Shevaun Haviland, Director General of the British Chambers of Commerce, warned that “businesses are feeling battered and bruised by the heavy cost pressures looming within days” ahead of the Chancellor’s Spring Statement.
And she urged Rachel Reeves to use the Statement to offer some respite.
“From next week,” she said, “firms face an unpalatable menu of higher national insurance and minimum wage bills, coupled with the impact of further US tariffs. There will be little escape for businesses, with our research showing 82% of firms will be impacted by just the NI rise.”
And she outlined the Chamber’s demands of the Chancellor in clear terms. “We want to see her outline a wider tax roadmap, which includes national insurance and business rates, giving firms a clearer idea of when costs will be lowered.
Most commentators agree that Rachel Reeves is unlikely to reveal any surprises, but there are several elements that will have implications for businesses and employees alike, be it from the implications of NiC to drivers considering vehicles through salary sacrifice or the rise of Fintech.
On entrepreneurship, Jamie Roberts, Chief Investment Officer at YFM Equity Partners, cut to the chase when he said the Autumn Budget “left a very sour taste in many entrepreneurs’ mouths” with real fears of what tax changes will mean for their businesses, exits and future plans.
The rise in CGT, in particular, has highlighted not only the unfair cost of success but also the retirement funding gap. Many entrepreneurs, who have taken significant risks and often forgo pensions to reinvest in their businesses, now face higher taxes on the very exits they’ve relied on to fund retirement.
Meanwhile, in some parts of the country, around £1 in every £4 of council tax receipts goes towards funding civil servants pensions – a stark contrast to the treatment of entrepreneurs.
If entrepreneurs are discouraged from scaling businesses due to increasing tax burdens like this, investment and innovation will suffer.”
On tax relief, Natasha Guerra, CEO of Runway East agreed that the Autumn Budget was “painful for businesses”, and noted the exodus of wealth driven by severe tax hikes, a withdrawal of much-needed investment, and a downward spiral in productivity.
“I hope to see a comprehensive package aimed at reducing the financial strain on small businesses, particularly regarding national insurance contributions,” she added. “The cost of doing business has risen dramatically, with many SMEs struggling under high operating costs, mounting energy bills, and complex regulations.
“I would also like to see targeted tax reliefs or incentives to ease the burden, especially for businesses still recovering from the pandemic’s impact. Simplifying business rates would make a significant difference, as the current system is overly complex and disproportionately affects smaller businesses that lack the resources of larger corporations.
On Fintech, Darren Cran, CEO at AccountsIQ, said a key concern will be to ensure investment keeps pace with the rapid advancements in technology, rather than falling behind.
“While the UK is renowned for its strong growth, particularly in the fintech sector, investment levels continue to lag behind those seen in the US. If this gap worsens, it will create serious challenges for innovation, scaling businesses, and the long-term growth of the UK’s technology ecosystem.”
He added: Technology is an enabler for all businesses, and the government should support UK businesses in transitioning away from outdated systems that hinder growth toward an agile, AI-driven future. With the right investment climate and a focus on fostering business success, the UK can solidify its position as a global tech leader.
On NIC, Todd Davison, MD of Purbeck Insurance Services referenced a survey that suggests a third of businesses plan to raise prices to mitigate the uplift or introduce staff benefits instead, and 39% plan to offer staff more flexible benefits in lieu of salary (21%) or salary sacrifice benefit schemes (18%)
As a result, he said: “There is little doubt the NIC hike is making businesses think hard about where they can save on their salary bills.
“This may have unintended consequences for those SMEs competing for skills against larger businesses with deeper pockets as well as those that offer overtime pay and bonuses. It all adds to the strain on finances that we see first-hand. Ultimately if the NIC hike impacts cashflow we could see even more businesses going to the wall.”
On Foreign Income, Stephen Abletshauser, Wealth partner at law firm Spencer West LLP said the statement represents “a golden opportunity” for the Government to pivot and broaden the appeal of the Foreign Income and Gains (FIG) and Temporary Repatriation Facility (TRF).
