Following the UK government's late 2024 budget announcements, a significant 63% of SMEs now cite taxation as their primary business challenge, a rise from 48% in Q3. With business confidence at its lowest since 2022, many SMEs are struggling with rising costs, particularly due to the planned increase in National Insurance Contributions (NICs) from 13.8% to 15% starting April 2025. This has led to reduced profit margins, delayed investments, and intentions to raise prices, with only 32% of SMEs reporting increased domestic sales recently. However, despite these difficulties, there are actions SMEs can take to optimize tax efficiency and build resilience.
Despite these challenges, SMEs can take several steps to manage their tax burden and maintain financial resilience.
The rise in National Insurance Contributions (NICs) is set to significantly impact payroll costs and profitability for SMEs.
63% of SMEs cited taxation as their primary business challenge, reflecting growing concerns in the current economic climate.
Business confidence has slipped to its lowest level since 2022, prompting many SMEs to seek ways to mitigate rising costs.
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