Changes to taxation and inflationary pressures top concerns for businesses, whilst cyber attacks have hit 1 in 3, latest survey reveals

Tax increases, inflationary pressures and the threat of a cyber attack are key concerns facing family, privately owned and owner-managed businesses, according to new research from accountancy and business advisory firm Armstrong Watson.

Against a backdrop of political change and ongoing policy reform, the firm’s latest survey found businesses remain ambitious and focused on growth, but the majority are also increasingly concerned about the potential impact of tax increases (86%), inflationary pressures on costs (84%) and changes in government policy (82%) over the coming 12 months.

The survey also highlights how cyber security is now a mainstream business issue rather than a specialist IT concern, as almost a third of respondents report experiencing a cyber incident – with 23% of those occurring during the last three years - and 68% of respondents say they are concerned about the threat of a cyber attack.

The 2026 Family, Privately Owned and Owner-Managed Business Survey is Armstrong Watson’s sixth to date and one of the largest of its kind, with 840 businesses from across all sectors and regions sharing their views.

People-related challenges continue to feature prominently. More than seven in ten businesses (71%) report difficulty recruiting new talent, with 67% citing a lack of skilled or suitable candidates as their biggest recruitment challenge. Half of respondents also identify having the right people in the business as one of the biggest barriers to growth over the next three years.

Despite these challenges, businesses are taking proactive steps. Nearly six in ten (59%) have implemented measures to improve staff retention, while the use of salary sacrifice schemes has increased, with almost half (49%) now offering them, compared with 31% in 2025.

The findings also suggest businesses have not lost their appetite for growth, as 77% of respondents have a business plan with actionable goals.

Technology is an area where business behaviour is evolving rapidly. Almost half of respondents (46%) are now using AI within their business - a significant increase in the last 12 months, up from 17%. A further 23% are actively considering AI adoption.

Paul Dickson, Chief Executive and Managing Partner at Armstrong Watson, said: "It's perhaps unsurprising that concerns around taxation and government policy have risen to the top of the list of anticipated economic impacts for businesses over the coming 12 months. Businesses have experienced a period of significant political change, alongside continued reforms affecting employment costs and National Insurance contributions, succession and business taxation. Many owners are still assessing what these changes will mean for their businesses, investment plans and future growth. These are not short-term issues, which means businesses are having to think more strategically about how they operate and grow.

“What's particularly encouraging is that many businesses are not standing still. We have seen a significant increase in AI adoption, greater investment in staff retention initiatives, and a growing focus on succession planning. Despite the challenges, there remains a strong appetite to innovate, improve and prepare for the future. The key will be balancing ambition with resilience and ensuring businesses have the right advice and support around them as they navigate change.

“Thank you once again to all those who shared their views.”

The full Armstrong Watson Family, Privately Owned and Owner-Managed Business Survey Report is now available to download.