Entrepreneurs and family business owners are expressing grave concerns over the recent tax increases announced in the Budget, warning the government not to undermine their passion for growth.
Criticism focuses on measures they believe will have a significant impact on their businesses, including higher employer national insurance contributions, changes to inheritance tax on family assets and reduced capital gains tax credits.
Craig Bunting, co-founder of Bear Coffee, which employs 130 people across eight cafes in the Midlands, said the budget measures would have a “huge impact” on its £5.5 million turnover. He estimates an additional cost of £200,000 per year due to the increase in employer national insurance contributions from 13.8% to 15% from April next year. The threshold at which employers start paying this tax will also be reduced from £9,100 to £5,000, affecting more part-time workers.
Bunting expressed his frustration, saying, “I don’t want it to be taken advantage of just because I’m passionate enough to want to create something that has a purpose, employs people and creates good jobs.” He stressed that the unexpected changes, particularly the inclusion of lower-paid and part-time workers in national insurance contributions, were a “sly change” that could affect prices for customers and deter new business ventures.
Farmers have also protested in Westminster against making family farms liable to inheritance tax from April 2026. For decades, agricultural and commercial properties have been exempt to facilitate long-term ownership. Family business owners such as Stuart Paver, chairman of York-based shoe retailer Pavers, echoed these concerns. He argued that imposing inheritance taxes on family businesses contradicts government policy to encourage long-term investment and economic growth.
Paver illustrated the potential financial pressure on a family business making £1 million in profits, highlighting how inheritance tax liabilities could eat up years of dividends intended for reinvestment and shareholder returns. “It doesn’t make it wise to hold the shares and pass them on,” he said, suggesting this could lead to more sales to private equity firms with shorter-term goals.
Nicky Walker, managing director of Walker’s Shortbread, was more moderate, but acknowledged that the Budget has led to a reassessment of their three-year investment plan. “Although there was a fuss when the government came in that they weren’t going to raise taxes, you always think it’s going to happen. How else can a government raise money?” he noted.
Walker noted that while the tax increases come after challenging years for businesses, the certainty allows for better planning. However, he admitted that the measures could affect future investments and shareholder dividends, potentially leading to difficult conversations within family businesses.
The national living wage is also expected to rise by 6.7% to £12.21 in April, adding to financial pressure on businesses. Entrepreneurs are urging the government to reconsider these measures, warning they could stifle growth, discourage investment and negatively impact employment.