Autumn Budget 2025: What It Means for UK Businesses
- Strength in Numbers
- 7 days ago
- 3 min read
The Autumn Budget 2025 delivered a wide range of measures that will shape how UK businesses plan, invest, and manage their finances over the next few years. While the government aims to stimulate growth and boost investment, many business owners will also face new cost pressures and compliance requirements.
Below is a clear breakdown of the key announcements affecting small and medium-sized businesses and what they mean in practice.
Corporation Tax & Investment Reliefs
The government has confirmed that the main rate of Corporation Tax will remain at 25% for companies with profits above £250,000, with a tapered rate for those earning between £50,000 and £250,000. This cap is set to stay in place for the rest of the Parliament, giving businesses stability when planning ahead.
Capital Allowances Remain Generous
Investment incentives continue to be strong:
Full expensing remains available for qualifying new plant and machinery.
The Annual Investment Allowance stays at £1 million.
A new 40% First Year Allowance (FYA) will apply to most main-rate assets from January 2026.
What this means: Businesses planning to invest in equipment, technology, or automation can still benefit from significant upfront tax reliefs. This is an opportunity to bring forward investment while reliefs remain at their most generous.
Support for Growing Companies & Investment Incentives
The Budget introduced reforms designed to help scaling companies attract capital.
Changes to EIS & VCT Investment Rules
From April 2026:
Investment limits for qualifying companies under the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT) will rise.
Knowledge-intensive companies will benefit from even higher investment caps.
Upfront income-tax relief for VCT investors will reduce from 30% to 20%.
Additionally, newly listed UK companies will benefit from a temporary three-year removal of Stamp Duty Reserve Tax to encourage investment in domestic firms.
Impact: Growth-oriented companies may find it easier to raise funding. For accountants and advisers, this is a key area where businesses will need guidance as they explore scaling opportunities.
Business Rates Changes
Business rates were a major element of this year’s Budget.
Who Benefits?
Retail, hospitality, and leisure businesses will benefit from permanently lower business-rates multipliers.
A £4.3 billion support package has been introduced to ease the impact of the upcoming 2026 property revaluation.
Who Will Pay More?
Larger premises such as warehouses, industrial units, and big retail units — will likely face higher bills.
What this means: High-street businesses receive welcome relief, while companies with substantial property footprints should prepare for higher operating costs. Reviewing cashflow will be essential.
Rising Employment Costs
From April 2026:
The National Living Wage for over-21s will rise to £12.71 per hour.
Rates for younger workers and apprentices will increase as well.
For labour-dependent businesses, this will have a notable impact on payroll budgets.
Action point: Businesses should review staffing costs early, update budgets, and explore efficiency improvements ahead of the increase.
Dividend Tax & Compliance Changes
Owner-managed companies will feel several changes:
Dividend Tax Increases
From April 2026:
Dividend tax rates for basic-rate and higher-rate taxpayers will rise.
Many directors who rely on dividends for remuneration will see reduced take-home income.
Stricter Penalties
Late-filing penalties for Corporation Tax returns will double from April 2026.
New measures will target aggressive tax planning and non-compliance.
What this means:Directors will need to reassess their salary-dividend mix, pension planning, and broader tax strategy. Stronger financial controls and timely filing will be more important than ever.
The Bottom Line for SMEs
The Autumn Budget 2025 offers opportunities for growth and investment, but also introduces higher employment costs, tighter compliance rules, and increased taxation for owner-managers.
For many businesses, the key to navigating these changes will be:
Investing strategically while capital allowances remain favourable
Reviewing cashflow forecasts and budgeting for increasing wage costs
Planning ahead for dividend tax changes
Ensuring compliance processes are robust to avoid penalties
How Strength in Numbers Limited Can Help
As the financial landscape evolves, having proactive support becomes invaluable. At Strength in Numbers Limited, we help directors stay in control of their finances through:
Forward-looking tax planning
Payroll and cashflow forecasting
Capital investment planning
Compliance and filing management
Advisory support through our Virtual Finance Officer and Complete Accountancy Package
If you’d like tailored guidance on how the Autumn Budget 2025 affects your business — or you want support preparing for the changes ahead — we’re here to help.
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