On Wednesday 26 November 2025, Chancellor Rachel Reeves will deliver the Autumn Budget alongside fresh economic and fiscal forecasts from the Office for Budget Responsibility. It will be a key moment for business owners, not just because it sets tax and spending for the year ahead, but because it signals how the new government intends to balance growth, stability and higher tax receipts over the rest of this Parliament. (PwC)
In this article we look at what commentators are predicting, where the speculation is most credible, and what the potential implications could be for UK businesses and their owners. It is all based on what has been published so far, so it should be treated as informed guidance, not as fact.
Why this Budget matters so much
Reeves has framed this Budget as part of a drive to fix an economy she describes as “not working well enough for working people” and to restore economic security. (GOV.UK)
Several factors explain why advisers are watching this one so closely.
- Her first Budget in autumn 2024 raised taxes by around £40 billion a year, largely through freezes and restrictions rather than headline rate hikes. (Fidelity International)
- Independent commentators estimate a remaining fiscal gap of roughly £20 billion to £40 billion, depending on the OBR’s updated forecasts and the cost of commitments already made in the 2025 Spending Review. (RSM UK)
- Reeves has already signalled that “harder choices” lie ahead and that higher taxes on wealthier individuals will be “part of the story”. (MoneyWeek)
Put simply, the Budget has to do three things at once: reassure the bond markets, fund spending promises and avoid choking off growth. That is why many analysts have dubbed it an “uncertainty Budget”. (RSM UK)
Where might the extra tax come from?
There is broad agreement among think tanks that further tax rises are very likely, even if the exact mix is still unclear. The Institute for Fiscal Studies and the Institute for Government have both argued that raising serious revenue usually requires broad based taxes that affect large numbers of people, rather than narrow niche measures. That tends to point towards income tax, National Insurance and VAT, even though Labour’s manifesto originally pledged not to raise the main rates. (Institute for Fiscal Studies)
At the same time, several commentators expect a focus on what one firm has called “stealth and wealth” taxes. In other words, measures that mainly affect higher earners and owners of capital, and changes that raise more over time without an obvious headline rate rise. (Bishop Fleming)
For business owners, that combination matters. You are exposed both as a taxpayer in your own right and as someone responsible for staff costs, investment and business structure.
The key areas of speculation are set out below. None of these are guaranteed, but they are plausible enough that they are worth thinking about now.
Income tax and National Insurance
Several newspapers have reported that Reeves is at least considering breaking the manifesto pledge on income tax. A recent analysis in The Guardian set out some of the options, ranging from increasing the basic, higher or additional rates, to cutting or freezing thresholds further so more people drift into higher bands. (The Guardian)
Instead of, or in addition to, rate rises there could be:
- A further extension of the freeze to the personal allowance and higher rate threshold beyond current plans
- Adjustments to the point at which the 45 per cent additional rate starts
- More interaction between National Insurance and income tax to close perceived gaps
There is also a more technical, but important, rumour for those trading through partnerships or LLPs. Wealth manager Saltus has highlighted speculation that the Chancellor could remove the current exemption from employer National Insurance on partnership profit shares. At the moment partners pay income tax and personal NIC on profits, but there is no employer NIC charge. (Saltus)
If anything like that did happen, it would materially increase the tax cost of partnership structures where profit shares are high or headcount is large. Firms in professional services and similar sectors would feel that most keenly.
From a planning point of view, it is too early to restructure just on the back of rumours. However, it is sensible for partnership businesses to run some “what if” numbers on employer NIC exposure and have a sense of the break even point between partnership and company structures.
National Minimum Wage: what businesses should prepare for
The Autumn Budget will also confirm the National Minimum Wage and National Living Wage rates that will apply from April 2026. Recent upratings have been sizeable, and early commentary from labour market analysts suggests further increases are likely as the government continues to prioritise pay growth at the lower end of the market.
For business owners this means preparing for higher payroll costs, potential adjustments to pricing, and more considered recruitment decisions. Even if the final rate is not as steep as previous rises, the direction of travel is clear, so it is sensible to model the impact on wage bills and margins ahead of the announcement.
Corporation tax and capital allowances
During Labour’s time in opposition, Reeves promised to cap the main rate of corporation tax at 25 per cent and to retain the full expensing regime for qualifying capital investment. Business commentators expect her to reiterate these points as part of a “stability” offer to investors. (Opus Business Advisory Group)
That does not mean corporation tax is safe from change. Analysts have suggested a number of possible levers that could raise additional revenue without touching the headline rate, for example:
- Tightening rules on loss relief or interest deductibility for larger companies
- Restricting or targeting generous reliefs such as R&D tax credits
- Sector specific measures focused on energy, financial services or technology
For owner managed businesses, the most important message is that the system of full expensing for plant and machinery looks likely to survive, even if eligibility may change at the margins. If your business has significant capital expenditure planned, you may want to keep an eye on any hints from the Treasury in the days before the Budget, but it is unwise to put commercially sensible investment on hold solely in anticipation of a change that may not come.
Business rates and property taxes
Labour has spoken for some time about replacing the current business rates regime with something more growth friendly, although detailed proposals have been limited. Pre Budget commentary from several firms suggests we might see at least a roadmap for reform, even if a full replacement takes years to design. (Dains)
Practical possibilities include:
- Temporary or targeted reliefs for certain sectors or regions
- More frequent revaluations to reduce “cliff edge” jumps
- Incentives for energy efficient upgrades and green investment
There is also ongoing speculation around stamp duty land tax and the housing market. Commentators in the property sector have asked whether Reeves might cut or restructure stamp duty to unlock transactions, particularly for first time buyers and downsizers. (Morningstar)
For businesses that own or rent commercial property, the immediate impact is likely to remain centred on business rates rather than stamp duty. However, any move that changes residential market activity can also feed through into construction, trades and local service businesses.
