By Heather Bright
It has been a turbulent time in the build-up to the Autumn Budget and there is a slight sense of relief that it is finally over. For small business owners, any relief has been short-lived as the reality of the economic situation ahead has slowly been closing in.
If you are worried about keeping your business going in the next year, it’s time to break down the Budget and figure out what you can do.
What challenges do small businesses face after the Autumn Budget?
For businesses that have been struggling to keep pace with the current economic climate, there was a slight hope that the Autumn Budget might provide a light in the darkness.
Unfortunately, no such light arrived for many and a number of changes will push costs up, complicate planning and accelerate “fiscal drag” – the stealth rise in tax take when thresholds are frozen.
Personal tax thresholds do have an impact on small businesses and the people who are necessary for their growth.
The full impact of these changes will be felt over the coming months and years as a question remains as to why the average person will see an increase in their spending power.
If they do, this could see businesses finding more commercial success, but it is possible that rising costs and increased tax burdens will stifle any apparent boosts that individuals may be given.
Wages, payroll and take-home pay
On the topic of spending power, that originates from the wages people earn.
While increases to wages are welcome news for workers, businesses struggling under the operational pressures may not find the news as exciting.
From 1 April 2026, the rates will increase as follows
- National Living Wage (NLW) – £12.71 per hour (up 4.1 per cent)
- National Minimum Wage (NMW) for 18-20 year olds – £10.85 (up 8.5 per cent)
- NMW for 16-17 year olds and apprentices – £8.00 per hour (up 6 per cent)
Of course, employer and employee National Insurance Contributions (NICs) will have to be made on any increased wages, resulting in higher operational costs.
For any businesses that employ people above the NLW, they should be taking a look at how employees are currently paid.
A full-time worker on NLW will be on an annual salary of £26,436.80 following the pay increase.
The announcement may be causing your employees, especially those who are graduates, to eye you with suspicion while they wait to see how you work to keep fair rates of pay in the workplace.
There are other payroll changes coming that affect benefits and reward design.
The Government has confirmed a change to salary-sacrifice pension arrangements that will see them lose a lot of the appeal they once carried.
From April 2029, only the first £2,000 of employee pension contributions made via salary sacrifice will be exempt from NICs.
This will alter the attractiveness of some salary-sacrifice schemes and may change how employers structure pensions and benefits.
Capital allowances, investment and timing decisions
The Budget also worked to change how capital allowances are managed going forward.
The main rate of writing-down allowances for most businesses is being reduced to 14 per cent, with the change taking effect for Corporation Tax from 1 April 2026 and for Income Tax from 6 April 2026.
At the same time, the government is introducing a new 40 per cent first-year allowance for certain qualifying expenditure from 1 January 2026.
Both of these measures weaken the tax relief on investment, although there are some specific incentives in place to offset the impact.
Small firms planning machinery, vehicle or equipment purchases should re-run the numbers to decide whether to accelerate or delay spending.
We can help you determine the best approach for your specific business to ensure that you can stay competitive in the coming months and years.
Succession and sales – What changed with EOTs?
If you are thinking about selling your business to your people, then you should be aware of some succession changes.
The Budget cut the Capital Gains Tax relief for disposals to Employee Ownership Trusts (EOTs) from 100 per cent to 50 per cent, with immediate effect from 26 November 2025.
It is unlikely that an EOT would be used purely for the tax benefit and the rest of the perks associated with EOTs are still in place.
What has changed is the degree to which the relief applies, meaning that it is necessary to revisit any calculations and forecasts made before the Autumn Budget.
The winners and losers of changing business rates
There is an olive branch for some high-street businesses, provided they operate in a sector that the Government is aiming to renew.
From 1 April 2026, the government will introduce permanently lower multipliers for retail, hospitality and leisure (RHL) properties in scope, while also creating a new high-value multiplier for certain large or higher-valued properties.
The changes will see some smaller cafés, shops and pubs face lower multipliers and therefore lower bills, but the relief is narrowly targeted and many businesses will not feel the benefit.
We can help individual businesses understand the impact of any changes and how to make the most of the reliefs that are available.
How can the impact of the Autumn Budget be managed by small businesses?
At times like this, it is necessary to use all the resources available to you.
Our team of experts are on hand to help you manage the impact of the Autumn Budget as it unfurls over the next few years.
We can review your business plans and help you budget as best as possible with the rising pressures on the bottom line.
We will help you find any grants, loans, or other funding avenues that can offset some of the difficulties faced to ensure that your business makes it through the year.
Speak to our team today for expert support in managing the fallout of the Autumn Budget.