Shadow Chancellor tells Treasury: stop taxing Britain’s businesses

Small firms ‘squeezed dry’ as £25bn paperwork bill mounts

Shadow Chancellor tells Treasury: stop taxing Britain’s businesses

Small businesses aren't just paying tax – they're paying billions simply to work out how to comply with it. Shadow Chancellor Andrew Griffith has put Britain's small firms at the centre of his first major economic intervention, warning that they are being “squeezed dry” by tax, red tape and employment costs. With the Budget approaching, the argument is becoming difficult to ignore: if government wants growth, how much longer can it keep increasing the cost and complexity of running the businesses expected to deliver it?

SMALL BUSINESSES SQUEEZED DRY

Tax rises, red tape and compliance overload are hitting small firms harder than ever. The Shadow Chancellor says enough is enough.

Small and micro businesses have spent the years since the financial collapse in 2008, battling rising costs, falling demand and a tidal wave of new regulations, exacerbated by the pandemic, government policy and geopolitical uncertainty.  

Now the Shadow Chancellor, Andrew Griffith, has stepped into the ring, says small businesses are being squeezed from every direction, and the current Government’s policy is making it worse.

He is putting small firms at the centre of the political fight over tax, regulation and the upcoming Budget.

“Labour is squeezing small businesses dry.”

Mr Griffith argues that small firms are being hit by too many taxes and compliance obligations and too much red tape. Small and micro business owners agree, and they also call out business rates that punish high‑street operators and the employment rules that add cost without adding clarity. For micro‑businesses already drowning in admin, this is the reality.

Do not raise taxes again

With the Budget weeks away, Griffith says the government “can’t afford” to raise business taxes after two tax‑heavy budgets under the previous Chancellor.

This matters because small firms are very worried about higher employer NI and business rates, any new sector‑specific levies and more compliance costs.

The Shadow Chancellor is positioning himself as the voice arguing against further pressure on small firms.

“Tax compliance has become a tax in its own right.”

This is the line that many small businesses have been using for months. Mr Griffith is highlighting that:

• the average small business spends more than a working week every year on tax paperwork

• compliance costs small firms £25bn a year

• a corporation tax return now contains 985 boxes

• HMRC identifies 2,500 obligations across 27 areas of tax policy

This level of compliance admin and paperwork is crippling micro‑businesses with no finance department. Promises to cut the admin burden on smaller businesses by a quarter have yet to materialise.

A taskforce to strip out tax red tape

The Shadow Chancellor has appointed advisors to identify and remove unnecessary tax burdens on small firms and sole traders. This signals a move to simplification, fewer forms, fewer obligations, and lower admin costs. It’s what small and micro businesses have been screaming out for and if delivered, this would be one of the most meaningful reforms for small businesses in a decade and make a real difference in terms of time, effort and cash that could be channelled into investment for growth.

He is also urging the government to rule out new business taxes and has warned against:

• any new “exit tax” for those choosing to move on from their business

• any new business‑focused levies

• any further tax rises in the October Budget

For small businesses thinking about succession, selling up, or restructuring, this is important.

The engine of growth

Andrew Griffith cites warnings from leading economists, including Andy Haldane and Lord Jim O’Neill, who argue that raising taxes again on businesses would damage growth.

His message is that you can’t grow the economy by taxing the people who create the jobs.

Key messages

No more tax rises for small businesses

Strip out tax red tape

Simplify compliance

Reduce administrative burden

Avoid new business‑focused taxes

Protect small firms from rising costs

Whether small businesses agree with him or not, this intervention matters. It signals that the political battle over the Budget will centre on the cost stack that business organisations like Business111, the British Chambers of Commerce and others have said repeatedly is crushing small firms, and whether government will finally ease the pressure.

Small businesses need lower costs, simpler rules and a tax system they can navigate. They and the Shadow Chancellor are demanding exactly that. 

WHAT THE SHADOW CHANCELLOR HAS SAID — AND WHY SMALL & MICRO BUSINESSES SHOULD PAY ATTENTION

Across multiple statements this week, Shadow Chancellor Andrew Griffith has made small and micro businesses a central part of his economic message. His comments matter because they directly address the pressures you and other small firms are facing: tax burden, red tape, compliance costs, and the fear of further tax rises in the October Budget.

Here are the key points — all highly relevant to small and micro businesses.

🔥 1. “Labour are squeezing small businesses dry.”

Griffith argues that small firms are being hit by:

• too many taxes

• a complex tax system

• heavy employer red tape

• business rates raids

He says the current system is “working against” small businesses and that complying with tax rules has become “a tax in its own right”.

For small firms spending hours on paperwork, this is a direct acknowledgement of your lived reality.

🔥 2. He is warning the Chancellor not to raise taxes in the October Budget

Griffith says John Healey “cannot afford to raise taxes” after two tax‑raising budgets under Rachel Reeves.

This matters because small businesses fear:

• higher employer NI

• higher business rates

• new sector‑specific levies

• more compliance obligations

He is positioning himself as the voice arguing against further tax pressure.

🔥 3. He wants a crackdown on tax red tape — calling compliance a ‘hidden tax’

Griffith highlights that:

• the average small business spends more than a working week every year on tax paperwork

• tax compliance costs small firms £25bn a year

• a corporation tax return now contains 985 boxes

• HMRC identifies 2,500 obligations across 27 areas of tax policy

This is one of the most important points for micro‑businesses: he is explicitly targeting the administrative burden that drains time, money and mental bandwidth.

🔥 4. He has commissioned a taskforce to strip out tax compliance burdens

Griffith announced new advisors tasked with identifying and removing tax red tape that holds back small businesses and sole traders.

This signals a policy direction: simplification, fewer forms, fewer obligations, and lower admin costs.

🔥 5. He is positioning the Conservatives as the party “listening to business”

Griffith says:

“We need to cut taxes and make the tax system easier to navigate.” “Unlike Labour, the Conservatives are listening to business.”

Whether or not small businesses agree, this framing matters — it shows he sees small firms as a decisive economic and political constituency.

🔥 6. He is warning against new taxes such as an ‘exit tax’ or further business levies

He has urged Burnham and Healey to rule out:

• any new exit tax

• any new business‑focused taxes

• any further tax rises in the Budget

This is directly relevant to small businesses worried about succession, selling up, or restructuring.

🔥 7. He is linking tax rises to economic damage

Griffith cites warnings from:

• Andy Haldane (former Bank of England economist)

• Lord Jim O’Neill (former Goldman Sachs chief economist)

Both argue that raising taxes on businesses would damage the economy.

This reinforces his argument that small business taxation is not just a fairness issue — it’s a growth issue.

⭐ THE BOTTOM LINE FOR SMALL & MICRO BUSINESSES

The Shadow Chancellor’s key messages are:

✔ No more tax rises for small businesses

✔ Strip out tax red tape

✔ Simplify compliance

✔ Reduce the administrative burden

✔ Avoid new business‑focused taxes

✔ Protect small firms from further cost pressures

He is positioning himself as the political voice arguing that small businesses are over‑taxed, over‑regulated and drowning in paperwork — and that the next Budget must not make things worse.