Budgets of recent years have garnered far more attention in recent years than in the past, especially from those of us in the fortunate position of owning our own business. Just as usual, the Chancellor of the Exchequer holds a red briefcase aloft outside No. 11 Downing Street, before announcing how she’ll be making and spending the money in the government purse for the entire country for the next few years. It’s usually quite a long speech with a lot to get through, and it can be a challenge to follow with some of the shouting going on in the House of Commons.
Fear not, though, dear business owners. We’ve made it our duty to sit and watch budgets while taking notes, and picking out anything relevant to the SMEs that make this country tick. So here we go, without further ado, the business-based bullet points we picked up on from Rachel Reeves’ maiden budget as Chancellor.
Investment into HMRC
This wasn’t a direct mention of businesses, but definitely worth picking up on. The Chancellor announced a commitment to funding the modernisation of HMRC systems, and increasing the number of staff. She also mentioned increasing the interest on unpaid debt so that more people pay in a timely manner, and ‘going after’ promoters of tax avoidance schemes.
Better protections for workers
Reeves announced a focus on protecting workers against unfair dismissal and safeguarding against workplace bullying, as well as providing funding for better access to maternity and paternity leave.
Also, in line with recommendations from the Low Pay Commission, the government will be increasing the National Living Wage by 6.7%, taking it to £12.21 per hour. They will also begin working towards a single adult rate, by increasing the National Living Wage for 18-20 year olds to £10 per hour, to start with.
Fuel duty
For those with businesses involving a lot of road travel, you’ll be pleased to know that you won’t see a rise at the pumps. Fuel duty has been frozen for another year.
Electric vehicles
The Chancellor announced her desire to support the take up of electric vehicles. She announced that the Government will maintain incentives for electric vehicles in company car tax to encourage business uptake of using electric vehicles.
They will also increase the differential between fully electric and other vehicles in first year rates of Vehicle Excise Duty from April 2025. From April 1st 2025, they will freeze the lowest First Year Rate (FYR) paid by zero-emissions cars to 2029/2030, and they’ll increase FYRs for all other emission bands from 2025/2026.
There will also be an extension to 100% first year allowances for electric vehicles and their charge points for at least another year.
This is all part of a wider government plan to phase out vehicles running solely on internal combustion engines by 2030, and will be of particular interest to businesses with fleets!
High street businesses
High street businesses also had a couple of direct mentions throughout the budget.
Business rates
From 2026/2027 there will be two permanently lower tax rates for retail hospitality and leisure properties. Paid for by a higher multiplier for most valuable properties. There will be a 40% relief on business rates for retail, leisure and hospitality in 2025/6 up to a cap of £110,000 per business.
The small business tax multiplier will be frozen at 49.9p next year.
Tackling shoplifting
The Chancellor announced she’s looking to scrap effective immunity in low value shoplifting, providing additional funding to crack down on organised gangs, as well as providing more training for police and retailers to clamp down on it.
Corporation tax
Corporation tax will remain unchanged, and stay at 25% for the duration of this current parliament. They will maintain full expensing and £1,000,000 investment allowance, while also maintaining research and development relief.
National Insurance contributions
There will be an increase in employers NI contributions by 1.2 % points. This will be 15% from April 2025. The Chancellor also announced a reduced secondary threshold when businesses start paying from £9100/year currently to £5000 pounds.
There are some more appealing elements to mention…
Employment allowance
The government will be increasing employment allowance from £5000 to £10500. This means that 865,000 employers wont pay any NI at all next year. Over 1,000,000 will pay the same or less than they did previously. This measure gives small businesses opportunity to employ 4 people on National Living Wage without having to pay NI contributions.
Personal tax thresholds
There will be no extension on the income tax and NI threshold freeze announced by the previous government. From 2028/2029, personal tax thresholds will be uprated in line with inflation once again.
Broadband and mobile coverage
£500 million in funding has been allocated to continue driving progress in improving reliable and fast broadband and mobile coverage across country including in rural areas.
Phew, that was a lot to get through. If you’d like to see what the Chancellor laid out in more detail, you can have a look at the government website for their full autumn budget in their own words.
Further Reading: What impact will Labour have on business and technology?
