Small businesses can approach 2026 with confidence and ambition after Rachel Reeves' Budget

So it was positive to hear the Chancellor acknowledge their contribution as she opened her speech on Wednesday.

But how will business owners feel about these measures? Many may welcome the Government’s focus on reducing the cost of living and creating opportunities for growth, offering some relief after a prolonged challenging period.

Certainly some businesses will be affected by the minimum wage rise and many entrepreneurs by increased dividends tax. However, hopefully these measures will be outweighed by the predicted stabilisation of the economy.

Incentives like the 40% first year allowance for main rate assets are encouraging - albeit for those able to turn an early-stage profit. Permanent reductions in business rates for over 750,000 retail, hospitality, and leisure businesses will also be a significant boost for some.

Free apprenticeship training for under 25s for SMEs is another positive step (and we appreciated the Chancellor’s shout out for Small Business Britain’s work here!), alongside the Government’s review into how it can better back entrepreneurs.

Ultimately, the most effective way to help small firms is by creating a stable economic environment. While there’s no quick fix—and UK growth and productivity have faced persistent challenges—there are signs of improvement, especially for businesses reliant on consumer spending.

Indeed the number of small businesses has risen to 5.6 million for the first time in five years. Meanwhile, new data from Small Business Saturday—a campaign I lead, taking place on 6 December —shows the UK could spend over £23 billion this Christmas, with around £5.3 billion flowing to small businesses. That’s a 16% increase on last year’s festive spend and 19% higher than the seasonal spend predicted for 2024.

Overall, the outlook is more positive. While the Budget brings a mix of measures, small businesses have strong reasons to feel optimistic and approach 2026 with confidence and ambition.

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Michelle Ovens CBE is Founder of Small Business Britain.

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