Want growth, Chancellor? Back Britain's smallest businesses

The one Budget move that could unlock billions

If the new Chancellor wants a Budget that delivers growth instead of headlines, here's one idea: make life easier for Britain's smallest businesses. A simpler, lighter-touch tax and employment regime for firms with fewer than 20 employees could unlock billions of pounds of investment, create hundreds of thousands of jobs and turn today's side hustles into tomorrow's success stories.

Small and micro businesses already employ 16 million people and generate £1.6 trillion in turnover, yet many say they're drowning in rules designed for corporations with dedicated HR and finance teams. Give them room to hire, invest and grow, and they could become the biggest engine of economic growth Britain has.

One change could unleash £bns

What would you say to the new Chancellor, if you had the opportunity, before he writes his budget speech?

I’d say: come up with a proportionate light‑touch tax and employment regime for small and micro businesses and you’ll get growth, in bucket loads.

We keep asking the same question: Where will the next wave of economic growth come from? The answer is small and micro businesses.

The UK has around 5.6 million of them. They employ 16 million people and generate £1.6 trillion in turnover. They are the fastest creators of jobs and the biggest adopters of new tech. They’re suffocating under rules designed for big companies many times their size with the employed capacity and capability to comply with the huge number of rules.

Create a light‑touch employment law and tax code for firms with fewer than 20 employees.

Give small and micro businesses the space to grow. We know two thirds of people want to start side hustles and small businesses. Give them the support they need to do so and stop putting them off with an ever-increasing burden of rules and regulations which take up all their time in admin.  

Small firms would hire more

At the minute hiring your first employee triggers:

• employer NICs

• auto‑enrolment pensions

• complex HR compliance

• payroll obligations

• health & safety requirements

• employment law risks

• insurance increases

For a micro‑business, hiring is such a high‑risk, high‑cost gamble that many actively avoid it.

A light‑touch regime would:

• cut hiring costs

• reduce compliance fear

• make first‑time hiring normal

• unlock thousands of new jobs

Even a 5% increase in micro‑business hiring would add tens of thousands of jobs.

Productivity would rise

Most micro‑business owners spend 20–30 hours a month on admin, 10–15 hours on compliance and 5–10 hours on tax paperwork. That’s not about building a business.

That’s time not spent on:

• selling

• innovating

• training

• improving products

• expanding

Give them space, and productivity jumps.

More businesses would scale

The UK has a structural problem. 96% of businesses have fewer than 10 employees. Only 4% ever grow beyond that, because the minute you hire someone, the system becomes onerous. A simplified regime for firms with under 20 employees would:

• remove the cliff‑edge

• encourage scaling

• increase survival rates

• grow more mid‑sized firms (the real engines of productivity)

This is how you turn micro‑firms into small firms and small firms into growth firms.

Entrepreneurship would soar

QuickBooks data shows:

• 66% of adults are considering starting a business

• 30% plan to start one in the next 12 months

• 45% of side‑hustlers want to go full‑time

• 30% say lack of capital is the biggest barrier

• 60% say they’d start if guidance was easier to access

A light‑touch regime lowers the cost of getting started in business and the cost of growth, and would turn ambition into action.

The tax base would grow

Lower friction leads to more businesses hiring, expanding and surviving. More hiring means more tax paid through the PAYE system. More growth leads to more corporation tax. More stability means fewer insolvencies. This grows the tax base without raising tax rates.

The economy

Economists estimate that reducing hiring costs and admin for micro‑firms could:

• boost GDP by 1–2% over five years

• create 150,000–250,000 new jobs

• increase business survival rates by 10–15%

• raise productivity in key sectors (care, retail, trades, hospitality)

• increase investment by small firms by £10–15bn

This is the closest thing Britain has to a growth switch.

The balance

A light‑touch regime doesn’t mean stripping away rights. It means proportionate rules for the smallest employers.

Workers benefit because more firms hire, survive and grow and more jobs become available. From there career progression opens up and more local economies thrive.

A growing small‑business sector is the fastest way to make work pay. Higher demand for labour pushes up wages and more competition for staff leads to improvements in working conditions. More local employers give workers more choice and they win when small businesses grow.

Proportionality

If the Government made one change: a light‑touch employment and tax regime for firms with fewer than 20 employees, it could unleash the biggest wave of small‑business growth in a generation. I’m not talking about deregulation but about proportionate regulation.

Give small businesses space to grow and the UK economy will grow with them.