Craig Beaumont, executive director of the Federation of Small Businesses, has been in recent discussions with both the Chancellor and Prime Minister ahead of this week's Budget, pressing for tax relief measures for entrepreneurs. Beaumont revealed that even Labour acknowledges the tax burden has become excessive, noting that in 2028 it will reach its highest level since 1948 under Stafford Cripps. The FSB, which represents 200,000 members, is seeking changes to help the self-employed and small firms navigate the current economic climate.
Top of the FSB's agenda is increasing Small Business Rate Relief from the current threshold of £12,000 to £25,000. Beaumont said this change would remove at least 250,000 more small firms from paying rates, though the cost would be less than a billion pounds. The group also wants an increase to the Employment Allowance, which currently allows firms to reduce their annual employers' National Insurance bill by up to £10,500 per year. According to Beaumont, uprating and indexing this allowance in line with the National Living Wage would cost about £450 million and would particularly help smaller firms hiring younger workers.
Beaumont pointed to employment costs as a significant barrier to hiring, attributing 200,000 missing jobs in the economy to the rise in employers' National Insurance introduced in 2024. The FSB is also concerned about Business Asset Disposal Relief, which determines the capital gains tax rate entrepreneurs pay when selling or closing their firms. The rate has increased from 10 per cent to 14 per cent and now 18 per cent, and Beaumont called for it to be reduced, arguing it amounts to double taxation for limited company owners who have already paid corporation tax.
Beyond the Budget, Beaumont highlighted other challenges facing small businesses. Meta has been shutting down Facebook pages for small firms after wrongly flagging them for violations, and the platform is charging for links in posts over two per month, making online business more expensive. Recent Companies House reforms requiring directors to verify their identity have created difficulties, while the registration fee has doubled from £50 to £100. Additionally, firms must now submit profit and loss accounts to Companies House separate from those sent to HMRC at different times.
On a positive note, Beaumont said government is working on measures to combat late payments, with plans to cap business-to-business payment terms at 60 days. The FSB's July survey showed the lowest share of firms expecting to grow since 2014. The group is also backing a campaign to address the postcode lottery on osteoporosis treatment, citing £159 million of productivity lost to the economy annually and as many as 1.5 million workdays lost due to the condition.
Small business owners face a challenging environment with elevated employment costs, regulatory burdens and reduced growth expectations, meaning Budget relief measures could significantly affect hiring and expansion plans across the sector.