He added: “In the case of the FIG, it would make sense to lengthen its potential timeline to, say, 7-10 years to make it internationally competitive given most comparable systems last for 10 to 15 years (say in Italy or Greece).
“In the case of the TRF, it would also make sense to allow for such remittances be made at favourable taxation rates beyond the 2027-2028 tax years to allow for careful planning and sensitive timelines which may apply to the nomadic international families and capital the new regimes wish to entice, retain and stimulate.
“Additionally, might the Government consider specialised tax regimes for the newly introduced international capital not only for UK situs Research and Development in key growth areas such as efficient energy generation (and storage), and AI but also for investment in deprived areas akin to the US’s Opportunity Zones from 2017.
“The UK needs to attract investment beyond the confines of London and the home counties.”
On funding, Hannah Fitzsimons, CEO of Cashflows described the financial landscape as increasingly challenging. The funding gap for SMEs is widening, and we’re seeing alarming statistics: 40% of SMEs have been forced to pause operations due to a lack of finance, while over a third face the risk of closure.
With traditional lenders tightening their purse strings and economic uncertainty persisting, business owners must explore alternative funding solutions to secure their future.”
“We didn’t see much relief for the UK’s companies, big or small, in the last budget, and there hasn’t been any indication that it will come in the next. The UK government has limited options to manage current challenges other than cutting expenditure, and this means that the relief that the country’s small businesses need may not be coming. One of the key things that businesses need is funding: companies need it to start in the first place and to keep going through difficult times#
“The impact of inadequate funding is far-reaching. It not only threatens business survival but also stifles innovation, limits job creation, and hinders economic progress.”
On logistics, Lash Saranna, CEO of EZOO, predicted: “The first and most widely publicised change is expected to be an incremental increase in Benefit-in-Kind (BiK) tax for electric vehicles. From the current base of 2%, BiK will increase by a flat rate of 1% year-on-year between April 2025 and April 2029.
“While impacting drivers that lease their vehicle through salary sacrifice, costs will only rise very nominally. What’s more, it’s important to compare BiKs for electric vehicles against petrol or diesel cars, which have a maximum rate of 37%. In comparison, the BiK savings between internal combustion engines (ICE) and EVs could be thousands of pounds every year.”
With regards to a likely rise in road taxes for all petrol, diesel, hybrid and electric cars, he said: “During the first year of ownership, vehicles emitting more than 91g/km CO2 will pay double rates (£390), while those emitting more than 255g/km will be taxed a staggering £5,490. EVs, in comparison, will pay a nominal £10 per annum.
“After the first year, all vehicles will move to an updated annual rate of £195, which means that an EV driver could pay £5,000 less road tax charges over a three-year vehicle lease. A massive saving, both from a financial and a carbon emissions perspective.”
In summary, he said: “Whether BiK, NICs, road tax or luxury car supplements, the updates expected mean that driving a car will become – in simple terms – more expensive. However, despite this fact, salary sacrifice schemes remain the most cost-effective way to get behind the wheel of a new EV – not just for employees, but for employers too.
www.ezoo.uk.
On forecasting, Sabby Gill, CEO of Dext said: “Businesses are under significant pressure. Dext research shows a third of business leaders are losing sleep over concerns about meeting payroll, while the Companies House register shrank between October and December 2024 for the first time since quarterly records began in 2012. Against this backdrop, it’s more important than ever for businesses to plan and adapt quickly to shifting economic conditions.
“When planning, businesses should explore multiple outcomes and scenarios to understand the potential impact of measures such as the rise in employer National Insurance contributions.
“Leveraging up-to-date financial data and embracing automation will help businesses identify key drivers – like regulatory changes or supply chain disruptions – that could affect operations, cash flow, and growth. Developing and testing various strategies will allow businesses to mitigate risks and position themselves for long-term success.”