On 26th November, Chancellor Rachel Reeves delivered the 2025 Autumn Budget, setting out how the government plans to close a £20 billion shortfall, bring national debt under control and respond to ongoing cost-of-living pressures.
For small and medium-sized businesses (SMEs), the Budget introduces a mix of cost-saving measures, tax adjustments and sector-specific changes. Below, we’ve summarised the announcements most likely to impact your business.
1. Tax, Pension and Savings Changes
Frozen Tax Thresholds
National Insurance and income tax thresholds will remain frozen until 2028.
Salary Sacrifice Cap
From April 2029, the tax-free amount that can be contributed through salary sacrifice schemes will be capped at £2,000.
Wage Increases
- National Living Wage will rise to £12.71 per hour from April 2026.
- The rate for 18 to 20 year-olds increases to £10.85 per hour.
Employee Ownership Trust Reform
Businesses sold to EOTs will see capital gains tax relief reduced from 100% to 50%.
Dividend, Property & Savings Income
Tax rates on dividend income, rental income and savings income will each rise by 2 percentage points.
Cash ISA Flexibility
Savers will now be able to pay into multiple Cash ISAs within the same tax year, offering more flexibility on where to hold savings.
Restrictions on Voluntary NICs
Individuals living overseas will no longer be able to pay voluntary National Insurance to qualify for the UK State Pension.
2. Business Taxes & Investment Incentives
UK Listings Relief
A three-year stamp duty exemption will apply to newly listed companies on UK stock markets.
New 40% First-Year Allowance
A fresh investment incentive will allow businesses to claim 40% upfront tax relief on qualifying capital expenditure.
Apprenticeship Support
Training for apprentices under 25 will be fully funded for SMEs.
Business Rates Reduction
Business rates will be cut to relieve pressure on firms struggling with rising operational costs.
3. Travel & Transport Costs
Fuel Duty Freeze Extended
The existing 5p cut in fuel duty remains in place until 2026.
Electric Vehicle Road Duty
From April 2028:
- Electric cars: 3p per mile
- Plug-in hybrids: 1.5p per mile.
4. Sector-Specific Announcements
Gambling & Betting
- Remote Gaming Duty rises to 40% from April 2026.
- Online betting duty increases to 25% from April 2027.
- Bingo Duty abolished from April 2026.
Manufacturing
Manufacturers will benefit from lower electricity costs, with further detail still to come.
Soft Drinks Industry Levy Expansion
From January 2028, the levy will extend to milk-based drinks with added sugar.
Pubs & Hospitality
Pubs will gain extended late-operating rights, supporting the sector during peak trading periods.
5. Property, Compliance & Enforcement
High-Value Property Surcharge
From April 2028:
- Properties over £2m: £2,500 annual charge
- Properties over £5m: £7,500 annual charge
Stronger HMRC Powers
HMRC will receive enhanced authority to pursue tax avoidance scheme promoters and undertake more targeted fraud investigations.
Final Thoughts
This year’s Autumn Budget delivers a broad package of measures that will shape the financial landscape for SMEs over the coming years. While some changes introduce new costs or obligations, others, such as reduced business rates, the new first-year allowance and support for apprenticeships, offer welcome opportunities for investment and growth.
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