"The Federation of Small Businesses (FSB) has issued a stark warning ahead of what it describes as an unprecedented "cost crunch" set to hit small firms this April - urging the Government to act in next month's Spring Forecast or risk widespread closures and stalled growth. With less than two months before a wave of higher bills comes into force, the FSB says millions of small businesses and self-employed people face mounting financial pressure from rising labour costs, higher business rates, soaring energy standing charges, changes to Statutory Sick Pay and tax increases."
"According to new FSB research, more than a third (35%) of small businesses plan to close, downsize or contract over the next year. The outlook is even bleaker in key consumer-facing sectors: 41% in wholesale and retail 45% in accommodation and food services More firms now report falling revenues than rising ones. As a result, 35% expect to shrink over the coming year, compared with just 21% who anticipate growth."
"April will bring another rise in the National Living Wage (NLW), alongside increased employer National Insurance contributions (NICs). Although the Employment Allowance offsets part of the burden, the FSB says it no longer sufficiently cushions small employers from escalating NIC liabilities. A small business employing nine staff on the NLW has seen annual employment costs rise by £25,850 between January 2025 and April 2026 - roughly equivalent to hiring an additional employee."
The Federation of Small Businesses warns of an unprecedented cost crunch hitting small firms in April and urges government action in the Spring Forecast to avoid closures and stalled growth. Millions of small businesses and self-employed people face rising labour costs, higher business rates, soaring energy standing charges, Statutory Sick Pay changes, and tax increases. New research finds over a third (35%) plan to close, downsize or contract; 41% in wholesale and retail and 45% in accommodation and food services expect contraction. Employment costs are rising sharply due to National Living Wage increases and higher employer National Insurance contributions.
Read at London Business News | Londonlovesbusiness.com
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