Once again, this Labour government is showing just how little it understands small and micro businesses. While ministers talk endlessly about “working people” and “fairness”, their actions tell a very different story. Costs are rising relentlessly, regulation is tightening, and now the government is moving to strip away what little self-employed people can legitimately offset against tax.
The proposed removal of long-standing wear and tear allowances under Making Tax Digital is a perfect example. It is being sold as a technical adjustment, but for thousands of self-employed people who work from home it is anything but. It is another quiet squeeze, another way of extracting more money from those who have the least capacity to absorb it.
Childminders illustrate the problem starkly. Their homes are not just places of residence; they are full-time workplaces. Walls are repainted more frequently, floors wear out faster, carpets need deep cleaning, furniture breaks and must be replaced, and rooms are constantly adapted to meet safety and regulatory requirements. This wear does not happen once a year, it happens every single day. The allowance exists because these are genuine business costs, not creative accounting.
Yet childminders are only the most visible group affected. Across the country, tutors, therapists, carers, consultants, designers and countless other sole traders now work from home. Many were encouraged to do so by government policy in the first place. Homes used for business purposes incur higher utility bills, greater maintenance costs and accelerated wear. Removing recognition of those costs reveals a government that simply does not understand how small businesses actually function.
The frustration felt by the self-employed is growing. One childminder recently wrote to her MP asking for help, explaining clearly how the removal of this allowance would threaten the sustainability of her business. The response she received asked what she wanted the MP’s office to do about it. That reply will sound painfully familiar to many sole traders: dismissed, brushed aside, and left feeling that Westminster neither listens nor cares.
This comes at a time when Labour policies are already driving up costs across the board. National Insurance changes, rising energy bills, inflationary pressures, and ever-increasing compliance demands are all hitting small businesses hardest. Large corporations can spread these costs or pass them on. Micro-businesses cannot. They absorb them personally, often at the expense of their own income, savings, or family security.
And now, just as costs keep climbing, the government is reducing what can be offset against tax. In effect, it is taxing people on money they have never truly had, while ignoring the real costs of keeping a business afloat. This is not fairness; it is fiscal laziness dressed up as reform.
Ministers continue to talk about entrepreneurship, flexibility, and growth. But their policies suggest a worldview shaped entirely by big organisations, not kitchen-table businesses and spare-room enterprises. Small businesses are not faceless economic units. They are people taking risks, providing local services, employing others, and supporting their communities.
This is not opposition to digital tax systems or sensible modernisation. It is a call for realism. If you increase costs at every turn and then remove legitimate deductions, you are not supporting small business, you are squeezing it.
For childminders and the wider army of home-based businesses, this change is a warning sign. It reinforces the growing belief that this Labour government simply does not understand small business, and that unless it starts listening, many of those businesses will be pushed out altogether, to the detriment of local communities and the wider economy.
