As the leaves turn and the year draws to a close, business owners must stay informed about the latest financial developments. The Autumn Budget, presented by Chancellor Rachel Reeves on 30 October, introduced several significant changes to address the UK’s economic challenges and to support businesses.

Here’s a breakdown of the key measures and their implications for your business.

Corporation tax remains steady, but incentives increase

The government has maintained the corporation tax rate at 25%, the lowest in the G7, providing stability for businesses planning their financial strategies. Additionally, the government has published a corporation tax roadmap, confirming that this rate will be capped at 25% for the duration of the Parliament.

The government has extended the 100% energy investment allowance and the decarbonisation relief to encourage investment, particularly in green technologies. These measures aim to support businesses investing in energy-efficient equipment and sustainable practices, aligning with the UK’s commitment to reducing carbon emissions.

Personal allowance freeze continues, impacting disposable income

The personal allowance – the income threshold at which individuals start paying income tax – will remain frozen until April 2028. With inflation affecting households across the UK, this freeze effectively reduces disposable income as wage increases push more earnings into higher tax bands. The Office for Budget Responsibility (OBR) forecasts that this measure will increase the number of taxpayers and raise additional revenue for the government.

For business owners, this means adjusting financial plans to account for potential reductions in employees’ take-home pay, which may affect overall spending. Reviewing employee benefits and perks can help support your team during this period.

Energy relief support: A lifeline for SMEs

Energy costs continue to be a significant concern for businesses. In response, the government has announced additional energy support for small and medium-sized enterprises (SMEs), including caps on energy prices for sectors that rely heavily on energy use, such as manufacturing. This relief aims to alleviate the financial burden on businesses and encourage investment in energy-efficient technologies.

This support allows businesses to allocate savings towards other areas, such as upskilling staff, expanding product lines or enhancing their online presence. Exploring energy efficiency upgrades can also lead to long-term cost savings.

National living wage increase supports workers but raises costs

The government has announced an increase in the national living wage, which will rise by 6.7% to £12.21 per hour from April 2025. This increase aims to support low-paid workers and improve living standards.

However, this also represents a cost for businesses, particularly those in sectors with a large proportion of minimum-wage staff, such as hospitality and retail. Adjusting payroll budgets is essential, and businesses may need to evaluate pricing strategies or efficiencies to manage these additional costs without compromising quality or service.

Stamp duty adjustments

The government has adjusted stamp-duty rates to stimulate the housing market, including an increase in the surcharge on second homes from 3% to 5%. This measure aims to make housing more accessible for first-time buyers and reduce speculative property investments.

Due to these adjustments, businesses involved in property investment, development or related services may experience changes in market activity. It’s important to assess how these changes could impact your operations and explore opportunities to adapt to the evolving market.

Digitalisation of tax: Mandatory Making Tax Digital (MTD)

The government has reiterated its commitment to Making Tax Digital (MTD) and has extended the requirement to all VAT-registered businesses, regardless of turnover. This digitalisation initiative aims to streamline the tax process, making it easier for businesses to report VAT accurately and avoid errors.

This might feel like an additional cost or administrative burden for businesses that have yet to implement digital accounting systems. However, MTD can significantly simplify financial record-keeping and many businesses that have transitioned report time savings and reduced tax errors. Now may be the right time to explore compatible software solutions or work with an accountant who can support this transition smoothly.

Supporting small businesses in uncertain times

Many businesses face challenges, from rising costs to regulatory pressures, but the Autumn Budget brings some encouraging news. Increased tax reliefs, energy support and wage adjustments can help business owners find footing and prepare for future growth.

At Total Accounting, we’re here to help you understand what these changes mean for you, no matter your industry or business size. From adjusting financial plans to making the most of tax reliefs, we offer tailored advice to ensure your business stays resilient.

Let’s work together to take advantage of these opportunities and build a more secure financial future for your business.