Business rates support announced in last week’s Autumn Budget leaves too many small firms without help, according to the Federation of Small Businesses.
The group welcomed increased relief for retail, hospitality and leisure businesses but criticised the decision not to extend it more widely, highlighting manufacturers, small exporters, nurseries and office-based employers.
Its response also challenged the Government over energy bills and the cost of taking on staff.
Tina McKenzie, national chair of FSB, said: “The increase in Small Business Rate Relief for small firms in retail, hospitality and leisure is welcome for those who will be lifted out of rates. FSB has campaigned hard for the threshold to be lifted for the first time since 2016, but it should have been applied much more widely.”
She added: “Small businesses blighted by the rates system aren’t just on the high street.”
The Government said the higher threshold would remove business rates bills for a further 70,000 retail, hospitality and leisure businesses in England. It also announced additional rates support for pubs, music venues and social clubs.
FSB’s criticism comes against a weak outlook in its latest national Small Business Index.
Of the business owners and sole traders surveyed, 47% expected revenues to shrink in the coming months, while 22% anticipated growth. Three times as many planned to reduce headcount as increase it, at 18% and 6% respectively.
The research involved 1,033 respondents surveyed between 10 and 24 September, before the Budget.
Tina said: “This Budget should have been the moment to help small businesses with the soaring costs holding them back, and the taxes restricting job creation. Instead, they got nothing to ease sky-high energy bills and nothing to make hiring someone more affordable, while the increase in business rates relief excludes too many.”
The Government’s wider energy package included support for eligible energy-intensive manufacturers from April 2027. However, FSB argued that the announcements did not provide enough help to change the outlook for small firms.
Despite its criticism, the group welcomed several measures intended to encourage enterprise.
Tina said: “Of the smaller measures announced, we’re pleased the Chancellor has acted upon our call to increase the Trading Allowance from £1,000 to £3,000. This will incentivise potential small business owners of the future to take the first steps to exploring a business idea, alongside the new Young Entrepreneurs Allowance. Parental pay rights for self-employed dads and partners is also a good step.”
FSB also welcomed the adoption of 14 of the 15 recommendations from the Small Business Regulation Taskforce, which it co-chaired. These included reversing plans to require even the smallest businesses to submit profit and loss declarations to Companies House.
However, the group called for urgent clarification of how the proposed Founders’ Relief would compare with Business Asset Disposal Relief.
The Government launched a technical consultation alongside the Autumn Budget. The proposed relief would offer qualifying founders and significant early investors in high-growth, innovative UK companies a 10% capital gains tax rate on qualifying share disposals, up to a lifetime limit of £10 million of gains, from 6 April 2027.
Tina said: “The Chancellor must urgently clarify whether he intends to tax or back those who spend a lifetime running and growing successful businesses.”
