The latest FSB Small Business Index (SBI) for Scotland in Q4 2025 shows that overall small business confidence continues to bump along the bottom, sitting at -58.6 — one of the lowest levels recorded since the pandemic. 

FSB is calling for urgent action in today’s draft Scottish Budget to protect small firms from further significant tax rises as a result of the latest business rates draft revaluation.

Three in five Scottish small businesses (58.8%) now identify tax as a key cause of their rising costs, far more than point to the second biggest factor, increased staffing costs (45.1%).

In addition, more than a third of Scottish small business owners (35.1%) expect their operations to shrink in the next 12 months, an increase on the previous quarter (29.1%) and significantly higher than the number predicting growth (20.2%).

Guy Hinks, the FSB’s Scotland chair, said: “The last thing Scotland’s small businesses need is to be hit with eye-wateringly increased rates bills in April.

“The costs crisis they are facing is already dragging down firms across the country, putting livelihoods and investment plans at risk.

“Fortunately, there are some straightforward steps which the Scottish Government can take in today’s Budget to protect small firms from this potential catastrophe.

“That means reducing the multiplier used to calculate final rates bills, restoring reliefs through raising Small Business Bonus Scheme thresholds to previous levels, and introducing specific lower poundage rates for the hard-hit retail, hospitality and leisure sectors.”

The Q4 SBI survey questioned 1,186 small business owners and self-employed individuals, including 111 in Scotland between 9 and 23 December 2025.

Micro and small businesses comprise almost all enterprises in Scotland (98%), employ more than 940,000 people and turnover £98bn annually.