Many ​entrepreneurs and business leaders are calling for a reversal of some of the Chancellor’s most damaging policy updates​ - such as the increase in employers’ national insurance contributions (NICs)​ and Capital Gains Tax (CGT) changes – with hope that the Spring Forecast from the Office for Budget Responsibility (OBR) may force the government's hand in many areas. Whilst a complete reversal of newly introduced policies is unlikely at this stage, there’s certainly room – and good reason – for policies to be adapted.

SMEs: a driving force of job creation in the UK

The UK’s SME sector is the backbone of the economy, accounting for over 60% of private sector jobs. An increase to employers’ NICs from April 2025 is going to have a noticeable and negative impact on SMEs’ workforce plans – with many likely to reduce or freeze hiring, to reduce headcount and to reduce planned pay increases. This is despite the increased employment allowance, which lets eligible small businesses reduce their national insurance liabilities. More needs to be done to exempt SMEs from this planned increase in NICs to prevent job losses and sustain the UK's economic backbone.

Reducing barriers to scaling businesses

Entrepreneurs need long-term policy certainty to plan for growth and investment; policies that are considerate of the needs of growing businesses. The government must reduce barriers to scaling businesses, from simplifying regulation, to improving access to funding and making it more attractive for investors to invest in UK businesses.

Private equity and venture capital play a critical role in helping businesses scale, innovate and create job opportunities. There needs to be more tax incentives and support for equity investment to ensure entrepreneurs can access the right funding without building up excessive debt in the process. As part of this, the government should consider strengthening initiatives like the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs) to encourage more private investment into growing UK businesses – these can be done at zero cost to the taxpayer but needs political support and engagement with the VCT and EIS industry to deliver the changes in legislation.

Supporting entrepreneurial success

Entrepreneurs need a fair, simple and growth-focused tax system that rewards long-term investment and innovation – encouraging reinvestment and creating a strong startup ecosystem in the UK.

To achieve this, it’s firstly vital to maintain a competitive CGT regime that doesn’t penalise entrepreneurs’ success. Many entrepreneurs rely on the sale of their business to fund their next ventures, to provide for family and to finance their later years. Yet, with increased CGT rates, those who have worked hard to successfully build wealth are now facing higher taxes on their exits. This will present real difficulties for entrepreneurs who have carefully planned finances for life events – such as children's education, property investment, retirement, etc. – around their business lifecycle. Secondly, and similarly, competitive Business Asset Disposal Relief (or ‘Entrepreneurs’ Relief’) rates are crucial for not only their own financial stability, but also for encouraging founders to reinvest in new ventures.

Changes to both of these policies have immediately made growing, scaling and exiting a business in the UK far less desirable (and, for some, feasible) and will have a significant impact on how entrepreneurs plan to conduct their business in the future.

Backing British entrepreneurs

Support for SMEs and scaleups is critical for a balanced, thriving UK economy. The government needs to listen to the entrepreneur community and consider reversing, or at the very least revising, some of these more damaging policy changes. If entrepreneurs continue to be discouraged from starting and scaling businesses due to increasing tax burdens, investment and innovation will continue to suffer.

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