Britain’s leading small business lobby has urged Chancellor John Healey to cut employment taxes and business rates in next month’s Budget, after he pledged to put growth and the cost of doing business at the heart of his economic plans.

The Federation of Small Businesses said the government should use its October 28 Budget to give smaller companies “breathing space”, including by significantly expanding relief from business rates.

The intervention followed Healey’s first Labour conference speech as Chancellor, in which he promised a “new age of industrialisation” and said his Budget would seek to help businesses grow and create jobs while maintaining fiscal discipline.

Tina McKenzie, national chair of the FSB, said Healey had been “right to put the cost of doing business at the centre” of his address but called for his rhetoric to be followed by concrete measures.

The organisation wants the government to increase the threshold for 100 per cent Small Business Rate Relief in England from a rateable value of £12,000 to £25,000, which it estimates would remove 250,000 businesses from paying rates.

Under the existing system, eligible businesses occupying a single property with a rateable value of £12,000 or less pay no business rates, while relief tapers between £12,001 and £15,000.

The FSB also called for lower employment taxes for small companies, the introduction of a Statutory Sick Pay rebate for smaller employers and an increase in the VAT registration threshold from £90,000 to £100,000. Businesses must currently register for VAT when taxable turnover exceeds £90,000 over a 12-month period.

McKenzie also urged the government to reverse recent increases in Business Asset Disposal Relief, which reduces capital gains tax when qualifying entrepreneurs sell their businesses. Its rate increased from 10 per cent to 14 per cent in April 2025 and to 18 per cent from April this year.

The group welcomed Healey’s focus on encouraging young people to start businesses but said ministers should also make it easier for smaller employers to recruit younger workers and expand apprenticeships.

It cautioned that government attempts to tackle “bogus self-employment” should not make legitimate self-employment more difficult, arguing that ministers needed to preserve flexible working arrangements while targeting exploitation.

Healey said fiscal discipline would be at the “core” of his first Budget, highlighting the constraints imposed by high government debt and borrowing costs.