Clarke Bell has warned that the 2025 Autumn Budget may contribute to increased closure rates among UK SMEs, following survey results showing widespread anxiety among accountants about the policy direction.
According to the research, 90% of accountants believe the forthcoming Budget could worsen the risk of SME closures next year. When assessing the expected overall effect of the Autumn Budget 2025, 66.7% indicated a somewhat negative outlook, while 23.3% foresee a very negative one.
The survey was undertaken in October 2025 with feedback from 30 accountants who provide advisory services to small and medium-sized enterprises. Respondents cited tax rises, reductions in business support, and climbing labour costs as their main concerns.
John Bell, Senior Partner at Clarke Bell, said: “SMEs are already under significant financial strain, and this Budget may be the final straw for many. With rising tax burdens, inflationary pressures and little short-term support on offer, we expect to see more business owners deciding to close or restructure in the months ahead.”
When asked about future trends, over 90% of accountants said they expect company insolvencies to rise over the next 12 months. This comes amid existing pressures, with 73.3% reporting an increase in financially distressed SME clients compared to the same time last year. Rising operational costs, tighter cash flow, and economic uncertainty are all contributing to the strain facing many small businesses.
Respondents were also asked which sectors they believe are currently most vulnerable to financial distress. Multiple selections were allowed, with the top sectors identified as hospitality (93.3%), retail (90%) and construction (40%).
These concerns reflect a broader economic trend of sustained pressure on businesses across consumer-facing and labour-intensive sectors.
The survey also revealed a shift in business owner behaviour in 2025. Also, 50% of accountants reported more SME directors planning to exit, either due to retirement or financial pressure.
When asked which exit strategies they are seeing more frequently, respondents could select multiple outcomes. The most common answers were voluntary closure/strike-off (63.3%), business sale/merger (53.3%), Members’ Voluntary Liquidation (MVL) (33.3%) and Creditors’ Voluntary Liquidation (CVL) (26.7%).
John Bell added: “For some directors, retirement or a change in focus is driving their decision to close. But for many others, the move is being forced by cashflow issues and an unsustainable cost base.”
As the business community awaits the Chancellor’s Autumn Statement, many fear that further tax rises or cuts to reliefs could accelerate financial distress across the SME sector.
Clarke Bell is encouraging accountants and business owners to prepare for potential changes, particularly those considering solvent exits via MVL or needing to address unmanageable debt through CVL.
