The Federation of Small Businesses (FSB) Wales has welcomed the stability in Welsh Government’s Draft Budget for 2026/27. It includes an uplift in overall funding and leaves £380 million unallocated for cross-party negotiations. However, FSB Wales warns that the budget overlooks the severe cost pressures on Wales’s 200,000+ small businesses.
A major concern is the lack of detail on non-domestic rates (NDR). The draft budget says NDR policy will be decided after the UK Autumn Budget on 26 November and assumes revenues will stay the same “in real terms”. This leaves important questions unanswered, such as how will the multiplier be set and will relief be shared fairly across businesses of different sizes?
FSB Wales notes the draft budget keeps current levels of support in several areas that matter to small businesses. Business Wales gets £22 million to carry on its support for SMEs and entrepreneurs, while £9.7 million supports the Business Finance Funds for micro-businesses, SMEs, and social enterprises. Investment in the planning system stays at £5.1 million after last year’s rise, with the focus now on a 50% increase in application fees to fund local services. An extra £21.5 million through Medr will boost higher and further education, including skills and apprenticeships that small employers rely on.
Creative Wales will get £8.4 million in funding, including a new £1.4 million to cover non-domestic rates bills for studios. This brings Wales in line with support elsewhere in the UK and is good news for the creative sector.
The budget also gives £0.29 million in day-to-day funding and £2.77 million in capital to the Welsh Revenue Authority. Part of this is to set up a national register for visitor accommodation ahead of possible local visitor levies from April 2027 (registration starts October 2026).
Speaking in response to the draft budget, Joshua Miles, Head of FSB Wales, said:
“This draft budget provides a stable platform and the £380 million in unallocated funding offers genuine potential for ambition in the final budget to helps SMEs across Wales. Welsh Government have indicated that the current proposals on business rates for retail, hospitality and leisure relief will be removed, which would be a 40% tax increase for many businesses. At a time when business costs are rising, it’s crucial that cross-party negotiations lead to this being protected, either as a relief or as part of a new expanded retail, hospitality and leisure multiplier. We urge Ministers and Members of the Senedd to use the headroom this unallocated funding creates for targeted initiatives to help small businesses.
“FSB Wales calls for cross-party collaboration to deliver a final budget in January that keeps Welsh small businesses trading, hiring, growing and thriving for the benefits of all communities across Wales. Small businesses are the backbone of the Welsh economy”
