The Autumn Budget sets out new tax and wage measures that will raise costs for many businesses, while offering targeted relief for sectors such as retail, hospitality, leisure, and creative industries. Firms should prepare for higher payroll and dividend costs but explore opportunities in rates relief and investment incentives.
What are the key changes affecting businesses?
- Business Rates: From April 2026, there will be permanent lower business rates for retail, hospitality and leisure sectors. Simultaneously, there will be higher rates for properties with a rateable value over £500,000. The government has announced a support package of £4.3bn for businesses affected by the revaluations.
- Employment costs: From April 2026, the National Living Wage (NLW) increases to 12.71ph, while the Real Living wage (RLW) increases to£14.80ph in London, and £13.45ph for the rest of the country. The employer’s National Insurance Contributions (NIC) thresholds remains frozen, raising effective costs.
- Taxation: Corporation tax remains at 25%. Dividend tax rates will rise from April 2026 (basic rate of 10.75%, while the higher rate caps at 35.75%). The Income tax thresholds are frozen until 2030/31, pulling more earners into higher bands. If your business owns a new property, surcharge will apply on assets worth over £2m.
- Salary Sacrifice Schemes: From April 2029, salary-sacrifice pension contributions above £2000 will lose National Insurance exemption.