A leading small business organisation is calling on policymakers to urgently address a growing gap in public debate: how the UK will sustain its tax system as automation and artificial intelligence reduce reliance on human labour.
With government revenues still heavily dependent on income tax and employer contributions, the rapid rise of AI and automation raises fundamental questions about how public services will be funded in the future. The issue mirrors a similar long-term challenge facing the Treasury as fuel duty declines with the transition to electric vehicles.
Your Business Community (YBC) warns that without reform, the burden of taxation risks falling disproportionately on small and microbusinesses, which remain more labour-intensive and less able to benefit from large-scale automation.
Ted Wigzell, Founder of YBC said:
“As automation reshapes the economy, the tax system is not keeping pace. We risk creating a situation where businesses that employ people face increasing costs, while those that replace jobs with technology reduce their tax contribution.
This is not just about government revenue, it is about fairness. Small businesses are more reliant on human labour and are already navigating a complex and costly tax environment. Without reform, they will be placed at a growing disadvantage.
We have already seen how slow policy adaptation creates problems, as with fuel duty and electric vehicles. We should not repeat that mistake on a much larger scale.”
The organisation is now writing to MPs across the UK to encourage early discussion on how the tax system can adapt to an increasingly automated economy, and to ensure that small businesses are not left carrying a disproportionate share of the burden.
YBC is calling for a forward looking review of the UK tax system, with a focus on:
- Ensuring fair contribution across labour and capital
- Reducing structural disadvantages for small businesses
- Simplifying compliance for microbusinesses
- Future proofing public revenues in a changing economy
For media enquiries or to arrange an interview, please contact:
Ted Wigzell on 020 3973 6343