Tax Rises and Fuel Costs Top Concerns as 89% of Scottish Small Businesses Fear Budget Announcements That Would Damage Growth Outlook

TAX RISES AND FUEL COSTS TOP CONCERNS AS 89% OF SCOTTISH SMALL BUSINESSES FEAR BUDGET ANNOUNCEMENTS THAT WOULD DAMAGE GROWTH OUTLOOK

Across Scotland, 89% of small businesses fear the possibility of specific Budget announcements next week that, in their view, would negatively impact the growth outlook and finance of their enterprises - with rises to taxation, business rates and fuel duty topping the list of concerns, according to new research from Novuna Business Finance.

The findings come at a time when Scottish small business outlook is in the balance - with only around one in four (25%) saying they are forecasting growth for the final three months of 2026, set against 57% predicting no change on the summer period and 16% of enterprises fearing they will either contract or struggle to survive the winter months.

A mood of caution is evident among Scottish small businesses when it comes to investing in their future business growth. Looking at building business strength for 2027, only 3% of Scottish small business owners say they are considering overseas expansion, while just 5% are planning to hire young people they can train and develop.

The new poll of a representative sample of 1,382 small business owners by Novuna Business Finance suggests the widespread fears over next week's Budget are a reflection of the fragile underlying confidence among small business owners, many of whom feel they would be unable to absorb any further increases in costs or taxes.

Key findings:

• Whilst nobody knows what will be announced in next week's Budget, the Novuna Business Finance poll gives an indication of the announcements that might be most damaging to small business confidence across Scotland. The possibility of further rises to income tax (55%), VAT (53%), employer's National Insurance (48%) and corporation tax (35%) were cited by Scottish small business owners as the Budget announcements that would most negatively impact the growth outlook and finances of their business. There was also concern over the impact of changing tax thresholds (29%), rising capital gains tax (21%) and the introduction of a wealth tax (16%).

• Changes to business rates were also a major worry for 37% of Scottish small businesses.

• Fuel costs remain a significant concern for many businesses. Across Scotland, 43% of small business owners said further taxes on diesel and petrol vehicles would negatively impact the growth outlook and finance of their business.

• Further increases to wages for lower-income earners (22%) and the possibility of new rules for employers on flexible working and employee rights (16%) were also seen to be a challenge for some Scottish enterprises, particularly at a time when many are working to protect the stability of their cash flow while keeping rising costs and red tape under control.

• Concern over pensions also featured, with 22% of Scottish small businesses expressing concern over any potential changes to salary sacrifice and pension arrangements in the 2026 Budget.

Jo Morris, Head of Insight at Novuna Business Finance comments: "The depth of concern over next week's Budget, and the sheer number of issues Scottish small businesses are worried about, reflects the challenging economic environment in which they currently operate. Following the successive economic shocks from Brexit, the Covid-19 pandemic and, more recently, the cost-of-living crisis, many small businesses have been forced to adapt to rising costs and unprecedented market uncertainty.

Given the importance of small businesses to Scotland's growth agenda, we need a Budget next week that supports the SME community. In recent months, there has been a focus on giving the public some breathing space from everyday financial pressures. The message from small businesses is they need support too. Positive announcements in next week's Budget could go a long way towards boosting small business confidence and strengthening their ability to power economic growth and create jobs across the UK."

Notes to editor

1. The growth outlook research was conducted by YouGov among a nationally representative sample of 1,382 small business owners in the final 2 weeks of September 2026. The survey was conducted online.
2. Two new Novuna Business Finance insight reports are available on request - looking back at how small businesses have coped with a 12-month period of change and also their views over time on expanding into various overseas markets.

About Novuna

Novuna is the trading name of Mitsubishi HC Capital UK PLC, one of the UK's leading financial services providers and the Official Finance Partner of British Athletics.

With more than 2,200 employees, £9.6bn of net earning assets and over 1.4 million customers, Novuna provides finance solutions across consumer finance, vehicle solutions, business finance, business cash flow and European vendor finance.

Novuna is part of Mitsubishi HC Capital Inc., one of the world's largest and most diversified financial groups, with assets exceeding 12 trillion yen (£57bn).

About Novuna Business Finance

Novuna Business Finance provides funding solutions to SMEs and large businesses across the UK, including asset finance, stocking finance, block discounting and sustainable project finance.

With an asset portfolio exceeding £1.9bn, we support sectors including transport, agriculture, construction and manufacturing with our Sustainable Project Finance team supporting major renewable energy and transport projects. In 2026 we were named Best Leasing and Asset Finance Provider at the Business Moneyfacts Awards.

Novuna Business Finance is a trading style of Mitsubishi HC Capital UK PLC, part of Mitsubishi HC Capital Inc., one of the world's largest and most diversified financial groups, with over 12 trillion yen (£57bn) of assets.

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