One in Eight UK SMEs Considering Moving Abroad: Time for Fairness and Reform

Rising Pressures on Small Businesses

A new report has revealed a worrying trend for the UK economy: one in eight small and medium-sized enterprises (SMEs) are considering relocating abroad due to rising tax burdens, red tape, and an uncertain business environment. For a nation built on entrepreneurship and innovation, this signals a serious call for change.

SMEs make up more than 99% of all UK businesses, employing millions and driving local economies. Yet, increasing operational costs, complex regulations, and inconsistent government policies have left many small business owners questioning their long-term future in Britain.

Tax and Red Tape Driving Businesses Away

The research, which surveyed thousands of SME owners across the country, found that higher corporation tax, complicated VAT processes, and costly compliance requirements are key factors pushing entrepreneurs to explore relocation options.

For many, nearby European countries offer simpler systems, lower tax rates, and clearer incentives for growth, advantages that are hard to ignore when profit margins are tight and energy bills remain high.

As one respondent put it, “We love running our business here, but we’re paying more every year for less support and less stability.”

The Real Risk: Losing Local Jobs and Innovation

If this trend continues, the UK could face a drain of talent, innovation, and opportunity. When small businesses leave, communities lose more than just employers, they lose investment, apprenticeships, and local spending that keep towns and cities alive.

Relocation isn’t just a financial decision; it’s a reflection of how policy choices impact everyday enterprise. Without urgent reform, the UK risks hollowing out the very backbone of its economy.

A Labour Perspective: Supporting SMEs, Building Stability

Labour has long argued that small businesses deserve fairness, not neglect. A fair tax system, prompt payments, and simpler regulation would help entrepreneurs focus on what they do best, creating jobs and driving innovation.

Under Labour’s approach, the focus is on stability, partnership, and productivity. That means cutting unnecessary bureaucracy, reforming business rates, and ensuring that government policy actively supports, not hinders, small business growth.

Looking Ahead

The relocation warning should not be ignored. It’s a sign that Britain’s business environment must become fairer, simpler, and more supportive of the real economy.

SMEs don’t want handouts; they want a level playing field, the opportunity to thrive without being crushed by rising costs and regulatory confusion. If the UK gets this right, small firms will stay, invest, and grow, ensuring prosperity for all, not just a privileged few.