UK extends import tariff suspensions as Bibby Financial Services calls for SME tax cuts

The UK government has announced an extension of import tariff suspensions covering more than 250 products, alongside regulatory reforms it estimates could save businesses almost £800m annually, but Bibby Financial Services has warned that the measures do not address the principal costs constraining small companies.

The package, unveiled on 23 October ahead of this week’s Budget, combines projected administrative savings of more than £600m a year with import tariff relief worth up to £155m annually.

The government says the tariff extensions are intended to reduce costs for businesses importing eligible goods and components, while changes to reporting requirements and official information requests should release time currently devoted to compliance.

Proposed reforms include simplifying corporate reporting, reducing duplicated information requests, easing public procurement requirements for smaller suppliers and pausing planned Companies House profit-and-loss filing requirements for April 2028.

The financial benefits are government estimates, not savings that businesses have already realised.

For importers, the tariff relief could reduce the cash required to acquire qualifying inventory. Lower landed costs can ease pressure on working capital, particularly for companies that must pay suppliers before recovering cash from customers.

However, financing conditions are determined by more than the tariff applied to an imported product. Employer taxes, property costs, wages and other operating expenses also affect the cash available to service borrowing and finance day-to-day activity.

Derek Ryan, CEO for North West Europe at Bibby Financial Services, welcomed the direction of the announcement but argued that more substantial intervention was necessary.

“Too many small business owners spend their Saturdays buried in paperwork, so anything that gives them that time back is welcome. But red tape isn’t the primary concern keeping SME owners awake at night. Costs are.”

He said extending tariff suspensions helped only at the margins and called on the Chancellor to cut corporation tax, reverse the increase in employer National Insurance contributions and extend business rates relief beyond retail, hospitality and leisure.

Those proposals are Bibby’s policy recommendations rather than measures announced by the government.

The distinction is important for SME lenders and invoice-finance providers. Regulatory savings may improve administrative efficiency, but borrowers’ liquidity and creditworthiness will continue to depend on actual operating margins, customer payment behaviour and access to affordable funding.

The Budget will therefore determine whether the government’s initial package is followed by broader measures capable of changing the financial outlook for smaller businesses.