
Simply Asset Finance has highlighted a split in the outlook and growth expectations of UK businesses as they prepare to adapt to the tax reforms introduced in the October budget.
Amid challenges posed by changes to national insurance (NI) and the minimum wage, a post-budget survey reveals that nearly 19% of businesses are now more inclined to invest, citing increased clarity on the government’s economic roadmap.
Additionally, 53% believe the newly announced business rate reductions for retail, hospitality, and leisure sectors will foster growth.
However, the asset finance provider said that a deeper analysis of the data indicates that smaller and micro businesses are expected to struggle more than medium-sized companies in the wake of Chancellor Reeves’ measures.
Simply Asset Finance CEO Mike Randall said: “The initiatives introduced in the recent budget are a silver lining for medium-sized businesses, with many of the measures evidently enabling them to pursue growth with renewed confidence providing the resources and stability needed for innovation and expansion. However, there is a pressing need to extend similar support to micro-businesses, as they continue to bear the brunt of unique challenges and uncertainties that threaten their ability to thrive.
“The reality is that there’s no ‘one-size fits all’ policy for SMEs – nor for their financing either. Policymakers, lenders, and industry leaders must work together to provide the necessary support to help businesses of all sizes thrive, creating a more balanced and resilient future for the UK economy.”
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By GlobalDataThe study indicates that medium-sized businesses are more optimistic about the impact of the announced policy changes on their 2025 prospects.
More than half (55%) view the business rate reduction as a growth enabler, and 48% see the fuel duty freeze as beneficial for expansion.
Infrastructure investments are highlighted as crucial growth drivers, with 46% of medium-sized businesses anticipating transport spending to spur growth and 43% identifying energy infrastructure upgrades as vital.
These resources position medium-sized companies to capitalise on the policies for sustained success in the coming year, the study showed.
In contrast, the sentiment among smaller businesses, particularly micro-businesses, is significantly more pessimistic.
According to the survey, 53% of micro-businesses see rising NI contributions as a barrier to growth.
This is in comparison to 46% of small businesses and 40% of medium-sized companies.
Additionally, 46% of micro-businesses are concerned about potential capital gains tax increases, a worry less evident among small (40%) and medium-sized (38%) businesses.
Micro-businesses also report the greatest uncertainty about their future, with 7% expressing doubt, significantly higher than the 2% of small businesses and 1% of medium-sized companies.
“For finance providers, it’s about flexibility and trust. Whether it’s by offering debt restructuring, showing pathways to investment, or exploring ways to help businesses manage through seasonal fluctuations, there are concrete steps that can be taken to support SMEs and help them grow despite the current uncertainties,” Randall added.
Last month, the British Business Bank expanded its funding support for Simply Asset Finance, providing an additional £175m ($222.7m).