This is an abbreviated article by Liz Barclay – read the full article at Business111.com/news
The Prime Minister has promised to “make life easier” for businesses and says he is “acutely conscious” of the pressures they face. Britain’s microbusinesses now need more than warm words. They need lower hiring costs, simpler taxes, affordable energy and regulation designed for firms without departments full of experts.
TACKLING THE COST OF DOING BUSINESS
Microbusinesses employing fewer than 10 people account for approximately 95% of the UK’s private-sector business population.
They are not miniature versions of large companies.
Most have no finance department, HR team or compliance officer. Every increase in tax, energy, insurance, rates or regulation reaches the owner directly.
Employer National Insurance has increased recruitment costs. Wages, energy, rates, insurance, materials and stock have all become more expensive.
At the same time, customers have less money to spend.
New employment obligations and Making Tax Digital add further administration. Each measure may be defensible in isolation, but small businesses experience them together.
Some stop investing or recruiting. Others close.
Cut the tax on jobs
Employer National Insurance is one of the clearest barriers to recruitment.
A targeted reduction for microbusinesses taking on employees could support apprenticeships, the Youth Jobs Guarantee and entry-level employment.
Almost one million young people are outside employment, education or training. Not all are actively looking for work, but many need a route into the labour market.
Microbusinesses can provide valuable first jobs—but not if employing somebody becomes unaffordable.
Fix commercial energy costs
Households have a regulated price cap. Businesses do not.
Small firms face standing charges, network costs, complicated contracts and punitive out-of-contract tariffs.
The government should improve transparency, simplify switching and support energy efficiency and suitable solar installations.
Long-term energy policy will not pay this winter’s bill. Businesses need practical relief now.
Simplify tax
HMRC estimates that businesses spend more than £15 billion a year complying with the tax system, separate from the tax itself.
Making Tax Digital can provide useful financial information, but quarterly reporting also creates software, bookkeeping and advisory costs.
The government should simplify VAT, smooth the registration cliff edge, reduce duplicated reporting and make requirements proportionate to business size.
A microbusiness should not need a finance department to pay the correct tax.
Reform business rates
Business rates penalise firms for occupying physical premises.
High-street shops, salons, workshops and cafés need fairer valuations, predictable bills, better relief and protection from cliff edges.
Hospitality reform is a start, but the problem affects every small firm operating from commercial premises.
Rates should encourage businesses to fill high streets—not punish them for opening their doors.
Stop insurance becoming unaffordable
Climate risks, rebuilding costs, cybercrime and higher claims expenses are feeding into premiums and exclusions.
Increases vary widely, but many small firms report substantial rises or difficulty securing appropriate cover.
A small-business insurance code could improve transparency, explain exclusions and require clearer reasons for large renewal increases.
If firms abandon important cover because they cannot afford it, one flood, accident or cyberattack could close them.
Make regulation proportionate
Microbusinesses must navigate employment law, sick and holiday pay, pensions, health and safety, GDPR, licensing and sector-specific rules.
Protections should remain, but compliance must become simpler.
Small firms need plain-English guidance, standard policies, coordinated implementation dates and advice before punishment for minor first-time mistakes.
A five-person firm should not need a legal department to employ people properly.
Remove EU trade barriers
Small exporters need simpler customs procedures, less paperwork, lower courier costs and clearer VAT rules.
Large businesses can employ customs specialists. A microbusiness may abandon an overseas customer because the administration costs more than the profit.
The Electronic Trade Documents Act created the legal basis for specified digital trade documents. The government must now encourage practical, affordable adoption by smaller firms.
The seven-point Budget test
If the Prime Minister genuinely wants to make business easier, the Budget must deliver progress on:
- Lower employer National Insurance
- Fairer energy costs
- Simpler taxation
- Reformed business rates
- More accessible insurance
- Proportionate regulation
- Easier EU trade
It cannot all be achieved overnight, but businesses need evidence of a change in direction.
Give microbusinesses certainty and they will recruit, invest, innovate and drive growth in every postcode.
Offer only reassuring words and Britain’s smallest employers will continue sinking beneath the rising tide of tax, administration and unavoidable costs.
Making life easier for business must begin by making survival possible.
This is an abbreviated article by Liz Barclay – read the full article at Business111.com/news
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