How could the Autumn Budget 2025 impact businesses?

The Autumn Budget 2025 is set to be announced on Wednesday 26 November.

With Chancellor Rachel Reeves under pressure to address a multi-billion pound deficit while avoiding direct tax rises on working people, the upcoming Budget is poised to introduce a series of changes that could have a significant impact on businesses across the UK.

This guide will break down what to expect from Reeves’ Autumn Budget, from potential tax reforms and spending plans to the likely impact, providing you with the insights you need to prepare your business for the changes ahead.

Table of contents
Date and time of the Autumn Budget 2025 What is the Autumn Budget and how does it work? A multi-billion pound deficit and the productivity puzzle What tax changes could affect your business? How could currency markets react to the Autumn Budget? How Wise Business can help FAQS on the Autumn Budget 2025

Get started with Wise Business🚀

Date and time of the Autumn Budget 2025

The government has confirmed that this year's Autumn Budget will be released on Wednesday 26 November.

The statement is typically delivered by the Chancellor of the Exchequer (in this case, Labour’s Rachel Reeves MP) at around 12:30 PM (UK time), immediately following Prime Minister’s Questions.

The chancellor typically delivers a speech standing up for an hour, to craft the government’s narrative around the Budget. After the speech, they sit down – at which point the full Budget document is published online.

The timing is significant, with some commentators suggesting the late November date could give the economy more time to recover from a period of sluggish growth.

What is the Autumn Budget and how does it work?

If you've heard about the Autumn Budget but aren't quite sure how it all fits together, here's a quick breakdown.

How it works	Description
What gets announced?	The Budget is when the chancellor sets out the government's tax and spending plans. This includes changes to business taxes, income tax, VAT, public spending, and fiscal policy for the year ahead.
When do the changes take effect?	Most tax changes announced in the November 2025 Budget will come into force from April 2026 – the start of the new financial year (2026-27). Some measures might be introduced immediately, while others could be phased in over several years. Once implemented, these changes typically remain in place indefinitely unless a future Budget reverses or modifies them.
The five-year forecast	Alongside the Budget, the Office for Budget Responsibility (OBR) produces a five-year economic forecast. This projects what will happen to the economy, tax revenues, and government spending from 2025-26 through to 2029-30. The OBR's forecast determines whether the government is on track to meet its financial commitments and helps Rachel Reeves decide how much room she has for tax cuts or spending increases.
Fiscal rules and the 2029-30 target	The government sets itself fiscal rules – specific targets for managing the nation's finances. Current rules require: day-to-day spending to be covered by tax revenues by 2029-30 and debt to fall as a share of the economy by 2029-30. If the OBR's forecast shows the government won't meet these targets, the chancellor must find ways to raise more revenue (through tax increases) or cut spending to balance the books.
Example of the Budget in action	Hypethetically, if Reeves announces corporation tax will increase to 27% in the Budget, this would typically apply from April 2026 onwards (and would continue indefinitely unless changed in a future Budget). The OBR then forecasts how much revenue this will raise each year from 2026-27 through 2029-30, helping determine if the government meets its fiscal rules by the 2029-30 deadline.
Why this matters to your business	The chancellor's room for manoeuvre – determined by the OBR forecast – directly influences whether your business faces tax rises, benefits from new reliefs, or operates in a higher or lower-growth environment.

Understanding how the Budget process works helps you anticipate what might be announced and prepare your business accordingly.

A multi-billion pound deficit and the productivity puzzle

At the heart of the Autumn Budget is a substantial financial challenge.

Estimates of the government's fiscal challenge vary widely, with forecasters suggesting it could be anywhere between £20bn and £30bn.

The National Institute of Economic and Social Research (NIESR) previously estimated the hole at £41.2 billion¹, while recent analysis from Goldman Sachs suggests it could reach £30bn².

This shortfall (the difference between the government’s total spending and its total income) could also be exacerbated by weaker predicted growth, rising debt interest payments and other spending commitments.

Chancellor Rachel Reeves has been explicit about her primary focus: to solve the UK's long-standing productivity puzzle³.

Productivity growth, or the measure of output per hour of work, has stalled for years, contributing to slow economic growth since the 2008 financial crisis.

The OBR forecast: a tough pill to swallow?

