Autumn Budget 2025: Employment Hero warns tax hikes could push firms to cut jobs

Employment Hero has urged the Government not to increase employment costs in the Autumn Budget, warning that higher taxes such as employer NICs could risk job growth and increase pressure on prices.

The call comes as new survey data revealed widespread concern among small business leaders.

According to Employment Hero’s research, 86% of businesses were worried about what the Budget will mean for them, while 59% of owners said they do not believe small firms are taken into account when Budget decisions are made.

Asked how they would respond if the cost of employment increased, half of business leaders (49%) said they would consider raising prices.

A third (33%) said they would delay hiring, and almost a quarter (24%) would consider redundancies.

The findings pointed to potential implications for the labour market and consumer prices if employment-related taxes are raised.

Employment Hero’s real-time platform data indicated that the labour market has been recovering. Employment rose by 2.3% in October compared with September and is up 1.9% year-on-year, suggesting resilience among small and medium-sized enterprises (SMEs) despite ongoing uncertainty.

However, the impact of the October 2024 Budget remained significant for many organisations.

Employment Hero reported that 72% of leaders saud last year’s announcement affected their business, with platform data showing employment dipped by -0.9% in December 2024 before beginning a slow recovery in February.

While the latest figures showed continued improvement, year-on-year growth remained below levels seen before the 2025 Budget reforms came into effect.

Kevin Fitzgerald, UK managing director at Employment Hero, said: “When you tax small businesses, you tax everyone.

“It creates a domino effect – higher costs lead to higher prices, fewer jobs and less money in people’s pockets.

“Small businesses employ the majority of our workforce. Make life harder for them, and you make it harder for Britain to grow.”

He added: “The Autumn Budget is an opportunity to learn from past mistakes. Our data shows the real impact last year’s employment taxes had on small businesses.

“Despite these challenges, they remain resilient as ever – with October tracking a 2.3% growth in employment.

“If the Government wants to continue this job growth and control inflation, they can’t keep penalising the very businesses that power our economy.

“We simply can’t afford a repeat performance. The way to get Britain working again is to back small businesses, not burden them.”