Wealth taxes, capital gains and inheritance tax
Many of the higher profile predictions relate to wealth rather than income. Several pieces in the financial press talk about a Budget that leans towards “taxing wealth more, work less”, although the exact policy mix is far from agreed. (MoneyWeek)
The main areas of speculation are:
Capital gains tax (CGT)
Commentators have suggested a number of options, including raising CGT rates on higher band taxpayers, narrowing the gap between CGT and income tax rates, or tightening Business Asset Disposal Relief (the former Entrepreneurs’ Relief). Any of these would alter the after tax proceeds from selling a company, a property portfolio or a substantial shareholding. (Bishop Fleming)
For business owners who are already in late stage sale or succession planning, this is one of the few areas where timing can genuinely matter. That said, rushing a sale purely to “beat” a possible CGT change can be risky and may destroy value if the business is not ready.
Inheritance tax (IHT)
There has been recurring discussion of changes to inheritance tax, especially reliefs such as Business Relief and Agricultural Relief, which can shield significant value from IHT where conditions are met. Some commentators expect restrictions or tighter conditions rather than outright abolition of these reliefs. (Forbes)
If your personal financial plan relies heavily on these reliefs, it is worth reviewing the structure with an eye on how robust it would be to tighter legislation, for example more active ownership tests or longer minimum holding periods.
Pensions and tax relief
Every Budget brings rumours of reforms to pension tax relief. This year, Sky has highlighted one idea that has been floated repeatedly by the IFS and others: moving to a flat rate of pension tax relief for all taxpayers, potentially around 30 per cent, instead of the current system where higher and additional rate taxpayers receive more relief. (Sky News)
For business owners, pension contributions are often a key part of extracting profits tax efficiently, so any move in this direction would change the trade off between salary, dividends and employer pension payments.
Spending, growth and the wider business environment
The 2025 Spending Review already set out plans to invest in what the government calls Britain’s “renewal”, including additional money for defence, the NHS and targeted economic programmes. (GOV.UK)
Commentators expect the Budget to build on that with measures intended to support growth, such as:
- Funding for infrastructure and housing delivery
- Support for green and digital investment
- Skills programmes and apprenticeships
The challenge, as many analysts have noted, is that these commitments already eat into the limited fiscal headroom. That increases the pressure for tax rises elsewhere. (RSM UK)
From a business perspective, the detail matters less than the direction of travel. A Budget that is seen as credible by markets and focused on long term growth should help keep borrowing costs under control and support a more stable operating environment, even if it feels painful in tax terms.
What could this mean in practice for different types of business owner?
Every business and every owner is different, but some of the broad implications that might follow from the themes above are:
Owner managed companies
- Higher personal taxes on dividends, salary or gains on exit would increase the value of early planning around remuneration strategy and long term succession.
- If full expensing and a stable corporation tax rate are confirmed, there is a stronger case for using the company as the main investment vehicle for plant and machinery, rather than funding those assets personally.
- Pension and ISA allowances are likely to become even more important tools in protecting long term wealth from higher future tax rates.
Partnerships and LLPs
- Any move towards employer NIC on partner profit shares would increase the effective tax burden and may raise questions about whether partnership or corporate structures are optimal.
- Professional firms in particular will want to model the impact across their partner group and consider how profit share arrangements might need to adapt.
Employers with significant payroll
- If income tax or NIC rates rise, employers may face upward pressure on salaries simply to keep staff at the same level of take home pay.
- At the same time, some Budget measures may be targeted at supporting investment in skills, apprenticeships or energy efficiency, which could create new incentives if you are ready to make use of them.
Property rich businesses and landlords
- Changes to business rates, CGT and IHT could all alter the economics of holding property in different structures.
- Those with large or long term property portfolios should keep a close eye on the interaction between CGT, stamp duty, business rates and inheritance tax reliefs.
None of this means you should make drastic changes before the Budget itself. It simply highlights the areas where being prepared will make you more agile once the actual numbers are announced.
Practical steps to take before 26 November
Even in the face of uncertainty, there are sensible steps business owners can take now.
- Update your forecasts and cash flow
Run scenarios that model modest increases in income tax, NIC and possibly employer NIC, as well as small changes in your total tax bill. This gives you a feel for how robust your plans are if the cost of employment or extraction of profits rises.
- Review your remuneration mix
Sense check how you currently balance salary, dividends, bonuses, benefits and pensions. You do not need to change anything yet, but it is useful to know where you have flexibility so that you can respond quickly if the Budget alters the relative attractiveness of each route.
- Check your investment pipeline
Make a list of significant planned capital expenditure, business acquisitions or disposals that are realistically on the table. For each one, think about whether the timing is driven mainly by commercial needs or tax speculation. Ideally, tax should support your commercial decisions rather than drive them.
- Get your records and structures in order
Budgets often come with tighter compliance and reporting requirements for companies and individuals seen as higher risk. Strong financial records, clear group structures and up to date legal documentation make it easier to adapt to new rules without firefighting.
- Stay informed, but sceptical
Pre Budget headlines can be contradictory. One day there is talk of a “tax raid”, the next of reliefs and incentives. Treat all of it as a useful background, not something to act on rashly.
We cannot predict exactly what Rachel Reeves will announce on 26 November. But by understanding the most credible areas of change and preparing, you can turn uncertainty into an opportunity to sharpen your plans and keep your business moving towards the future you want.
If you would like to make sure your finances are in the best shape to handle whatever comes out of the red box, please get in touch with the team.