The BOSS and the Budget

Optimism only takes you so far. Whether they think it’s half full or half empty, Britain’s business owners are finding it impossible to ignore that the cup’s leaking. S&W’s new Business Owners Sentiment Survey (BOSS) finds a tough economic outlook, international uncertainty and looming tax changes taking a toll.  

It’s true that our survey of 500 owners of businesses with at least £5 million in revenues shows entrepreneurs continuing to back their firms to beat the odds. Many are pursuing ambitious plans for growth abroad, for example:  

• 39% are looking to expand to the US within five years 
• 43% looking to expand within Europe in the same period 

On the other hand, they are concerned about a wide range of challenges they identify as having the potential to negatively impact their businesses. These include global political uncertainty due to trade tariffs (23%), internal threats and fraud (22%), changes to workers’ rights in the Employment Rights Bill (21%) and competition from AI-enabled new market entrants (21%).  

Owners are feeling the strain, and, in many cases, staff and customers also suffer:  

• 45% say price rises were likely or very likely in the next 12 months 
• 39% say a hiring freeze is likely or very likely in the same period 
• 38% say the same for redundancies  

This is bad news for the government, too, especially when it is facing stubborn inflationary pressure and is desperately in need of economic growth to balance the books. But, according to the business owners we surveyed, its policies aren’t helping.  

Almost four in ten (39%) BOSS respondents agree strongly (13%) or somewhat (26%) that the last Budget worsened the prospects for their business. Only 29% disagree. Even more agree strongly (18%) or somewhat (26%) that the government’s policies toward business are deterring them from starting a new business or expanding their existing enterprise – again badly undermining the government’s growth agenda. Again, far fewer (28%) disagree.  

This has real economic effects. The increase in employers’ national insurance contributions in the last Budget, particularly, has hit hard and, worryingly, its impacts aren’t over:  

• Almost one in five (19%) say they have already reduced headcounts because of the change, for example, while 28% say they are planning on cuts unless the Chancellor announces measures to address the rising cost of employment in the forthcoming Budget. Another one in five (19%) say they plan to reduce staff numbers even if the Chancellor offers some relief
• Similar numbers say they have introduced hiring freezes (18%), are planning to in the absence of help from the Chancellor (26%) or plan to regardless of additional support (23%)   

Many business owners are now questioning the government’s commitment to enterprise and their own commitment to the UK: Four in ten (40%) owners say they are considering moving their business abroad because they don’t consider the UK to be supportive of entrepreneurs. 

And that’s before whatever Rachel Reeves has planned in November.

There is widespread nervousness about this. More than four in ten (42%) owners say they are concerned about the impact of the Autumn Budget on their businesses. Just a quarter (25%) disagree. Again, there’s a danger that further increasing the costs of business in the 2025 Autumn Budget could drive firms abroad: 41% agree strongly or somewhat that they would consider moving their business overseas if taxes are increased. 

Crucially, though, our survey shows it’s not just the businesses that could move abroad, but their owners, too. Many business owners say they’d consider moving if they see hikes in their bills from capital gains tax, inheritance tax or new wealth taxes, for instance.   

Indeed, a key message from BOSS is that the professional and personal are closely intertwined for the country’s entrepreneurs: 44%, for instance, say they are considering cutting their business’s headcount to put aside funds to pay higher IHT bills resulting from changes to business property relief in the last Budget.  

The result is that, if a weakening economy persuades the Chancellor she cannot use the Budget to increase the burden on businesses, she cannot simply plug the gap by putting it on their wealthy owners instead. To secure the growth the UK’s finances so badly need, she must try to ensure that the UK remains an attractive home for both.