Copyright standard
The potential Budget measures that London’s small business owners most fear are further rises to employer’s National Insurance, income tax and VAT hikes and increased taxation of pensions, according to new research. The findings from Novuna Business Finance come as small business confidence falls to a three year low. The percentage of owners predicting growth for the final three months of 2025 has fallen to 36%, its lowest level since the 34% recorded in the first quarter of 2021. Business confidence in London and around the country was badly hit by last year’s October Budget when the Chancellor unveiled big hikes in employer National Insurance rates. Novuna Business Finance asked London small business owners about their concerns about Rachel Reeves’s second Budget due to be delivered on November 26. Across London, 86% of small businesses said they feared the possibility of Autumn Budget announcements that would set back their plans for growth. Just one in ten said the Budget would not impact their business growth – and 4% didn’t know either way. Of those London-based small businesses that expressed concern over the business impact of possible Autumn Budget announcements, taxation was the biggest fear. Almost two thirds feared the prospect of further increases to employer National Insurance, with worries also about the prospect of income tax hikes (58%) and changes to VAT (54%). Changes to CGT or the introduction of a wealth tax were also frequently cited concerns. Personal finances were also a worry to many small business owners in London, with 43% worried about the possibility of heavier taxation of pensions and 21% concerned about the prospect on any changes to ISA allowances and tax on personal savings. Changes to fuel duty were a concern to more than one in four respondents. Jo Morris, head of insight at Novuna Business Finance, said: “For the last 11 years, Novuna Business Finance has been tracking small business growth outlook every quarter. “Major events such as Brexit, Covid, the Scottish Referendum 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 small business owners in London 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 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 London 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.”
