Autumn Budget 2025 Business Impact: What Owners Must Know

How the Autumn Budget 2025 Business Impact Affects You

The Autumn Budget 2025 business impact is already being felt across the UK, especially among small business owners, landlords and self-employed directors. With changes to dividend tax, property income, business rates and capital allowances, the Budget introduces a mixture of new pressures and new opportunities. Understanding how these updates apply to your own financial position is now essential for planning, borrowing and preparing for the year ahead.

What changed: Key Autumn Budget 2025 announcements

Business & Corporate Tax / Investment Incentives

• The headline rate of corporation tax remains unchanged. 

• For companies and unincorporated businesses investing in plant or machinery: from 1 January 2026, a new 40% First-Year Allowance (FYA) becomes available for eligible main-rate assets (excluding used assets or cars) 

• However; to balance that, the “writing-down allowance” (the normal depreciation rate for main-pool assets) will be reduced from 18% to 14% per annum from April 2026. 

• The result: if you’re investing in new assets you can get a large upfront allowance but for longer-term depreciation, relief is less generous than before. 

Implication: Businesses planning capital expenditure (machinery, equipment, fit-outs) will now get more generous first-year tax relief useful for growth, expansion or reinvestment but should model long-term depreciation carefully when planning.

Business Rates & Commercial Property (Retail, Hospitality, Leisure — RHL)

• From April 2026, qualifying RHL properties with a rateable value below £500,000 will benefit from a permanently lower business-rates multiplier a cut financed by higher multipliers for large/high-value properties (rateable value £500,000+). 

• The new small-RHL multiplier will be set at 38.2p, compared with higher multipliers for large premises (standard and high-value multipliers at 43p and 50.8p, respectively). 

• This change is permanent and uncapped (i.e. no cash-cap on the relief) intended to support high-street shops, small hospitality or leisure venues, and smaller businesses rather than large warehouses or “big-box” commercial properties. 

Implication: If your business owns or rents smaller RHL-rateable premises, you may enjoy lower operating costs; a tax relief worth considering when projecting overheads. But if you operate or own large/commercial-rate properties, you may face higher business-rates bills.

If anything, the predictable environment improves confidence among both lenders and investors.

Personal Income / Dividend / Savings / Rental Income — What Changes Mean for Individuals & Landlords

• The Budget freezes income tax thresholds (personal allowance and bands) for an additional three years (until 2030/31). 

• From April 6, 2026, the tax on dividend income rises by 2 percentage points: basic-rate dividend tax becomes 10.75%, upper-rate 35.75%. 

• From April 6, 2027, tax rates on savings and property (rental) income will also increase by 2 percentage points (basic 22%, higher 42%, additional 47%). 

Implication: For directors, landlords, and self-employed people who rely on dividends, rental income, or savings the Budget raises the tax bill on these income streams. Combined with frozen income bands, “fiscal drag” may slowly push many into higher marginal rates even if nominal earnings don’t change.

What this means for business owners, landlords and self-employed

Where there is now opportunity

• If you’re investing in plant, machinery or business assets the new 40% FYA gives you a strong incentive to spend before 2026/27, reducing your tax bill sooner rather than later.

• Small retail / hospitality / leisure businesses occupying modest-sized premises (rateable value under £500k) benefit from lower business rates a lower-cost environment that can help cash flow, profitability, and potentially make expansion/renewal easier.

• The relative stability on headline corporation tax, combined with some targeted reliefs, gives businesses a more predictable environment to plan longer-term investment and growth.

Where the Budget raises the burden and risk

• Landlords, dividend-reliant business owners, and savers face higher taxes on non-salary income reducing net returns on property, dividend-based extraction, or savings interest.

• Businesses using large/high-value commercial properties may face increased business-rate bills due to higher multipliers especially if rateable value ≥ £500,000.

• The reduction in writing-down allowances (from 18% to 14%) means that while upfront investment gets relief, ongoing depreciation tax relief is reduced, which may affect long-term planning for asset-heavy firms.

• For SMEs planning growth or hiring: wage pressures (e.g. rising minimum wage) and other cost burdens (tax changes, inflation, potential interest rate environment) mean cash-flow planning must be tighter than before. 

Revised “What Should Business Owners Do Next” — Advice Based on 2025 Budget

If you run a business or advise business owners / landlords now is the time to:

• Review any planned capital expenditure for next 12–24 months. If you intend to buy new plant, machinery or equipment doing it early (post-Budget but before 2026/27) may deliver big tax savings thanks to the 40% FYA.

• Analyse property holdings: check the rateable values of any commercial premises. Smaller retail/hospitality/leisure premises may benefit but large or high-value ones may incur increased costs after April 2026.

• For pay-out strategies (dividends, rental income, savings interest): factor in higher effective tax rates; re-examine whether dividend-heavy extraction or passive rental income remains efficient for your personal/ business financial structure.

• Revisit cash flow forecasts, budgets and business plans accounting for likely cost increases (wages, taxes, rates) while planning any expansion, hiring, or asset investments carefully.

• Consider timing decisions (when to invest, when to borrow, when to extract profits) with the new allowances, reliefs and tax hikes in mind ideally with a broker or tax adviser who knows the new rules.

Final Takeaway The 2025 Autumn Budget is a Mixed Bag: Some Reliefs, Some Headaches

This Budget isn’t a “slam-dunk” for businesses and investors it’s a trade-off.

• There are opportunities especially for businesses investing in new assets or running smaller retail/ hospitality premises.

• But there are new costs and tax burdens, particularly affecting dividend-based income, property income, and larger commercial premises.

If you approach it with careful planning, a strategic mindset, and updated financial modeling you can still come out ahead. But ignoring the changes could mean paying more than you expect.

The 2025 Autumn Budget includes several changes that may affect business planning, borrowing options and financial decision-making. Every situation is different, and it’s important to understand how these changes relate to your own circumstances.

If you’d find it helpful, I’m offering a small number of free Budget Impact Review calls this week.

These sessions are purely informational and are designed to help you:

• Understand which Budget changes may be relevant to your business or property plans

• Clarify what lenders typically consider when assessing applications

• Explore your available finance options in a general, non-advised capacity

• Identify what documents and preparation can strengthen future applications

There is no obligation, and the conversation will not include personal recommendations unless a full fact-find is completed in line with FCA requirements.

Availability is limited to ensure each session is handled properly and compliantly.

👉 Click here to book your Budget Impact Review.

Kingston Finance Ltd is an Appointed Representative of Connect IFA Ltd. Finance is subject to status and affordability. Terms and conditions apply.