top of page
Search

UK Autumn Budget 2025: Relief for High Streets, Pressure on Entrepreneurs

  • Writer: Stuart Ashley
    Stuart Ashley
  • Nov 28
  • 3 min read

Targeted Support Meets Rising Costs


Introduction

The November 2025 UK Autumn Budget delivers a mixed outcome for small businesses. Retail, hospitality, and leisure firms gain permanent business rate relief, but entrepreneurs and owner-managed companies face higher dividend taxes, frozen thresholds, and rising wage costs. The government’s stated aim is to protect community-facing businesses while tightening fiscal discipline elsewhere.


The Problem

Small businesses are navigating a fragile economic environment:

  • Slowing growth: GDP forecasts downgraded to 1.4–1.6% annually between 2026–2028.

  • Inflationary pressure: Inflation expected at 3.5% in 2025, slightly above earlier estimates.

  • Labour costs: Minimum wage and Real Living Wage increases will raise payroll bills significantly.

  • Tax squeeze: Dividend tax hikes, frozen thresholds, and new property/savings income bands reduce disposable income for entrepreneurs.


The Simple Fix

The Budget introduces targeted measures designed to cushion high street businesses and encourage investment:

  • Business Rates Relief: Permanent lower rates for over 750,000 retail, hospitality, and leisure properties from April 2026.

  • Support Packages: £4.3bn earmarked to help businesses hardest hit by rate changes.

  • Investment Incentives: £1m Annual Investment Allowance retained; 40% First Year Allowance for main rate assets.

  • Growth Funding: British Business Bank gains £25.6bn capacity, with £5bn ring-fenced for scale-ups.

  • Green Transition: £2bn EV support package plus 10-year business rates relief for EV forecourts.

  • Fuel Duty Freeze: Maintained until September 2026, delaying the reversal of the 5p cut.


The Results

  • Winners:

    • Independent shops, pubs, and leisure venues benefit from lower rates and extended relief.

    • Scale-ups gain access to expanded British Business Bank funding.

    • EV forecourts enjoy long-term business rates relief.

  • Losers:

    • Owner-managed businesses relying on dividends face higher tax bills.

    • Larger property occupiers with rateable values above £500,000 see increased rates.

    • Labour-intensive SMEs in hospitality and retail absorb higher payroll costs.

  • Mixed Outcomes:

    • Investment incentives and BBB funding help growth firms, but frozen thresholds and tax hikes squeeze margins.

    • Fuel duty freeze offers short-term relief, but reversal from 2026 adds future cost pressure.


Why It Works

The Budget reflects a balancing act:

  • Community-first: Relief is concentrated on high street businesses that anchor local economies.

  • Revenue discipline: Tax hikes on dividends, savings, and property income shift the burden to entrepreneurs and investors, raising revenue without headline corporation tax increases.

  • Growth signalling: Investment allowances and BBB funding send a message of support for scale-ups and capital investment.

  • Fairness narrative: Wage increases and pending Employment Rights Bill strengthen worker protections.


Quick Action Checklist

  • Property: Check your rateable value and confirm eligibility for relief or transitional schemes.

  • Tax Planning: Reassess dividend strategies before April 2026; explore alternative remuneration structures.

  • Payroll: Update wage forecasts for minimum wage and Real Living Wage increases; model impact on margins.

  • Investment: Review capital expenditure plans to maximise Annual Investment Allowance and First Year Allowance.

  • Funding: Explore British Business Bank programmes, especially if scaling up.

  • Transport: Factor in fuel duty changes and EV transition support into logistics planning.


Bullet Points (Key Measures Recap)

  • 📊 GDP growth downgraded to 1.4–1.6% (2026–2028); inflation at 3.5% in 2025.

  • 🏪 Permanent lower business rates for retail, hospitality, leisure; higher rates for properties above £500,000.

  • 💰 Dividend tax rises (basic 10.75%, higher 35.75%); new property and savings income tax bands.

  • 👷 Minimum wage increases across all age groups; Real Living Wage uplift to £13.45 (outside London) and £14.80 (London).

  • 🚚 Fuel duty freeze until Sept 2026; £1m Annual Investment Allowance retained; £2bn EV support package.

  • 💼 British Business Bank capacity expanded to £25.6bn, with £5bn for scale-ups.


Sources


Disclaimer

Whilst every precaution has been taken to ensure this information is accurate, Stuart Ashley takes no responsibility for any errors contained within. Please conduct your own research before making business or financial decisions.


Money money money.....
Money money money.....

Comments

bottom of page