Autumn Budget 2025: What's in Store for Small UK Businesses This Autumn Budget
- Rory Dunn
- Oct 8
- 3 min read
With the Autumn Budget scheduled for 26 November 2025, small business owners are bracing for a wave of changes. The government is under pressure to address a projected £40 billion deficit, yet Labour has pledged not to raise income tax, national insurance, or VAT for working people. As a result, expectations are high that business taxes and regulatory tweaks may bear the burden.
Here are the key predictions and rumours circulating among economic commentators and business groups:
1. Raising the Trading Allowance (Possibly to £3,000)
Currently, individuals earning up to £1,000 annually from side hustles or small sales can remain outside the tax net. Various marketplaces and business bodies are campaigning to increase this to £3,000. While politically popular, this move may conflict with the government’s broader freeze on thresholds.
2. Overhauling Business Rates
Reform of business rates is expected. The Chancellor is likely to confirm new rates for retail, hospitality and leisure properties (especially those under £500,000 in rateable value), to take effect April 2026. Also anticipated is a transitional relief scheme to help businesses facing steep increases.
3. Tweaks to VAT Rules
While the headline VAT rate (20 %) is widely assumed to remain unchanged (given political constraints), the scope of VAT is under speculation. Possible changes include lowering the threshold so more small businesses are VAT-registered, or reclassifying goods and services (e.g. shifting items from reduced rate or zero-rate to the standard rate).
4. Changes to Capital Gains Tax (CGT)
CGT reforms are often raised as a means to raise revenue from wealthier individuals. The upcoming Budget may:
Increase CGT rates
Differentiate rates by asset class
Align CGT more closely with income tax rates
Redefine rules for reliefs like Hold-Over Relief
5. Fuel Duty & Energy Levies
Fuel duty has been frozen since 2011, currently set at 52.95 pence per litre, with the freeze extended until March 2026. Some analysts think a modest increase (in line with inflation) is now on the table, though the Chancellor must tread carefully to avoid reigniting inflation pressures.
6. Freezing Income Tax Thresholds
Extending the current freeze on income tax thresholds is a stealth way to increase revenues: as pay rises, more people are pushed into higher tax bands. Although the government has pledged to restore alignment with inflation from 2028–29, that promise may be postponed depending on fiscal pressures.
7. Inheritance Tax (IHT) Reforms
To boost receipts, the government may tighten the rules around gifts and estate transfers. One proposal is reducing the “safe period” for gifts made before death or restricting the value exempted from IHT.
8. New Levies: Banks & Gambling
These sectors are widely rumoured candidates for special levies or windfall taxes. A bank levy could raise significant revenue without directly impacting individuals, and a gambling tax is seen as a politically viable target.
What This Means for Small Businesses
Uncertainty ahead: Many changes depend on final policy design; prepare by modelling different “tax-hit” scenarios.
Watch your thresholds: If VAT thresholds or trading allowances shift, small businesses may cross new limits unintentionally.
Property costs matter: If your business occupies premises, business rates reform could materially affect your overheads.
Seek tailored advice: Given the complexity and variability of the changes, guidance from accountants/tax specialists will be more valuable than ever.
As we edge closer to 26 November, it’s wise to stay alert to announcements and draft plans accordingly. When the Budget drops, we’ll digest the changes and highlight what matters most to small businesses.
How Approved Finance Group Can Support You Through Uncertainty
The lead-up to a major Budget announcement can be unsettling for small business owners, especially when future tax rates, thresholds, or borrowing costs are on the table. At Approved Finance Group, we understand how crucial stability is when planning your next move.
Whether you’re looking to invest in new equipment, refinance existing loans, or simply secure working capital ahead of potential changes, we’re here to help. Our experienced team works with a wide range of lenders to find tailored funding solutions that suit your business goals, and your cash flow.
Importantly, when we provide a finance quote, it can be valid for up to three months. That means you can lock in your rate now and protect your business from any potential cost increases that might follow the Autumn Budget.
So if you’re considering new finance, it may be worth acting sooner rather than later, ensuring you’re ready for whatever the Chancellor announces next month.
Get in touch today by calling 01908 429888 or click here to discuss your options or request a no-obligation quote from one of our specialists.
