The UK government has promised businesses annual savings of almost £800m by cutting paperwork and extending tariff suspensions, in a package designed to ease pressure on companies ahead of Chancellor John Healey’s first Budget.

Prime Minister Andy Burnham said the measures would give businesses “breathing space to grow” as firms confront higher operating costs, weaker demand and uncertainty over the economic outlook.

Red tape and tariffs targeted

The package includes simpler compliance guidance for smaller companies, which the government estimates will save £290m a year. Ministers will also extend the suspension of import tariffs on 250 products used by businesses, worth a further £155m.

Additional measures will reduce duplicate reporting requirements for asset managers, cutting estimated costs by £105m, while changes affecting residential property transactions are expected to remove a further £116m in costs.

The government said the measures were intended to support investment and growth without requiring a broad reduction in regulatory standards. The announcement comes as businesses continue to report pressure from transport, energy, packaging and employment costs.

Businesses face rising cost pressures

The intervention follows a sharp acceleration in UK shop-price inflation. The British Retail Consortium reported that annual shop-price growth reached 2.1% in October, up from 1.4% in September and the fastest increase since February 2024.

Food-price inflation rose to 2.9%, while non-food inflation increased to 1.7%. Helen Dickinson, the BRC’s chief executive, warned that retailers were increasingly unable to absorb higher costs.

Consumer sentiment has also weakened. GfK’s confidence index fell 11 points to minus 24 in October, its lowest level since April, adding to concerns about household spending and the outlook for retailers.

Limited relief for the wider economy

Business groups are likely to welcome the government’s attempt to reduce administrative costs, particularly for smaller companies and exporters. However, the savings will not remove the broader pressures created by weak confidence, elevated input costs and uncertainty around future tax and regulatory policy.

The government’s announcement places particular emphasis on practical cost reductions rather than a major change in economic strategy. Its impact will depend on how quickly the simplified guidance and tariff extensions are implemented, and whether companies pass savings through into prices, wages or investment.

For ministers, the measures offer an early test of their claim that reducing friction for business can support growth while public finances remain constrained. For companies, they provide targeted relief—but not a resolution to the wider cost squeeze.