London Small Business Owners Fear Tax Increases Ahead of November Budget

Focus Keyword: London Small Business

As the anticipation builds for Rachel Reeves’s second Budget announcement scheduled for November 26, small business owners across London are increasingly concerned about potential tax hikes that could impact their growth strategies. Recent research from Novuna Business Finance reveals that small businesses are bracing for significant financial shifts, marking a troubling trend in confidence levels.

Declining Confidence Among Small Business Owners

Significant Drop in Growth Predictions

The latest survey indicates that confidence among London’s small businesses has plummeted to a three-year low, with only 36% of owners anticipating growth in the last quarter of 2025. This figure is notably down from the 34% recorded during the first quarter of 2021, underlining a serious decline in optimism.

Impact of Past Budgets

The unease in the business community can largely be traced back to the previous October Budget, during which the Chancellor announced substantial increases in employer National Insurance rates. This decision negatively affected business confidence not only in London but across the entire UK.

Key Concerns Surrounding the Autumn Budget

Fear of Increasing Tax Liabilities

In light of the forthcoming Budget, Novuna Business Finance conducted a study targeting London small business owners. An overwhelming 86% expressed concern that new announcements could derail their growth plans. Alarmingly, only 10% felt that the forthcoming Budget would have no effect on their businesses, while 4% remained uncertain.

Major Taxation Fears

Taxation appeared as the primary concern for respondents, with almost two-thirds worried about further increases to employer National Insurance. Additionally, 58% feared hikes in income tax and 54% worried about changes to VAT. There are also fears regarding possible adjustments to Capital Gains Tax (CGT) and the introduction of a wealth tax.

Personal Finance Concerns

The repercussions of potential tax changes don’t just stop at business finances. Personal financial health is a growing concern for many small business owners, with 43% worried about the potential for heavier pension taxation and 21% anxious about changes to Individual Savings Account (ISA) allowances and personal savings tax. Furthermore, over a quarter of respondents expressed concerns regarding possible alterations to fuel duty.

Insights from Industry Experts

Jo Morris, the head of insight at Novuna Business Finance, remarked, “For the last 11 years, Novuna Business Finance has been tracking small business growth outlook every quarter.” Highlighting the importance of understanding the business landscape, she explained, “Recent findings reflect the worries of small business owners in London about both current challenges and future fiscal policies.”

Morris emphasized that these concerns are not simply speculation about the upcoming Budget. Instead, they represent a broader sentiment regarding the mounting pressures faced by small businesses, which include rising supplier costs, energy prices, and staffing expenses.

The Need for Supportive Policies

Morris asserted the urgent need for a “Budget for Business,” urging policymakers to ease the tax burden, reduce operational costs, and make hiring more affordable. “Small businesses in London cannot continue to absorb market pressures,” she warned. Addressing these issues could be pivotal in fostering growth as we head into 2026 and beyond.

Conclusion

As London’s small business owners navigate a landscape marked by uncertainty and declining confidence, all eyes are on the upcoming Budget announcement. The potential for tax increases looms large, raising critical questions about the future of how these businesses will operate and grow. For sustained economic vitality, it is clear that targeted support measures are necessary to ensure that the ambitions of small businesses do not become overshadowed by financial burdens.

For a thriving future, London small businesses require not just governmental attention but actionable solutions that can provide the stability and growth opportunities they desperately need.