Warning over April cost crunch for small businesses

25 Feb 2026

A looming cost crunch this April that could push many small firms to breaking point, warns the Federation of Small Businesses (FSB).

The business group says that rising energy bills, business rates hikes, spiralling employment costs and changes to Statutory Sick Pay will all rise at a record pace, due to government decisions?.

It warns that this could lead to closures, stalled growth and fewer entrepreneurs willing to start up a business - unless urgent action is taken.

More than a third of small businesses are planning to close or contract over the coming year, according to the FSB's research.

Tina McKenzie, Policy Chair at the FSB, said: 'Small businesses are resilient - but they are not invincible. They simply cannot go on absorbing endless cost increases.

'The local greengrocer who has been serving the community for 60 years, the tech start up that wants to expand and the garage that employs dozens of staff including apprentices – they will all be feeling the pressure and have to make tough decisions off the back of it. 

'Many of these hardworking businesses have already been forced to increase prices, lay off staff, or cancel expansion plans.

'Next month's Spring Forecast is the last chance to take action before the new costs surge. The Chancellor must recognise the huge pressure that our 5.7 million small businesses and self-employed people are under and show she is willing to ease even a fraction of these cost pressures to help stem the tide of these rising costs.'