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Cost Stack Calculator

Cost Stack Calculator

How much have domestic policy costs risen for your business?

Since 2016, domestic policy-driven costs have added significant pressure to UK businesses. Our modelling shows that for a typical SME, these costs have risen by more than 70%, with around a quarter of that increase coming since the Autumn 2024 Budget.
 
Use the calculator to see how your business compares and submit your figures anonymously to help demonstrate the true scale of cost pressures facing British businesses.
UK Business Cost Stack Calculator — BCC 2026

UK Business Cost Stack Calculator

How much have domestic policy-driven costs risen for SMEs? · 2016 → 2024 → 2026

How to use this calculator. Enter your business's current (2026) figures. The calculator works out how much your domestic policy-driven costs have risen since 2016, using each year's official rates. Some cost categories are not user-configurable and are derived from survey evidence and official data. The dashboard assumes no behavioural responses (e.g. operational adjustments) by firms to changing costs. It is intended to illustrate plausible domestic policy-driven cost increases under a configurable set of assumptions, rather than to estimate the realised costs of any individual business over time.

⚙️ Your Business Inputs

Your workforce
Number of employees on a fixed annual salary.
The approx. average annual salary of your salaried staff now. Default is the UK median full-time salary (ONS ASHE, ~£39,000). Earlier years are estimated from official earnings data (ONS AWE).
Workers paid by the hour at the National Living Wage (set their weekly hours to the right).
The approx. average weekly hours for each minimum-wage worker. Default is the UK all-employee average (ONS, ~32 hrs/week). We assume a 52-week year.
Turnover & operations
Your current yearly revenue. We adjust it back to 2016 and 2024 for inflation to compare fairly.
A firm with 10–15 staff typically uses 15,000–30,000 kWh; a 50-person firm 30,000–50,000 kWh — but this varies enormously by sector (a manufacturer or hospitality site uses far more than an office). Check a recent bill for your figure.
The size of any loan or overdraft facility you hold.

📤 Share your figures to help make the case to Government

The BCC is building an evidence base on the real domestic policy-driven cost increases facing UK businesses. Enter your email and consent below, then press submit. We may contact you for follow-up information or to update you on this project. Your figures are anonymised in any published analysis, and we can present the aggregate picture to the UK Government.

Domestic Policy-Driven Cost Stack Composition

Cost Driver / Policy Area2016/172024/252026/27 Δ 16→24Δ 24→26Δ 16→26

📋 Policy Rates & Sources

NLW rates: £7.20 (2016), £11.44 (2024), £12.71 (2026) — GOV.UK / Low Pay Commission

NLW — age-weighted effective rate: The NLW top rate applied only to workers aged 25+ in 2016 (21–24: £6.70; 18–20: £5.30), and to 21+ from 2024. The model applies each year's age-specific statutory rates to an illustrative PT workforce (~80% 25+, ~15% 21–24, ~5% 18–20 in 2016), giving an effective rate below the headline NLW — largest in 2016 (£7.03 vs £7.20). Follows NIESR's recommendation.

Employer NIC: 13.8% / £8,112 ST (2016); 13.8% / £9,100 ST (2024); 15% / £5,000 ST (2026) — HMRC

Employment Allowance: £3k (2016), £5k (2024), £10.5k (2026) — HMRC (applied within the NIC calculation)

Auto-enrolment pension: 1% (2016), 3% (2024/2026) on QE band — TPR

Business rates multiplier (standard): 49.7p (2016), 54.6p (2024), 48.0p (2026) — GOV.UK / VOA

Energy — policy element only (p/kWh): This model counts only the government policy component of the electricity bill, not the wholesale price. It combines the Renewables Obligation (1.56p / 3.18p / 3.50p — Ofgem RO buy-out × obligation), Contracts for Difference (0.0p / 0.80p / 1.06p — LCCC interim levy rate) and the Climate Change Levy (0.559p / 0.775p / 0.801p — HMRC), giving ~2.12p / ~4.75p / ~5.36p per kWh. Feed-in Tariffs and the Capacity Market are excluded (conservative). Some energy-intensive and smaller users hold partial exemptions — see limitations.

SME loan rates: ~3.5% (2016), ~8% (2024), ~7.5% (2026) — BoE / UK Finance. Applied as a flat rate; larger facilities typically attract lower rates.

IPT: 10% (2016), 12% (2024/2026) — HMRC

Corporation Tax: 20% (2016), 25% (2024/2026) — excluded (a tax on profit, not a standing cost of operating)

Salaried wages: indexed to ONS AWE KAB9 (×0.654 for 2016, ×0.913 for 2024)

Rateable value scaling factor: 0.012 (2016), 0.014 (2024), 0.0156 (2026). A modelled proxy for the ratio of rateable value to turnover for a mid-sized premises, calibrated to the VOA revaluation cycles (2010, 2017, 2023). An estimate, not a statutory figure.

