What the 2025 Autumn Budget Means for Businesses

The 2025 Autumn Budget brings a mix of challenges and opportunities for businesses. With so much to take in, it’s important to understand how the new measures could impact not only costs and taxes, but also workforce planning, investment decisions, and long-term business strategy.

In this article, we’ll break down the key takeaways in simple terms.

What’s Changed for Businesses?

The Budget brings a mix of opportunities and challenges that might feel overwhelming for business owners. Here’s what you need to know.

What’s Helpful?

The government has emphasised its focus on supporting innovation and helping businesses grow, which is encouraging for high-growth companies and entrepreneurs.

• No change to corporation tax
  Corporation tax is staying at 25%, giving businesses some stability and certainty
• More upfront tax relief on investment
  The Budget introduces a permanent 40% First Year Allowance, allowing businesses to claim more tax relief upfront when they invest in things like new equipment or machinery. This helps make investment more affordable and improves cash flow
• Annual Investment Allowance remains
  The £1 million Annual Investment Allowance is also staying in place, giving further tax relief on qualifying spending.

What’s Tougher?

Higher personal taxes over time and rising operating costs may make things more challenging for business owners.

• Personal allowance stays frozen
  Income tax rates aren’t increasing, but the government has frozen tax and National Insurance thresholds until 2030-31. This means that as wages and inflation rise, more people (including business owners) could move into higher tax brackets
• Tax increase on dividends
  For owners of limited companies who pay themselves via a mix of salary and dividends, personal tax on dividends, savings, and property income is set to increase.
• Minimum wage rises
  While good news for employees, the national minimum wage will increase from April 2026, which will raise labour costs for businesses
• Business rates reform
  Business rates are being reformed: retail, hospitality, and leisure businesses will benefit from permanently lower rates, but owners of other large properties (warehouses, offices) may face higher bills.
• Salary Sacrifice pension changes
  From 2029, Salary Sacrifice will continue and employees can benefit as normal from the income tax savings. However, the National Insurance savings will be limited to the first £2,000. While this could initially be a worry, it’s worth considering implementing Salary Exchange on your existing Workplace Pension scheme as there are still savings available to both your business and employees.

The 2029 measure will trim some NI advantages for those contributing over £2,000 a year, but Salary Sacrifice remains a valuable tool and should stay part of your benefits strategy. Your pension adviser can support workforce communications, explain the updates, and help plan any adjustments as more details emerge.

Adam Gibbs
Workplace Pensions Specialist

Salary Sacrifice Pension Changes: Why You Shouldn’t Panic

One of the more notable Autumn Budget changes is the long-term adjustment to how Salary Sacrifice pension contributions will be treated from 2029.

• Employers still save
  Even under the updated rules, your business will continue to save on National Insurance contributions. These savings can be reinvested into the business, used to boost employees’ pension contributions, or help offset rising employment costs
• Employees still benefit
  Compared to making a personal contribution, a Salary Exchange arrangement still reduces their NI bill today, along with increasing take home pay or boosting their pension pot. With tax thresholds frozen, higher pay can push employees into higher taxes, so increasing personal contributions through Salary Exchange can help offset this. (Plus, more than half of employees are keen to learn about its tax benefits)
• It’s still a way off
  The new rules won’t come into effect until April 2029, leaving more than three years’ worth of savings to be made. And while the extra contributions will be capped after this time, they won’t stop completely.