Which Taxes Could Rise in the Autumn Budget 2025 - and What It Means for Your Business
- Mark Kozo
- 3 days ago
- 4 min read
With the Autumn Budget 2025 now just days away (26 November), UK businesses are bracing for what could be one of the most consequential fiscal announcements in recent years. Chancellor Rachel Reeves must address a public finances gap estimated at £22–40 billion, while staying within strict fiscal rules requiring debt to fall and day-to-day spending to be fully funded.
In the last week, the tax landscape has shifted again, and it has major implications for SMEs.
Income Tax: Rate Rises Ruled Out - But Fiscal Drag Tightens
In a significant development, both Rachel Reeves and Keir Starmer have now ruled out raising income tax rates in the upcoming Budget. The announcement followed concerns over economic confidence and market stability.
However, the U-turn triggered immediate market reaction: UK government bond yields rose and the pound fell, signalling investor concern about how the government will now plug the fiscal gap.
This makes one thing clear: while income tax rates won’t rise, the Treasury will need to look to other mechanisms, and for small businesses, these may be just as impactful.
A continued freeze on Income Tax and National Insurance thresholds is now expected to form a major part of the Budget. This “fiscal drag” quietly raises tax bills as wages increase.
Rory Dunn, Director of Business Finance at Approved Finance Group, says:
“If the recent announcements are accurate, then even without rate rises, the threshold freeze will still push many owners and staff into higher tax brackets. For SMEs, that inevitably tightens margins. Ensuring strong cash flow and having flexible finance in place will be essential to staying ahead of the pressure this creates.”
For SMEs, this means now is the time to review payroll structures, remuneration planning and personal tax exposure.
Business Rates & Property Tax Reform: Increasingly Likely
Reeves has repeatedly indicated that business rates reform will be a central part of the Budget. The government has already published the Business Rates Forward Look outlining a commitment to easing barriers for small businesses expanding into additional premises, particularly the harsh rate “cliff edges” that penalise growth.
Alongside rates reform, there is growing expectation that the government will examine:
Stamp Duty restructuring
Council Tax modernisation
Potential Capital Gains Tax changes for property disposals
New measures affecting landlords
Kelly Moody, Senior Property Finance Broker at Approved Finance Group, notes:
“We’re seeing more businesses seeking advice early because they know property taxation is likely to shift. Whether they’re refinancing or planning to expand, they want to get ahead of any changes that could affect valuations, borrowing costs or lender appetite. That’s why now is the best time to explore property finance options such as commercial mortgages, bridging loans, development finance and buy-to-let mortgages, it allows businesses to lock in today’s terms and stay financially prepared before new rules come into play.”
For any SME that owns property, rents commercial premises, or plans to grow geographically, this budget could reshape cost forecasts.
Electric Vehicles & the Emerging “Pay-Per-Mile” Tax
One area gaining real traction is the introduction of a road-pricing model for electric vehicles (EVs). With fuel duty revenues declining, the Treasury is exploring a per-mile tax, potentially set at around 3p per mile from 2028.
This would add an estimated £250–£300 per vehicle per year to fleet operating costs.
Antony Fragola, Motor Business Development Director at Approved Finance Group, comments:
“This change, if confirmed, will reshape fleet economics. EV's still offer advantages, but the gap could narrow. Businesses need fleet strategies that remain flexible as tax policy evolves, and choosing the right finance option is a key part of that.”
For SMEs with company cars or vans, this is a major cost factor to start planning for now.
Pensions, Salary Sacrifice & Other Potential Tax Changes
The Chancellor is expected to introduce a £2,000 annual cap on pension contributions via salary sacrifice before National Insurance is applied, a targeted measure affecting higher earners and some employers offering generous benefit schemes.
Other areas still under active review include:
Higher taxes on select sectors (e.g., banking, gambling)
Closing the £135 low-value import loophole exploited by foreign online retailers
Adjustments to LLP tax rules
While not all SMEs will be directly affected, these changes could influence supply chains, competition and employee expectations.
Energy Support & Inflation Pressures Remain
Reeves may announce targeted support to help businesses manage energy costs, potentially through a temporary VAT reduction on gas and electricity or lower regulatory charges passed through by suppliers.
However, with inflation still above target, these measures are expected to be modest, and SMEs should not rely on sustained energy subsidies.
How Approved Finance Group Can Help You Prepare
At Approved Finance Group, we’re already working with SMEs to help them stay financially flexible and ready for change.
Our Business Finance team can help you shore up working capital and funding ahead of potential cost rises; our Property Finance division specialises in refinancing and structuring property investments amid tax-policy change; and our Motor & EV Finance specialists help you explore fleet-financing models that adapt to future tax landscapes.
By combining expertise with tailored finance solutions, we help businesses remain adaptable, confident and growth-ready, whatever the Chancellor announces this November.
What SMEs Should Watch After Budget Day
Once the Chancellor delivers the statement, businesses should closely monitor:
HMRC’s guidance on threshold freezes
The final wording of business rates reform
Property taxation updates, especially CGT and Stamp Duty changes
New EV policy detail and timelines
Any adjustments to salary sacrifice rules
OBR (Office for Budget Responsibility) forecasts on growth and inflation
These details often contain the real-world impact beyond the Chancellor’s headlines.
Final Thoughts
This Budget may mark a turning point: working-tax rate rises might be off the table, but the fiscal-pressure remains real. For small businesses, the risks are shifting into more subtle territory: threshold freezes, business-tax reform, property-tax exposure and evolving fleet costs.
The best way to stay ahead is to prepare, review, and access flexible funding now, so when the Chancellor’s red box lands, you’re in a strong position to navigate change rather than react to it.
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