Turnover indexing (GDP deflator): index 1.000 (2016), 1.303 (2024), 1.369 (2026) — ONS / HMT (IHYS). You enter current (2026) turnover; the calculator deflates it back to earlier years so costs and revenue are compared in the same nominal space. It affects only the cost-as-%-of-revenue display and business rates, not the underlying cost increases. Follows NIESR's recommendation.

HR/legal, data, cyber, SaaS: survey-based estimates scaled per head — BCC / FSB / CIPD

⚠️ Known Limitations & Methodology Notes

1. Wage growth is partially market-driven. The NLW floor is pure policy. Salaried AWE growth is macroeconomic. Both are included, but not all wage growth is attributable to government intervention.
2. No counterfactual. The model shows absolute cost levels at three points in time. It does not estimate what costs would have been in the absence of these policies.
3. Energy: policy element only. Unlike a full energy bill, this model counts only the government policy component of electricity (Renewables Obligation + Contracts for Difference + Climate Change Levy). The wholesale price — driven by global gas markets — is excluded, because it is not a domestic policy cost. This makes energy a genuine hard-policy line rather than market noise. Gas policy costs are negligible (almost all levies fall on electricity) and are excluded.
4. Energy exemptions. Some energy-intensive industries and certain smaller users hold partial exemptions or compensation for RO/CfD costs, and CCL has reduced rates under Climate Change Agreements. The model applies standard rates, so it may overstate the policy energy cost for exempt firms and understate it for others. Energy is ~0.1% of the stack, so this has minimal effect on the total.
5. HR/legal/cyber/SaaS are survey-based estimates. Per-head costs derived from industry surveys (CIPD, FSB, Gartner). Could vary ±30% by sector and firm size.
6. NLW cascade effect. Higher NLW → higher NIC on those workers → higher pension contributions. Each line is calculated independently, but the compounding should be noted.
7. Excludes policy offsets. Full expensing, R&D tax credits, Small Business Rate Relief and freeport reliefs are NOT in the model. (The Employment Allowance is included, within the employer NIC calculation.)
8. No sector identity. The hypothetical firm blends characteristics (NLW staff suggests hospitality/retail; salaried staff suggests professional services). Cyber, energy, insurance and the PT/FT split are particularly sector-specific.
9. Domestic policy costs only — direct Brexit costs excluded. The model excludes direct costs associated with Brexit, including customs declarations, rules-of-origin compliance, SPS checks, VAT on imports, and lost EU market access. Some broader compliance categories may nevertheless contain indirect Brexit-related effects that cannot readily be separated from other developments. Other excluded items: Corporation Tax (profit-dependent), Capital Gains Tax (a tax on the owner when selling an asset, not a business operating cost), Apprenticeship Levy (below the £3m payroll threshold), SSP/SMP/SPP, and rent/materials/logistics inflation.
10. Turnover indexing (NIESR methodology). You enter current turnover; the calculator deflates it back to earlier years using the GDP deflator (IHYS) so cost growth is compared against a like-for-like revenue baseline. The turnover figure is presentational only; the domestic policy-driven cost increases do not depend on it.
11. Business behaviour held constant. The model assumes no operational or behavioural changes over time. In practice, businesses respond to rising costs by raising prices, reducing staffing, postponing investment, improving productivity, or restructuring. BCC research has consistently found firms have delayed investment and growth as a result of cost pressures such as employer NICs and business rates.
12. Financing. The SME loan rate is applied as a flat percentage of the facility, which is user-configurable but not automatically indexed to turnover. Larger facilities typically attract lower rates. Financing cost is indicative rather than precise. The BoE base rate is monetary policy, so financing is retained as a government-influenced cost but classified market-influenced.
13. Insurance classified as market-influenced. Following NIESR's recommendation, Employer Liability insurance is treated as market-influenced: the obligation to hold cover is statutory, but the premium is set by the insurance market. This affects only the hard/market split, not the total.
Model: British Chambers of Commerce, 2026 — Framework methodology peer-reviewed by NIESR
Tracks domestic policy-driven cost increases only. All calculations from first principles using verified HMRC, ONS, BoE, Ofgem and GOV.UK rates. Figures are illustrative — individual business costs will vary.
Energy counts only the policy element of the electricity bill (RO + CfD + CCL), not the wholesale price. Financing and insurance are market-influenced.
You enter current turnover; it is deflated back to earlier years by the GDP deflator so costs and revenue are compared like-for-like.
Costs vary by sector and firm. Actual cost burdens differ significantly by sector and firm characteristics. For firms with substantial EU trade or above-average compliance overhead (e.g. food manufacturing, some financial services), the model likely understates the true burden, because direct Brexit costs are excluded. For domestically focused firms with lean compliance and below-average operating costs (e.g. some professional services), the model may overstate the burden. The figures shown reflect a plausible mid-range for a typical mid-sized SME, not the realised costs of any individual business.

See the methodology report here

View report