And a further 13 % plan to start within the next six to 12 months, meaning six in 10 are either using AI now or will be shortly.

These findings come from Simply Business’ s 2026 SME Insights Report, a survey of 1,842 UK small businesses.

But this data also reveals a more complicated picture: widespread uptake hasn’ t translated into widespread confidence. And for many small businesses, the question is no longer whether to use AI – but how.

How are small businesses using AI?

Among those already using AI tools, the most common applications are creating content( 63 %), problem solving( 53 %) and generating ideas( 50 %). And for 46 %, AI is currently helping to save time on admin.

Those uses help show the practical pressures small business owners are facing. Small business owners often juggle many roles and can struggle to find the time to give to each of them. Any tool that cut down on repetitive tasks or help manage cash flow and planning carries real appeal.

Fay Phillips-Jones, Founder and HR Career Coach at Coaching With Fay, is one of many sole traders who’ ve found AI genuinely useful. She said:“ AI has played an important role in accelerating my business. As a sole founder, I use it to challenge my thinking, support business planning, organise information and develop more efficient systems. However, I treat AI as a thinking partner, not a substitute for thinking.”

The confidence gap: Adoption continues to outpace understanding

Despite the sharp rise in usage, confidence in AI lags behind. Just 19 % of small business owners describe themselves as‘ very confident’ using AI day-to-day. A third( 33 %) say they use it only for routine admin tasks.

AI barriers for small business owners

Security and privacy concerns top the list of barriers, cited by 44 % of small business owners. Not seeing a clear use for AI comes second( 39 %), followed by concerns about accuracy( 36 %).

Simply Business UK CEO, Julie Fisher, said:“ Adaptability and resilience are central to the DNA of small business owners and time and again they’ ve proven they’ re drivers of innovation – finding new ways to grow even in the face of challenging trading conditions.

“ One of the most significant shifts we’ ve tracked this year with our annual SME Insights Report is around AI adoption. Almost half say they now use AI in their business, up from 22 % in 2025. Yet 44 % say they’ re wary of security and privacy when it comes to AI tools, and 39 % aren’ t sure how it could be useful to them.

“ To help unlock even greater levels of innovation and productivity, small businesses need tailored guidance on how AI can be used, accessible tools and time to discover how it can work for them on their terms.” �

28 Intelligent SME. tech