Tax rises and fuel costs top concerns as 86% of small businesses fear budget announcements that would damage growth outlook

Wednesday 21st October 2026

Across the UK, 86% of small businesses fear the possibility of specific Budget announcements next week that, in their view, would negatively impact the growth outlook and finance of their enterprises – with rises to taxation, business rates and fuel duty topping the list of concerns, according to new research from Novuna Business Finance.

The findings come at a time when UK small business outlook is in the balance – with only around one in four (26%) saying they are forecasting growth for the final three months of 2026, set against 23% of enterprises fearing they will either contract or struggle to survive the winter months.

A mood of caution is evident among small businesses, with the percentage looking to invest in business growth by creating new jobs halving over the last four years, falling from 28% in 2022 to 15%. Looking to strengthen their businesses in 2027, only 8% of small business owners say they are considering overseas expansion, while just 5% are planning to hire young people they can train and develop.

The new poll of a representative sample of 1,382 small business owners by Novuna Business Finance suggests the widespread fears over next week’s Budget are a reflection of the fragile underlying confidence among UK small business owners, many of whom feel they would be unable to absorb any further increases in costs or taxes.

Key findings:

Whilst nobody knows what will be announced in next week’s Budget, the Novuna Business Finance poll gives an indication of the announcements that might be most damaging to small business confidence. The possibility of further rises to employer’s National Insurance (53%), VAT (47%), income tax (46%) and corporation tax (44%) were cited by small business owners as the Budget announcements that would most negatively impact the growth outlook and finances of their business. There was also concern over the impact of changing tax thresholds (25%), rising capital gains tax (24%) and the introduction of a wealth tax (19%).
Changes to business rates were also a major worry for 36% of small businesses – particularly for more established enterprises that have been trading for more than 20 years (57%).
Fuel costs remain a significant concern for many businesses. Nationally, 37% of small business owners said further taxes on diesel and petrol vehicles would negatively impact the growth outlook and finance of their business.
Further increases to wages for lower-income earners (26%) and the possibility of new rules for employers on flexible working and employee rights (22%) were also seen to be a challenge for some enterprises, particularly at a time when many are working to protect the stability of their cash flow while keeping rising costs and red tape under control.
Concern over pensions also featured, with 17% of small businesses expressing concern over any potential changes to salary sacrifice and pension arrangements in the 2026 Budget.

“The depth of concern over next week’s Budget, and the sheer number of issues small businesses are worried about, reflects the challenging economic environment in which they currently operate. Following the successive economic shocks from Brexit, the Covid-19 pandemic, and more recently, the cost-of-living crisis, UK small businesses have been forced to adapt to rising costs and unprecedented market uncertainty.

Given the importance of small businesses to the UK’s growth agenda, we need a Budget next week that supports the SME community. In recent months, there has been a focus on giving the public some breathing space from everyday financial pressures. The message from small businesses is that they need support too. Positive announcements in next week’s Budget could go a long way towards boosting small business confidence and strengthening their ability to power economic growth and create jobs across the UK.”

Jo Morris

Head of Insight

Novuna Business Finance

Potential Budget announcements that would negatively impact the growth outlook and finances of your business

Raising national insurance	53%
Raising VAT	47%
Raising income tax	46%
Rises to corporation tax	44%
Increasing fuel duty	40%
Further taxes on diesel or petrol vehicles	37%
Changes to business rates	36%
Further rises to pay levels / living wage for lower income earners	26%
Changing tax thresholds	25%
Raising Capital Gains Tax	24%
Changing VAT registration threshold for small businesses	24%
New rules for employers on flexible working and employee rights	22%
New rules on employees getting parental leave and sick pay	20%
Introduction of a new wealth tax	19%
Changes to salary sacrifice / pension arrangements	17%

Findings by industry sector

Autumn Budget announcements feared the most varied by industry sector:

Further rises to National Insurance were most feared in the property/real estate (61%) and transport/distribution sectors (55%).
Further rises to employer’s National Insurance was most feared by small business owners in the transport and distribution sector (68%).
The potential of increases to fuel duty was the biggest concern for small businesses in the construction (55%) and transport/distribution sectors (69%).
46% of small businesses in the hospitality and leisure sector were concerned about the prospect of changes to business rates.