🎄 All I Want for Christmas Is… a Small Business Budget, Please

Dear Chancellor Reeves,

This year, instead of asking Father Christmas for new stationery and a decent work–life balance, I’m writing to you.

As a small business owner, I’m proud to create jobs, train people, and support my community. But right now, it feels like we’re doing all of that despite the system, not because of it.

So here’s my Christmas Budget Wishlist, playful, yes, but also realistic, cost-conscious and firmly grounded in what small businesses and not-for-profits actually need.

🎁 1. Make it easier not harder to hire people

We want to employ, but it can cost 19%+ on top of salary in on-costs before a new team member even walks through the door.

Yes, the Employment Allowance increased, but last year’s shift in NI thresholds quietly clawed back the benefit for many.

Wish:

• A genuine reduction in employer NI for small businesses hiring non-director staff, perhaps for the first few employees or the first £x of salary.

• A simple “cashback to hire” scheme tied to new roles created and maintained.

This isn’t a hand-out. It’s an investment in jobs, skills and long-term tax revenue.

🎁 2. Let us support wellbeing for staff and leaders

Teams are feeling the cost-of-living pressure, and employers want to help, through therapy, coaching, physio, financial guidance or small morale-boosting gestures.

But beyond the tiny £50 trivial benefit, wellbeing support is tangled in red tape and benefit-in-kind rules.

Wish:

• A clear £500 tax-free wellbeing allowance for non-director staff, covering counselling, mental health support, coaching and similar.

• Simpler rules so supporting your team doesn’t require a tax specialist to avoid a P11D headache.

• A small, ringfenced director wellbeing allowance, acknowledging that founder burnout is real and resilient leaders create resilient workplaces.

This is preventative care, not a perk.

🎁 3. Real incentives to invest and grow

Entrepreneurs are still investing but mostly through sheer ambition rather than meaningful tax incentives.

Wish:

• Strengthened and simplified allowances that support investment in equipment, digital systems, automation, green upgrades, accessibility and staff development.

• A clear “small business investment allowance” sending one message: If you invest to grow, the tax system will back you.

If we want productivity and innovation, we must reward the people driving it.

🎁 4. Bring back meaningful enhanced reliefs to fuel growth

Enhanced reliefs (125%–150%) previously encouraged innovation — but the conditions were so restrictive and complex that many small businesses couldn’t access them.

Wish:

• Reintroduce modern, simplified 125%–150% enhanced reliefs that genuinely support small business growth.

• Make them broader and less restrictive, avoiding the complicated conditions that limited access in the past.

• Apply them to real-world growth drivers: equipment upgrades, software, training, accessibility improvements, sustainability, digital transformation and automation.

• Allow eligibility for spending from company funds or additional director reinvestment, with sensible safeguards.

Enhanced reliefs accelerate growth. Let’s make them accessible, not exclusive.

🎁 5. Help retail & hospitality keep our high streets alive

Retailers, cafés, pubs, restaurants and independent shops are the heartbeat of our communities but many are struggling to survive.

We want high streets with the right balance of vibrant independents bringing variety and personality, alongside the big chains that draw footfall and provide stability. Both matter. Both can support each other.

But independents simply can’t take their place when premises costs are so prohibitive.

Wish:

• Stronger, long-term business rates relief and smarter support on commercial premises.

• Make hiring easier and more affordable in these labour-intensive sectors.

If we want thriving town centres, we must stop pricing out the independents that make our high streets worth visiting.

🎁 6. Don’t drag micro-businesses into VAT

Lowering the VAT threshold would hit the smallest service providers hardest, the gardeners, window cleaners, hairdressers and countless others supporting everyday life.

They would have no choice but to raise prices, worsening the cost of living.

Wish:

• Protect, or even cautiously raise, the VAT threshold, so micro-businesses aren’t burdened with systems they’re not resourced to manage.

  
  

🎁 7. Open up government work to small and local businesses

A huge amount of public spending goes through a limited number of large suppliers. It may be administratively simple, but it drives up margins and shuts out local enterprises.

Wish:

• More contracts (or contract “lots”) reserved for SMEs, social enterprises and local suppliers.

• A procurement culture that prioritises value-for-money, local impact and lived experience not just scale and glossy documents.

Local suppliers deliver better value and stronger community outcomes. Let them lead more.

🎁 8. Raise revenue smartly not by taxing struggling small businesses

Most small businesses cannot absorb another tax increase. Many are already stretched to breaking point.

Wish:

• Explore a modest levy on higher-margin, larger groups to help fund small business support a “big business backing small business” approach.

• Smarter taxation on genuine luxury consumption, not the everyday essentials of running a business or home.

• Bring in independent specialists (without the sky-high fees) to identify waste before raising taxes.

• Stop channeling huge amounts of public money into initiatives businesses neither asked for nor benefit from. Digital ID schemes such as the Companies House overhaul and projects like Making Tax Digital, delayed repeatedly because the sector hasn’t been ready, are costly and unwanted. Redirect those funds to measures that genuinely support business growth.

Growth won’t come from squeezing the already-squeezed.

🎁 9. Support not-for-profits with a modernised funding and tax approach

The funding landscape for not-for-profits has changed dramatically. Grants are harder to secure, and many organisations now rely more on traded income or major donors to stay afloat.

But the tax framework hasn’t kept pace.

Wish:

• Introduce a boosted Gift Aid uplift, so not-for-profits receive more from each donation without raising income tax rates.

• Provide stronger tax incentives for donors including higher-rate taxpayers and high-net-worth individuals who are essential partners in sustaining community services.

• Incentivise businesses that demonstrate genuine social responsibility, contributing profit, skills or time to community impact.

• Create a simplified tax framework for not-for-profits and socially responsible enterprises that:

  • Limits tax when surpluses are reinvested in mission

  • Reduces complexity around trading income

  • Clearly distinguishes between extraction and reinvestment

  • Stops penalising not-for-profits that need to trade to remain sustainable

Not-for-profits fill the gaps public systems cannot reach. Supporting them is economic strategy, not philanthropy.

If we get even one or two of these measures under the tree this year, it would send a powerful message:

That the UK is serious about backing the people who create jobs, opportunity, social value and community strength at ground level.

Over to you, Chancellor.

👉 Small business owners & not-for-profit leaders what would you add to your Christmas list?