The Autumn Budget 2025 has been presented, the headlines are out…and if you’re a business owner, you’re probably wondering what this means for you (beyond the usual increase in paperwork and headaches).
Here’s the short version: your costs are going up, your tax breaks are going down, and HMRC is watching more closely than ever.
So, what’s in the detail and what should you be doing about it? Here’s a quick breakdown.
National minimum wage rises (again)
From April 2026, the national minimum wage is jumping up. Here’s what you’ll need to pay per hour:
- Aged 21+: £12.71/hour (up 9.6%)
- Aged 18–20: £10.85/hour (up 9.2%)
- Under 18s & apprentices: £8.00/hour (up 9.4%)
On top of that, personal tax thresholds are frozen until 2031, which means more employees will be pulled into higher tax bands and might be expecting pay rises to soften the blow. It’s time to revisit your payroll budgets.
| Time to revisit your payroll budgets? We can help! Get in touch with us to review your numbers and plan accordingly. |
Dividend and property income tax hikes
If you’re a company director who takes dividends (or you own rental properties), this one’s for you:
From April 2026, dividend tax increases to:
- 10.75% for basic rate
- 35.75% for upper rate
And from April 2027, property income tax increases to:
- 22% for basic
- 42% for higher
- 47% for additional
This dividend tax is on income you’ve already paid corporation tax on, so the effective rate is climbing significantly. If you extract income via dividends or rental properties, it’s time to review your strategy.
Changes to salary sacrifice
Salary exchange for pension contributions has long been a tax-efficient move. But from April 2029, National Insurance will apply to employee pension contributions over £2,000/year through salary sacrifice.
It’s not all bad: you’ll still save tax, just not quite as much as before. This change does not applies to other salary exchange schemes, like those for electric vehicles and childcare (yet!). If you want to know more about how to use salary exchange effectively, here are some helpful reads:
Business rates changes (and some good news!)
If you’re in retail, hospitality or leisure, you can breathe a sigh of relief. From April 2026, businesses with premises under £500k will pay reduced business rates. There’s also a three-year grace period if you expand to a second site, so you won’t be penalised for growing. Finally, a policy that rewards ambition!
However, large warehouses will pay more. If your business uses bigger premises, you’ll want to model this impact early.
More tax, more rules, more admin
Here’s a quick-fire round of additional changes that are being made:
- Equipment relief falls from 18% to 14% (April 2026).
- Employee Ownership Trust CGT relief halved (November 2025).
- Business Asset Disposal Relief rises to 18% (April 2026).
- New 40% First Year Allowance launches January 2026.
- Homeworking allowance scrapped (April 2026) – unless actually reimbursed by the employer.
- EV mileage tax arrives (April 2028) – but weirdly not for fossil fuel vehicles.
- Mandatory e-invoicing (April 2029) (we are already ready for this change!)
- Import duty relief scrapped (March 2029).
- Visitor levies for hotels and holiday lets.
- Quarterly/monthly income tax payments from April 2029.
- EMI share option limits increased.
- SEIS/EIS/VCT changes (but VCT relief drops to 20%).
- Fuel duty rises in stages in 2026.
- Private jet tax hike (April 2027).
- IHT allowance on farms/businesses now transferable.
- ISA reforms for under 65s.
- Two-child benefit cap lifted.
- High-value property council tax surcharge from April 2028.
So yes, compliance is getting more expensive and more complex (as if it wasn’t already).
And don’t forget: enforcement is ramping up. The government is investing in HMRC to target small businesses and recover £2.3 billion in unpaid tax. Make sure your records are watertight, and if you don’t already have it, consider tax investigation insurance.
| Want a professional to check your books? Get in touch with us to make sure everything is in order (and it stays that way). |
Two odd changes you might have missed
This budget also delivered some… shall we say, “quirky” policy changes.
Firstly, HMRC’s settlement terms for the Loan Charge were updated. If you or someone you know has been affected by this long-running issue, you’ll want to read our full breakdown here.
Secondly, taxi firms are facing VAT chaos. Depending on where they’re based and how they contract with passengers, they may be subject to totally different VAT rules – even for providing the same service. It’s as weird as it sounds. We explain the madness here.
What should you do now?
All in all, the Autumn Budget 2025 for business owners means:
- Higher wage bills
- Lower tax reliefs
- More admin
- Tighter enforcement
So what’s the plan? We recommend that you:
- Review wage budgets and pricing
- Review your salary and dividend mix
- Recheck PAYE and pension strategy
- Look ahead at tax planning
- Assess how any of these changes might affect your business structure
- Get your compliance in order and stay ahead of HMRC (before they knock on your door)
It’s not all bad news. If your tax bill is going up, it often means your income is too. But don’t sleepwalk into higher costs. Plan now, confirm the impact on your business, and stay in control.
| Let’s talk about your businessEvery business is different, and the Autumn Budget 2025 for business owners has a lot of moving parts. If you want help making sense of how these changes affect you or building a smarter tax and financial strategy, we’d love to help.Email us at [email protected]. |
