YBC Response to Autumn Budget 2025 – A Missed Opportunity for the Backbone of Britain’s Economy
The Autumn Budget 2025 delivered yesterday by the Chancellor offered only a mixed blessing for the UK economy, and for the nation’s small and microbusiness sector, it represents a missed opportunity. While there are modest positives, the overall direction fails to recognise the unique challenges faced by sole traders, microbusinesses and the self-employed, the very backbone of local communities and entrepreneurial growth.
Some modest support but too little, too narrowly
- The Budget’s measure to introduce permanently lower business rates for many retail, hospitality and leisure properties is welcome, especially for small firms operating physical premises.
- Similarly, the decision to make apprenticeships free for SMEs may help smaller employers overcome one long-standing barrier to hiring and skills development.
These steps suggest a nod towards supporting smaller employers and bricks-and-mortar firms.
But for many, especially microbusinesses, sole traders and home-based businesses, the damage outweighs the gains
- The increase in dividend tax (a 2 percentage point rise on both basic and higher rates) will hurt small company directors and owner managed businesses that rely on dividends rather than traditional salaried income.
- Broader rises in tax burdens, combined with frozen income tax and National Insurance thresholds, effectively create “stealth tax” increases for many self-employed people even if headline rates remain unchanged.
- For microbusinesses with inconsistent cashflow or thin margins, these changes deepen financial uncertainty at a time when demand is weak and cost pressures are rising.
Despite the Budget’s overall ambition to “rebuild Britain”, small and microbusinesses have been left largely invisible, yet again.
Why this matters and what should come next
At a time when larger businesses and wealthy individuals face greater scrutiny and tax rises, the Government must not neglect the hundreds of thousands of sole traders, microbusinesses and community based enterprises who constitute the bedrock of the UK economy.
Our recent white paper illustrates how many microbusinesses already suffer from poor local authority engagement, “tick-box” policies and a lack of recognition in national economic debates. This Budget does little to change that. Without bespoke support, these businesses risk being squeezed out, undermining local resilience, entrepreneurship and the diversity of our economy.
We urge the Government and local authorities to:
- recognise and consult microbusinesses and sole traders when shaping business-support and economic policies;
- offer targeted financial and non-financial support including easier access to grants, business-rate relief, skills/training schemes, and tailored investment in community-based businesses;
- ensure that tax reforms do not penalise the self-employed or micro employers disproportionately; and
- integrate the voice of small business representative organisations such as YBC into future policy design and consultation.
Conclusion A Budget that falls short of backing Britain’s small business
Autumn Budget 2025 contains a few incremental measures that may benefit a subset of SMEs, but for most microbusinesses, sole traders and small family run firms the impact is negative. Without a broader, more inclusive and explicitly supportive approach, Britain risks undermining the very entrepreneurial energy it claims to want to harness.
YBC stands ready to work with Government and local authorities to ensure small business voices are no longer ignored.