As the Autumn Budget approaches, tax incentives and improved access to finance have emerged as key demands from UK SMEs, according to new research from Bibby Financial Services (BFS).
The latest SME Confidence Tracker Index reveals that despite a post-election rebound in business optimism, small business leaders are calling on the government to address critical financial barriers to unlock growth.
The survey of 1,000 SMEs found that 68% expect sales to increase over the next six months, up 7% since March 2024. With inflation stabilising and interest rates low, 63% of SME leaders now feel more confident about making capital investments, while 52% are more likely to seek to make significant investments after the general election.
However, concerns remain about the possibility of tax increases in the next budget, with 87% of respondents calling for better tax incentives and 81% calling for access to low-interest financing to support expansion and job creation.
Derek Ryan, managing director of BFS UK, urged the government to deliver on its commitment to small businesses, saying: “SMEs are finally feeling confident enough to invest, but the Prime Minister’s warning of a ‘painful’ Budget risks undermining that commitment. Supporting SMEs must remain central to the government’s economic growth plan.”
Access to finance remains a major challenge, with 49% of SMEs describing the financial landscape as complex and 80% seeking better educational resources to navigate finance options. While trade finance approvals have increased, many SMEs still find the process daunting, with only 18% taking advantage of the bank referral scheme.
Labour’s proposals to improve SME finance through reforms to the Commercial Bank of England and the Bank Referral Scheme are seen as promising, but experts such as Sandeep Dhillon, chief executive of SME marketplace Talmex, stress the need for immediate clarity on tax policies and financial support, particularly for the tech sector, where investment has fallen.