It was a bizarre and historic lead-up to the 2025 Autumn Budget, with the OBR leaking its analysis almost an hour before the actual announcement. And thankfully for Rachel Reeves, this stayed as the main talking point, as she delivered what appeared to be a fairly uneventful Budget for businesses.
Here’s what you need to know in a nutshell…
Tax wins and losses
After a taxing April announcement for small businesses, the Autumn Budget defied speculation of further changes with a freeze across the board. That means no nasty National Insurance, VAT, or Corporation Tax increases.
However, business owners didn’t get away scot-free. Most notably, dividend tax is going up in April 2026 – by two percentage points to 10.75% for the basic rate of tax and to 35.75% for the higher rate. This will be a big hit for founders who rely on dividends as their main source of income.
Meanwhile, Income Tax thresholds will be frozen until the end of the 2029-30 financial year, an all-too familiar stealth tax at a time where inflation continues to rise. This was paired with rolling out National Insurance contributions for annual pension contributions above just £2,000 as salary sacrifice came under fire.
Minimum wage up, apprenticeships… free!
From 1 April 2026, the National Minimum Wage paid to workers aged 21 and over will rise by 4.1%, increasing from £12.21 an hour to £12.71 an hour. This equates to an increase of around £900 a year for a full-time employee on that rate – so plan accordingly.
Meanwhile, the cost of training under-25 apprentices will be made completely free for SMEs. A Treasury document added: “Alongside this funding, the government will introduce new reforms to simplify the apprenticeship system and make it more efficient as short courses are introduced from April 2026.”
Small Business Rates relief
Business rates were a big worry going into the Budget, but it seems Rachel Reeves listened to these concerns and gave special treatment for certain vulnerable sectors.
A permanent lower tax rate for retail, hospitality, and leisure (RHL) businesses will be introduced. These rates will be 5p lower than the national multipliers, making the small business RHL multiplier 38.2p in 2026-27 and the standard RHL multiplier 43p in 2026-27. It’ll be paid for by higher business rates on properties worth more than £500,000.
Investment made easier
Investment was high on Reeves’ agenda this week, with several announcements made including a new 40% first-year allowance so that businesses can write off more of the cost of their investment upfront.
Investor tax reliefs have been expanded, increasing the investment limit for Venture Capital Trust (VCT) and Enterprise Investment Scheme (EIS) companies, improving access to funding for companies going for growth.
Navigate your next step with Nabarro Poole
Making the right financial moves in a constantly changing economic landscape can be hard, especially when you’re focused on leading your business from the front. That’s where a financial expert like Nabarro Poole can help. We’re more than just numbers people – we’re an owner-managed firm that can partner with you to help you achieve your growth goals with bespoke support.
Get in touch with our friendly team today to find out more about how we can help.
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