UK businesses need the Chancellor to deliver confidence, certainty and the freedom to invest.

As the UK approaches the next Budget on 28 October, the debate will inevitably focus on the headline numbers: tax receipts, borrowing, spending and the wider fiscal position.  But for the thousands of owner-managed businesses that form the backbone of the UK economy, there is a more immediate question: Will this Budget give businesses the confidence to invest, recruit and grow?

Working with businesses with turnover of up to £50 million, I see first-hand the decisions owners and directors are making every day. These are fundamentally good businesses. They employ people, train apprentices, invest in their communities, buy from other UK businesses and generate the tax revenues that fund public services.  What many are lacking today is not ambition. It is confidence and certainty.

Business confidence remains fragile

The latest indicators underline the challenge.  The British Chambers of Commerce’s (BCC) Q2 2026 Quarterly Economic Survey, based on more than 4,700 businesses – 92% of them SMEs – found that just 44% expected their turnover to increase over the following 12 months, down from 49% in the previous quarter. Only 17% planned to increase investment in plant, machinery or equipment, the lowest level since the pandemic.

Investment postponed today can mean productivity lost tomorrow. A new machine that isn’t purchased, another employee who isn’t recruited, a second site that isn’t opened or new technology that isn’t adopted all have consequences beyond the individual company.

The Institute of Directors’ August 2026 survey paints a similarly cautious picture. Its economic confidence index improved in August, but confidence in directors’ own organisations slipped.  Investment intentions remained negative.  Perhaps more importantly, when business leaders were asked what was preventing growth and investment, 58% cited tax uncertainty, 55% general policy uncertainty and 40% uncertainty over demand.

Businesses can manage difficult conditions. What is much harder to manage is uncertainty.

The cost of standing still

The pressures facing businesses are real.  In July 2026 there were 1,931 registered company insolvencies in England and Wales, 5% higher than the previous month. Over the 12 months to the end of July, approximately one in every 199 companies entered insolvency.

While the insolvency rate remains well below that experienced during the 2008-09 recession, the Insolvency Service shows that insolvency volumes over the past two years have been at their highest levels since that period.  Behind every insolvency is more than a statistic. There are employees, suppliers, landlords, lenders and customers.

There is also a multiplier effect. When one otherwise viable business fails, its suppliers can be left with unpaid invoices, its employees lose income and confidence, and other businesses become more cautious about investment.  That is why supporting established SMEs should not simply be viewed as helping individual business owners. It is an important part of supporting the wider economy.

What businesses need from the Budget

From the conversations I have with business owners, I believe there are five areas where the Budget could make a meaningful difference.

1. Give businesses certainty

Businesses make decisions over several years, not several months. Hiring a senior employee, purchasing equipment, opening premises or acquiring another company requires confidence in future costs.  A business considering a £500k investment needs to understand not only today’s tax treatment, but what the environment is likely to look like over the next three to five years.

Where possible, businesses need a clear roadmap for taxation, employment costs, investment incentives and business rates.  Stability itself can become an economic stimulus because it allows businesses to make decisions rather than continually postponing them.

2. Reduce the cost of employing people

For many SMEs, people are their biggest investment and increasingly one of their biggest financial pressures.  The BCC’s Q2 survey found that 70% of businesses experiencing pressure to increase prices cited labour costs.  The Budget should therefore consider how the tax and employment system can encourage growing businesses to recruit rather than making the next employee increasingly expensive.

That does not necessarily require wholesale changes to the tax system. Targeted incentives for businesses creating new jobs, employing apprentices, investing in training or taking on their first employees could make a significant difference.  A growing economy ultimately needs growing employers.

3. Make investment the easiest decision a business can make

Only 17% of businesses surveyed by the BCC in Q2 planned to increase investment in plant, machinery and equipment. Meanwhile, 26% expected to reduce it.  That should concern anyone interested in the UK’s long-term economic performance.  The Budget should provide strong, simple and predictable incentives for businesses to invest in productive assets such as technology, automation, AI, and energy efficiency.

Just as importantly, those incentives need to be understandable and accessible to SMEs.  Too often, support schemes are sufficiently complicated that smaller businesses either do not know they exist or decide the administrative burden is not worth the potential benefit.  The principle should be straightforward: when a UK business is prepared to put it’s own capital at risk to improve productivity and create growth, the tax system should encourage that decision.

4. Improve cash flow and access to growth finance

Profit matters, but businesses generally fail because they run out of cash.  Late payment remains a serious issue. Government estimates suggest that late payments cost the UK economy £11 billion each year and are associated with 38 business closures every day.

Measures to improve payment practices are therefore welcome, but enforcement and implementation will be crucial.  Alongside tackling late payment, the Budget should encourage a broader and more competitive market for SME growth finance.  A profitable business should not have to abandon a viable investment simply because traditional lending criteria do not fit its circumstances.

Asset finance, invoice finance, working-capital facilities and other forms of growth capital all have a role to play. Government-backed schemes should focus particularly on addressing genuine gaps in the market and encouraging private capital into productive UK businesses.

5. Simplify the burden on SMEs

Management time is another cost businesses frequently discuss, but which isn’t visible on a profit and loss account.  For an SME, every additional reporting requirement, regulation or administrative process is ultimately dealt with by a relatively small management team.

The IoD’s August survey found 40% of respondents cited compliance with government regulation as having a negative impact on their organisation.  Good regulation is necessary. But good regulation should also be proportionate, understandable and efficient.  Every new requirement affecting SMEs should therefore pass a simple test: does the economic benefit justify the time and cost imposed on the business?  Reducing unnecessary complexity would release something extremely valuable – entrepreneurial time.

This is ultimately about confidence

There is no single Budget measure capable of transforming the UK economy overnight.  Nor should businesses expect the Government to remove every commercial risk. Running a business involves risk, competition and difficult decisions.

What policymakers can do is create an environment in which taking a sensible commercial risk is rewarded rather than discouraged.  The warning signs are already visible. In the BCC survey, inflation was a concern for 66% of businesses, taxation for 51%, and borrowing costs for 29%. Just 29% reported an increase in domestic sales during the previous three months.

The businesses I work with still want to grow. They want to recruit. They want to buy equipment, improve productivity, develop new products, acquire competitors, enter new markets and provide better futures for their employees.  The challenge is persuading them that now is the right time to do it.

That is why the most successful Budget for business may not be the one with the biggest headline giveaway.  It would be one that provides certainty over taxation, reduces barriers to employment, rewards productive investment, improves access to finance and cash flow, and simplifies the environment in which SMEs operate.

Give established UK businesses the confidence to invest £100k, employ two more people, purchase another machine, open another location or make the acquisition that they have been considering, and the cumulative impact across the country could be significant.  Economic growth is not produced in Westminster.  It happens when thousands of individual businesses decide that tomorrow looks sufficiently promising to invest today.

The Budget should give them every reason to make that decision.

Martin Bennison – Sales &Marketing Director

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