of this move is that small businesses should find their invoices get paid quicker, there’s less room for making errors in billing etc and there’s less time consuming paperwork to contend with, all making the business more productive. Another announcement in the Chancellor’s Budget that might affect some small businesses is a major expansion of the Enterprise Management Incentive (EMI) scheme, effective from 6 April 2026. The scheme is one of the UK’s most powerful employee retention tools and allows growing companies to continue rewarding and retaining talent with tax advantaged share options and by expanding it the government aims to strengthen the UK’s entrepreneurial ecosystem. Instead of being limited to firms with a maximum of 250 employees it will be open to those with up to 500 and a new higher asset limit of £120million. Employees will be allowed a maximum of £6,iooiom in share options instead of the current £3million and to hold them for up to 15 years instead of 10. Importantly, the extension can also apply retrospectively to existing EMI contracts that haven’t yet expired or been exercised. It’s designed to make EMI more “founder-friendly” and accessible to scale-ups that were previously exempt, as well as start-ups. If the longer exercise periods and higher option limits make EMI more attractive for employees they are more likely to stay with the firm. This is highly unlikely to be a feasible scheme for micro businesses but bigger amll businesses may want to think about it if they would qualify. You could use the higher option limits to design more competitive employee incentive packages.

By Liz Barclay - 4 December 2025 The Budget has been and gone — and small business owners across the UK are left wondering whether anyone in government truly understands what they’re living through. In the weeks since the Chancellor sat down, the one word I keep hearing is disappointment. The second is fear. For many, this Budget was not just another fiscal event. It was a moment of reckoning. A chance for policymakers to recognise that small and micro firms are running out of road. Instead, what arrived felt like a Budget made with large organisations in mind, while the smallest — the cafés, tradespeople, childminders, hairdressers, shopkeepers and care providers — were once again expected to “cope”. But small business owners aren’t an abstract economic category. They’re people. They’re the woman who opens her café at 6am and goes home after the chairs are stacked, wages run and rotas rewritten for the third time that week. They’re the electrician who hasn’t had a holiday in three years because saying no to work means saying no to income. They’re the childminder sending invoices at midnight and tackling safeguarding paperwork long after her own children are asleep. They’re the care agency owner covering night shifts herself because she simply can’t find enough staff. These people hold communities together. They employ our neighbours. They train our teenagers. They keep our elderly relatives safe and our boilers working. When they struggle, communities struggle. When they close, high streets hollow out and opportunity disappears with them. And right now, many are closer to that cliff edge than at any point in recent memory. The pressures that built up throughout the year haven’t gone away just because the Budget has passed. Employment costs remain crippling. The increase in employer National Insurance earlier this year — from 13.8% to 15%, with the threshold cut from £9,100 to £5,000 — still means a café, care agency or workshop is paying hundreds more per employee. Pair that with the higher National Living Wage of £12.21 for over-21s, and payroll costs have risen by 10% or more almost overnight. In the conversations I’m having daily, owners tell me they’ve stopped paying themselves altogether. Not because business is booming, but because they’re trying to shield their employees from the impact of rising costs. Meanwhile rents and rates remain high, insurance premiums have jumped, and late payments — costing the economy £11bn a year — continue to choke cashflow. Paperwork still swallows hours that should be spent serving customers. And customers themselves are spending less. The Budget should have been an opportunity to restore confidence. But confidence remains on the floor. Small businesses didn’t get the clarity or relief they needed. Rates relief was too limited. The hoped-for rethink on employer NI didn’t materialise. There was little to tackle overdue payments or the crushing administrative burden. For too many firms, survival mode continues. What small businesses need now is not warm words. They need targeted, practical action. We still need a rethink on employer NI. If the government wants rising wages, it must ensure employers can afford them. A targeted NI relief scheme for micro employers — particularly in care, hospitality, retail and other low-margin sectors — could stop job losses before they happen. We still need meaningful business rates reform. Reliefs help some of the time, but the underlying system is outdated and unfairly penalises bricks-and-mortar firms with small turnovers. We still need strong enforcement against late payments and excessively long contractual terms that allow big firms to sit on small suppliers’ money for months. And we urgently need to reduce the administrative burden. Right now, compliance is a hidden tax on growth. A simple, joined-up digital portal designed with micro businesses — not just accountants — would save days, even weeks, each year. Small business owners are not asking for special treatment. They are asking for a fair chance. They want rules that reflect how they actually operate. They want support they can access before crisis hits, not after. And they want policymakers to see them as people, not footnotes. The danger now is that they make the only decisions left: not hiring, not investing — and too often, not continuing. I speak to owners who no longer replace staff who leave because the risk is too high. Others are switching employees for freelancers to ease National Insurance pressure. Many are cutting hours because they can’t cover shifts and payroll at the same time. Some are taking home next to nothing, leaving their own families unable to pay the bills. These warning lights aren’t amber. They’re red. The Budget is behind us. The consequences lie ahead. If the government wants growth, prosperous communities and a resilient economy, it must show — clearly — that it understands the real people behind small businesses. When they thrive, the country thrives. When they are pushed to breaking point, we all feel the consequences. It isn’t too late to give them a fighting chance. But it has to start now — before too many decide they simply can’t keep going.