Nearly 400,000 SMEs Fear Closure Ahead of Spring Statement - London Business News | Londonlovesbusiness.com

"According to a survey of 1,000 SME owners across the UK, conducted by small business insurer Simply Business, the sector faces significant financial strain, underscoring the need for immediate policy action ahead of the Spring Statement. The research found that 82% of SME owners have experienced an increase in operating costs over the past 12 months. However, only 12% say they have raised their prices in line with those increases."

"SMEs employ around 16.9 million people, accounting for roughly 60% of private sector jobs. Recognising their vital role can motivate policymakers and stakeholders to feel a sense of responsibility for their continued support and stability. The research indicates that with approximately 5.6 million SMEs operating in the UK, their collective decision-making may be dampening visible inflationary pressures in the wider economy, underscoring their critical role."

"The survey comes at a time when the overall tax burden on UK businesses has reached 30.5%, the highest level this century, according to data from the Confederation of British Industry. It is projected to rise further by the end of 2026. However, analysts warn that prolonged margin compression may not be sustainable. If firms continue absorbing higher costs, they may be forced to reduce hiring, cut investment or, in some cases, face closure."

A survey of 1,000 UK SME owners reveals that 82% experienced increased operating costs over the past 12 months, yet only 12% raised prices accordingly. SMEs are absorbing higher expenses including energy bills, wages, National Insurance contributions, and supply chain costs rather than passing them to consumers. With 5.6 million SMEs employing 16.9 million people—60% of private sector jobs—their cost absorption dampens visible inflation but creates unsustainable margin compression. The UK business tax burden has reached 30.5%, the highest this century, projected to rise further by 2026. Prolonged margin compression threatens hiring, investment, and business viability.

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