In her Budget speech, Rachel Reeves outlined several measures that will directly affect small businesses and business owners. Below is a clear summary of the main announcements:

Taxation & Thresholds

• Corporation Tax will remain frozen at 25% for the duration of this parliament.
• VAT thresholds are unchanged, offering no relief for inflationary pressures.
• Dividend, Savings and Property tax rates will each rise by 2p across all bands.
• Salary Sacrifice for pensions will be capped at £2,000, limiting tax-efficient contributions.
• Employee Ownership Trust (EOT) tax relief will be reduced to 50%.

Allowances & Savings

• Cash ISA limits will be reduced to £12,000 for individuals under 65 from April 2027.
• Student Loan repayment starting thresholds will remain frozen for a further three years.
• Personal Income Tax and National Insurance thresholds will remain frozen until 2030/31, pulling more earners into higher tax brackets over time.

Business Reliefs & Investment

• Writing Down Allowance on main-rate assets will reduce from 18% to 14% from April 2026, slowing tax relief on capital investment.
• Apprenticeship funding for under-25s will be enhanced, with the government committing to cover 100% of training costs.
• There will be a 40% allowance to allow businesses to write off more of their upfront investment costs.
• There will be permanently lowered business rates for 750,000 retail, hospitality, and leisure businesses details to be confirmed.

Wages & Employment

Minimum Wage increases:

• 18-20-year-olds: rising from £10.00 → £10.85
• 21+ workers: rising from £12.21 → £12.71

These increases will affect payroll costs from the next rate change in April 2026.

Transport, Imports & Other Measures

• A new 3p-per-mile road tax on electric vehicles from 2028.
• Fuel Duty remains frozen until September 2026.
• Customs Duty will apply on all imported parcels, regardless of value, increasing costs for small importers.

Economic Outlook

• Inflation forecast to fall to 3.5% in 2025 and 2.5% in 2026.

What This Means for Small Businesses

Overall, this Budget introduces further cost pressures for small businesses, from rising employment costs and reduced tax reliefs to increased import charges and frozen thresholds that accelerate fiscal drag. If you’d like to discuss how these changes may impact you or your business—and what planning opportunities are available—please get in touch.