Autumn Budget 2025: How It Impacts SMEs – Your Essential Guide from RJ Financial

27 Nov

The Chancellor of the Exchequer, Rachel Reeves, delivered the Autumn Budget 2025 earlier today (26 November), with a razor-sharp focus on plugging a £22 billion financial hole, cutting national debt, and gripping the cost of living. While direct SME relief is modest, there are targeted wins in skills, investment, and rates—balanced by wage and tax pressures.

At RJ Financial, we specialise in supporting SMEs like yours through these changes. Here's a round-up of the key points, with practical impacts and next steps. Download our free Budget checklist to see how this affects your business.

Taxes, Pensions, and Savings

NICs and Income Tax: Thresholds frozen until 2027/28 and extended for three more years—fiscal drag means more SMEs and employees pushed into higher bands, potentially adding £500–£1,000 per staff member in tax.SME Tip: Review payroll now to avoid surprises.
Salary Sacrifice Schemes: Tax-free pension contributions capped at £2,000 from April 2029—limits flexibility for employee benefits. Impact: Could raise admin costs; explore alternatives like enhanced pensions.
Living/Minimum Wage: National Living Wage up 4.1% to £12.71/hour (April 2026); National Minimum Wage for 18–20s up 8.5% to £10.85/hour. SME Cost: ~£1,200 extra per full-time minimum-wage worker—factor into pricing and recruitment.
EOTs and Business Sales: CGT relief on sales to Employee Ownership Trusts reduced to 50% (from 100%, effective 26 Nov 2025). Opportunity: Still viable for succession planning, but costs rise—chat to us about BADR alternatives.
UK Listings Relief: Three-year stamp duty holiday for new UK stock market listings (from 27 Nov 2025)—boosts fundraising for growing SMEs.
Dividends, Property, and Savings Income: Rates up by 2 percentage points from April 2026 (e.g., basic dividend tax to 10.75%). SME Hit: Director shareholders face £200–£500 extra on typical £20k payouts; property investors see similar on rental profits.Action: Optimise salary/dividend mixes—book a free tax review.

ChangeSME ImpactEstimated Cost/SavingWage RisesHigher payroll (~5–8%)+£1,000–£2,000 per employee/yearDividend Tax HikeReduced take-home for owners+1–2% on extractionsThreshold FreezeMore tax from pay rises+£500/staff via fiscal drag

Investment

Apprenticeships: Fully funded for under-25s (up from 22)—a major win for SMEs, removing co-funding barriers and supporting skills gaps.Tip: Apply via Apprenticeship Levy portal; we can help with compliance.

Travel

Fuel Duty: 5p cut extended to August 2026, then gradual phase-out—eases logistics costs short-term.
Electric Vehicles: New Vehicle Excise Duty from April 2028: 3p/mile for EVs, 1.5p for plug-in hybrids. Impact: Levels playing field but adds £200–£400/year for high-mileage fleets.

Sectors

Gambling: Remote Gaming Duty to 40% (from 21%, April 2026); Online Betting Duty to 25% (from 15%, April 2027); Bingo Duty abolished. Relevance: Affects betting-adjacent SMEs—monitor for supply chain ripples.
Manufacturing: Electricity prices cut via new support scheme (details 2026)—targets energy-intensive SMEs for 10–15% savings.
Drinks: Soft Drinks Industry Levy extended to milk-based sugary drinks (January 2028)—impacts food/beverage SMEs; reformulate to avoid hikes.

Other

Mansion Tax: Council tax surcharge from April 2028: £2,500/year for £2m+ homes, £7,500 for £5m+—minimal direct SME hit, but watch property costs.
Director Fraud: HMRC gains powers to target avoidance promoters and fraud—stricter audits ahead. Advice: Ensure compliant schemes; our audits protect you.

What Does the Autumn Budget Mean for Your SME Clients?

The Budget offers little immediate relief for cash-strapped SMEs amid rising wages and taxes, but positives like free apprenticeships, listings incentives, and rates tweaks (e.g., business rates cuts for 750,000 retail/hospitality sites, funded by high-value hikes) give a fighting chance against economic headwinds. Overall, it's a "hold steady" statement—growth at 1.5% forecast, but tax as % of GDP hits 37.5%.

At RJ Financial, we're here to turn challenges into opportunities. Contact us today for a personalised impact assessment—email accounts@rjfinance.co.uk or call 07917 756865. Let's safeguard your 2026/27 finances.

Sources: HM Treasury Budget 2025; OBR Economic Outlook Nov 2025; Saffery & KPMG analyses.

Robert Jones