Small firms demand Government U-turns as costs and red tape bite

Small and micro businesses are urging the Government to rethink a series of policies they say are pushing them to the brink. From rising business rates and higher employer taxes to mounting admin and shrinking support, owners warn that without urgent U-turns, more firms will close, hiring will stall and high streets will continue to decline.

More Government U-turns please

Small and micro businesses are the backbone of the UK economy, but right now they’re being squeezed from every direction: tax, rates, energy, borrowing costs, late payments, and a tidal wave of admin. Business groups across the UK are warning that unless the Government reverses some key decisions, Britain risks losing thousands more small firms. The Government proports to be supporting working people. Small and micro business owners are not only working people, but they supply nearly half of the private sector jobs in the UK. Without them support for working people will have to come from an increased welfare benefits budget. To keep the small and micro business owners working and creating jobs, we urgently need U-turns, please.

UK government red tape

U‑TURN ON BUSINESS RATES HIKES please

Business rates bills have jumped sharply for many high‑street firms after revaluations and the end of relief schemes.

Rates are due even when profits fall and small shops, cafés, salons and pubs are being hammered. There’s a double whammy because the people who use those businesses have less money to spend. Some face closure purely because of rates, not performance

Small firms need:

• A Freeze or a cut to the multiplier

• Retail/hospitality/leisure relief extended

• A full overhaul so rates reflect ability to pay

Please U‑TURN ON EMPLOYER NATIONAL INSURANCE INCREASES

Employer NI has risen, and thresholds have fallen, meaning small firms pay more for every employee. As wages are increased the NI and pension contributions also go up. Hiring is now more expensive, and many small firms have frozen recruitment. Some have cut staff or hours.

Small firms need:

• Reversal of the NI increases

• Thresholds raised

• Reductions in the cost of hiring the first employee

U‑TURN ON VAT THRESHOLD FREEZE please

The VAT threshold has been frozen for years, dragging more micro businesses into VAT as inflation pushes turnover up. Turnover is not profit or income. Firms deliberately cap growth to avoid crossing the threshold and VAT admin is disproportionate for micro firms. It punishes ambition.

Small firms want:

• The threshold raised

• The introduction of a smoother taper

• Simplification of VAT for micro businesses

U‑TURN ON MAKING TAX DIGITAL BURDENS please

MTD has added admin, software costs and complexity for the smallest firms. Micro businesses spend up to a fifth of their time on tax admin. Many don’t have accountants and if they do compliance costs are rising. The Government has promised to reduce the ‘admin burden’ by a quarter.

Small firms need:

• A pause and redesign of MTD

• Exemptions for the smallest firms

• The creation of a simple, single digital tax account

U‑TURN ON CUTS TO LOCAL BUSINESS SUPPORT please

Local Enterprise Partnership funding is uncertain given the loss of EU funds. Limited UKSPF allocations have gutted local business support.

Start‑ups are losing access to advice. When that happens, high streets lose resilience and local councils can’t meet demand.

Small firms need:

• Local business support funding restored

• Backing for digital-first tools like Business111.com

• Effective support for early‑stage businesses

U‑TURN ON ENERGY SUPPORT WITHDRAWAL

Energy support schemes for businesses were withdrawn while prices remained high.

Hospitality, manufacturing and care sectors are still struggling, and many micro firms face unaffordable bills.

Small firms need:

• Targeted support for energy‑intensive small firms

• Fairer standing charges

• Long‑term energy cost reform

U‑TURN ON COMPLEXITY: A SIMPLER TAX SYSTEM please

The tax system has become more complex, not less. The Simplification ambition has been disbanded. Micro firms drown in admin, which leads to mistakes, which are penalised and growth is stifled.

Small firms need:

• A simpler, clearer, proportionate tax system

• A single small business tax account

• Predictable rules and fewer changes

Small and micro businesses say they need the Government to reverse decisions that have increased their costs and admin at the same time as reducing their support, confidence and ability to hire, invest and grow.

Without these U‑turns, the UK will see more closures, weaker high streets, fewer start‑ups and lower long‑term tax revenue to the detriment of our public services.