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Autumn Budget 2025 explained – What it means for your business

Overview and key points

The Chancellor’s Autumn Budget always sends ripples through the business community, and this year is no exception. With speculation dominating headlines, many business leaders are asking: What does this mean for us?

To help our clients answer that question confidently, our Chief Client Officer, Jonathan Miller, sat down for a Q&A session with Patrick Murray, an experienced CFO from The CFO Centre, who shared with us his practical insights and advice to help businesses plan with confidence.

Q&A with Patrick Murray:

What are the key impacts of the Autumn Budget for businesses?
Unlike last year’s sweeping reforms, this Budget introduces targeted adjustments that will still have significant implications for employers and business owners.

Key points include:

  • Dividend Tax Increase: Basic and higher rates on dividends will rise by 2%, increasing tax costs for business owners. This may require rethinking the balance between salary and dividend payments.

    • Capital Allowances:

  • Positive: A new 40% first-year allowance on qualifying plant and machinery (excluding cars and second-hand equipment) from January 2026.
  • Negative: Main writing-down allowance rate drops from 18% to 14%, slowing tax relief on other assets. Businesses should review timing of capital investments.
  • Employee Incentives: EMI (Enterprise Management Incentive) scheme thresholds have been expanded, making it easier for more businesses to offer tax-advantaged share options. However, Employee Ownership Trust (EOT) relief has been reduced from 100% to 50%, making this route less attractive.
  • Business Rates: Changes to multipliers will provide relief for retail, hospitality, and leisure sectors, but a revaluation in April 2026 may increase rates for others. Build this into cash flow planning.
  • Electric Vehicle (EV) Tax: From April 2028, a per-mile charge will replace fuel duty for EVs. Businesses with fleets should prepare for record-keeping and cost implications.
  • Inheritance Tax Relief: Agricultural and Business Property Relief allowances can now transfer to a surviving spouse, potentially shielding up to £3m of assets from IHT. This is significant for SMEs and family-owned businesses.

How will these changes affect business planning?
These measures will require businesses to rethink reward structures, investment timing, and cost management. Dividend tax increases mean owners should review remuneration strategies. Capital allowance changes create opportunities for accelerated relief but require careful timing. Expanded EMI schemes offer new ways to incentivise employees, while reduced EOT relief may impact succession planning. Rising wage costs and EV charges add further pressure on budgets, making cashflow forecasting and scenario planning essential.

How should business owners respond to the Budget?
Patrick’s advice: Plan early and model the impact.

  • Review dividend vs salary mix ahead of tax increases.
  • Assess capital expenditure timing to maximise allowances.
  • Revisit employee incentive schemes—expanded EMI thresholds could open new opportunities.
  • Build wage increases and business rate changes into forecasts.
  • Prepare for EV tax implications if you operate a fleet.
  • Seek expert advice on succession planning and inheritance tax relief.

Key takeaways for businesses

  1. Dividend tax rises will affect owner remuneration strategies.
  2. Capital allowance changes create timing opportunities for investment.
  3. EMI expansion and EOT reduction reshape employee incentive planning.
  4. Business rate changes and EV tax require proactive budgeting.
  5. Inheritance tax relief adjustments benefit SMEs and family businesses.

Conclusion
Autumn Budget 2025 may not have introduced dramatic reforms, but its subtle changes will shape business planning for years to come. The message is clear: start planning now, stay informed, and seek expert advice to protect profitability and attract talent. If you’d like to speak with one of our talented Risk Advisers or connect with Patrick or a member of The CFO Centre team, please don’t hesitate to get in touch, either directly via their website or through your existing Partners& relationship holder.

Looking for personal insights?
Read our companion blog: Autumn Budget 2025 explained – What it means for your personal finances

Source – Budget 2025 (HTML) – GOV.UK