Getting Down to Business: Attitudes of small businesses to popular, pragmatic pro-growth tax rises

With the Budget now less than a month away, the government is finalising it’s plan of action for filling the UK’s widening fiscal gap. The Chancellor is now openly considering tax reform as part of this package. The implications are significant; a decision to raise taxes risks triggering further political backlash, while inaction could dampen business confidence and hinder economic growth. Either outcome carries risks, underscoring the delicate balance the government must strike in the weeks ahead.

Our work in this project first looked at tax rises that could help plug the fiscal hole while aligning with the public’s values for the tax system. We then explored how the government could convey the importance of Budget tax rises to the public, and in turn help rebuild public trust in the state.

This third report now looks into a key facet of the public’s concern about tax rises: the response of Britain’s small-and medium-sizes businesses. These businesses are often deeply embedded in local communities and seen by the public as bearing a heavier brunt of tax rises. Their response matters to the public, and so should matter to policymakers.