British business owner hit by Budget costs

Mr Hall built indoor courts this year so the Padel club could continue operating throughout the winter.

The expansion was paid for entirely from his own pocket, without borrowing from a bank.

He said: “It’s my own money in this, not the bank’s. For me and for my family that’s a massive amount to put into one thing.”

Mr Hall now needs four permanent employees to operate the new courts.

Employer National Insurance remains at 15 per cent on earnings above £5,000, which he estimates will cost approximately £12,500 a year across the four workers.

That bill comes before accounting for their wages, workplace pensions or equipment.

Mr Hall said: “That’s twelve and a half grand to the taxman before any of the four have done a day’s work. Nobody mentions that bit when they talk about backing small business.”

His staffing costs will rise further when the National Living Wage increases to £13.21 an hour in April 2027.

Mr Hall planned the expansion using the current rate of £12.71 an hour. He estimates that the increase will add another £4,500 to his annual costs.

He said: “So that’s another four and a half grand a year I hadn’t budgeted for. I’m not arguing against paying people more, I’d pay them more anyway. But the courts are up. I can’t take them down again.”

The Budget did include possible support through changes to business rates.

Chancellor John Healey increased the small business rates relief threshold for leisure firms from £12,000 to £18,000.

However, Mr Hall does not yet know whether Sevenoaks Padel will qualify because the new building still needs to be valued.

He said: “People keep telling me I’ve done well out of the rates. I’ve just stuck a building on the site. Nobody can tell me what it’ll be valued at yet, so I honestly don’t know if I’m in or out.”

Energy represents another major expense for the business.

VAT was removed from household electricity, but the same support was not extended to his commercial energy bill.

Keeping the courts open throughout winter means relying heavily on lighting during the shorter days.

Mr Hall said: “In winter the lights go on at four. That’s the entire reason the courts are indoors. Electricity is my second biggest bill after wages and there wasn’t a word about it.”

The financial pressure also follows him home.

Mr Hall and his wife both work, have two children at a local secondary school and pay a mortgage.

Income tax thresholds will remain frozen until 2031, meaning more of any future pay increases could be taxed.

He said: “The bands haven’t shifted since 2021. So every rise either of us gets, we see less of it than the last one. Nobody stood up and announced that, but it’s what’s happening.”

Mr Hall could also face a higher tax bill if he eventually sells the business to recover the money he invested.

The Budget reduced the lifetime limit for Business Asset Disposal Relief from £1million to £500,000.

He said: “They’ve halved the one relief somebody like me might ever use, and brought in a new one that’s aimed at companies ten times my size.”

Despite the additional costs and uncertainty, Mr Hall still plans to recruit the four workers needed to run the new courts.

He said: “I’ll get them in. It’ll just take me longer than I thought it would back in March.”

His experience comes at a particularly difficult moment for small firms across the country. According to the Office for National Statistics, seven in ten businesses were worried about energy costs in early October.

A third reported that the price of goods and services they purchased had increased during September.

Energy was the most frequently cited reason firms gave for considering raising their own prices. Meanwhile, only 15 per cent of businesses expected their turnover to grow in November, while 17 per cent anticipated a decline.

Mr Hall, for his part, has already committed his money and built his courts. The sums have changed beneath him, but the business has to make them work regardless.