Forum managing director Ian Cass said: "We were caught unawares by the announcement of the National Living Wage in the July Budget and owe it to our members to ensure that this does not happen again.
"It is not clear what changes the Chancellor will make to the reduction or tampering of Tax Credits but it is important that additional costs are not put on small and medium-sized employers to pay for these changes."
"Recent research from the Forum showed that in 2104/5 the cost of employment was the major increase in small business inflation and that 37 per cent cannot pass these savings on to their customers meaning that such increases directly impact on the ability of a small firm to invest and employ."
The letter says the Forum supports wage increases when they are introduced as a result of improved profits.
Cass added: "Compliance costs for employers with fewer than 10 people are around £3,000 per person - that is the same cost as their entire Employment Allowance. Reducing the level of compliance so that businesses can be more productive is now imperative. Without such cuts, it is hard to see how employment costs can be reduced."