Entrepreneur Demands Government Action: ‘Listen to Struggling SMEs’

Peter Boolkah, an Essex-based business coach and owner of digital marketing agency Visibility SEO, is calling on the government to start listening to SMEs. He says escalating operational costs are burdening small and medium-sized enterprises (SMEs) across the UK. He wants policymakers to engage directly with local business owners to understand the challenges they face amid increasing tax obligations and economic pressures.

The UK is home to over 5.6 million SMEs, with 4.5 million operating as sole traders. These businesses are the backbone of the UK economy, yet many are now struggling to cope with the weight of escalating taxes alongside the constantly increasing energy and supply chain costs they face. Business owners are being forced to make tough decisions about whether to invest in growth or simply to keep their doors open. Recent policy changes have exacerbated these challenges. The increase in the rate of National Insurance for employers from 13.8% to 15%, coupled with a significant reduction in the threshold for when employers start paying the tax—from £9,100 to £5,000—has been a double blow to small businesses, dragging many into paying this tax for the first time and that comes into effect next week.

Peter Boolkah wants a more hands-on approach from government officials. “It is time for the small business minister, Gareth Thomas, to engage directly with small business owners to hear their concerns firsthand. Speaking to us directly is crucial for policymakers to grasp the real-world implications of their decisions on the SME sector.”

Adding to the concerns is the potential exodus of entrepreneurs from the UK. James Watt, founder of BrewDog, has warned that increasing capital gains tax could prompt entrepreneurs to leave the country, thereby reducing venture capital availability for small businesses and shrinking the private sector investment pool. This trend could further strain SMEs, which are already grappling with heightened tax burdens and operational costs.

Certain sectors are feeling the pinch more acutely. The hairdressing industry, for instance, is facing significant challenges as many stylists shift to self-employment through “rent-a-chair” salons. This model allows hairdressers to work independently using salon space, reducing VAT and national insurance obligations for business owners, leading to unfair competition against traditionally employed salons. Similarly, small food and beverage businesses, such as fish and chip shops and pub chains like Greene King, have hinted that they are grappling with rising business rates and wage costs, and this is affecting them.

Boolkah says policymakers must urgently reassess tax policies because as it stands they are currently stifling innovation and growth within this critical sector which is worth billions to the British economy. “I want a taxation system that provides more support to SMEs and encourages the retention of talent and investment within the country. Without pro-business policies that champion the interests of SMEs, the economy faces stagnation. My message is clear: the UK must find a balanced approach that ensures both businesses and the government can thrive in these challenging times. A fairer, more supportive tax framework is key to securing sustainable growth and future prosperity.”

As the economic landscape continues to evolve, the concerns raised by Peter Boolkah, his business coaching clients and others underscore the need for policymakers to speak directly with SME owners. Understanding their challenges and coming up with supportive policies are essential steps toward ensuring the growth of this crucial sector of the UK economy.