The pressure on Reeves rose in October 2025 after the Financial Times reported that the Office for Budget Responsibility (OBR) – the UK's independent economic forecaster – is set to downgrade its official productivity forecast by 0.3%, potentially increasing public sector net borrowing by £21 billion⁴.

With government borrowing already reaching multi-decade highs this year, the news is a tough pill to swallow for the chancellor.

However, Reeves has reasons to be optimistic.

As a counterbalance to its productivity downgrade, the OBR also provided an upward revision to its estimates of nominal GDP – essentially the amount of money the economy makes through output without adjusting for inflation.

This upward revision was likely driven by higher-than-expected inflation and rising wage growth, meaning more pounds flowing through the economy and resulting in more tax revenue – even if the "real" economy isn't actually growing faster.

Michael Saunders, adviser to the consultancy Oxford Economics, told the Financial Times that higher inflation and wage growth in 2025-26 could add roughly £9bn to the OBR’s tax revenue forecast in 2029-2030⁵.

This could rise as high as £20bn if the watchdog were to alter its predictions for wage growth in the later years of its forecast.

💡 Why higher inflation helps the chancellor

While productivity is falling, higher-than-expected inflation and wage growth mean more pounds flowing through the economy. Since the government collects taxes based on cash amounts (not inflation-adjusted figures), this generates more tax revenue – even if the economy isn't really growing faster in real terms. This "nominal GDP boost" could add £9-20bn to tax revenues by 2029-30, helping offset the damage from the productivity downgrade.

This could be a boost to Reeves and her initial mission of keeping tax hikes to a minimum and instead breaking the UK’s 'cycle of low growth'⁶ through investment and reform by:

1. Boosting investment: Allocating funds for large-scale infrastructure projects, such as the revival of the Northern Powerhouse Rail⁷ project, to improve transport links and the productive capacity of the economy.
2. Slashing red tape: Reshaping planning rules and reducing bureaucracy to speed up the delivery of major projects.

Despite this focus on growth, Westminster observers are predicting that tax rises and spending tweaks could be on the cards.

What tax changes could affect your business?

The chancellor has publicly confirmed she is "looking at tax and spending" to address the fiscal gap⁸.

Labour had originally pledged not to raise the rates of income tax, National Insurance, or VAT⁹, however, speculation is growing that no taxes are off the table with Reeves confirming in October that the Treasury is considering a 2p increase to income tax¹⁰.

Alongside these potential changes, commentators have suggested that businesses and high-value assets could be subject to new levies.

Changes to Business rates

Alongside tax, the Autumn Budget will include other policy changes like business rates that could directly influence your business outgoings and growth.

Here’s what your business could expect:

• Relief is changing: The Retail, Hospitality, and Leisure (RHL) relief continues to extend, however it’s dropping from 75% to 40%¹¹ for the next tax year, with a £110,000 cap. This means many small businesses will see a significant increase in their rates.
• Small business multiplier frozen: Rachel Reeves has promised to keep the small business rates multiplier at 44.9p.
• Standard multiplier up: The standard business rates multiplier increased to 55.5p in April 2025, impacting businesses not covered by the RHL relief.
• Long-term plan: The government is working on a long-term overhaul of the business rates system, with a new structure expected from 2026 that aims to support the high street by taxing large online warehouses more.
• Digitalisation ahead: The entire business rates system is set to be digitalised by 2028. This will require businesses to update property information in real-time under a new 'duty to notify,' starting from April 2026.
• The bottom line: These changes mean that it’s important to review cashflow, seek professional advice and prepare for potentially higher running costs in the future.

Potential VAT reforms

While the government is unlikely to change the headline Value Added Tax (VAT) rate (currently 20%), the Autumn Budget could include significant changes to its scope or application.

• VAT threshold – One of the most likely changes is lowering the VAT threshold, which would bring thousands of smaller businesses into the VAT system for the first time.
• Item reclassification – The government could reclassify certain goods and services, moving them from the zero-rated (0%) or reduced-rate (5%) categories to the standard rate (20%). This would increase tax revenue but could also have a knock-on effect on prices and consumer spending.
• Exempt services – Currently, services like financial services and education are exempt from VAT¹². The government could amend legislation to make some of these services no longer exempt, providing a new source of tax revenue.

Capital Gains Tax and Inheritance Tax

As an alternative to tax on income and other major sources, the government is reportedly considering taxes on large assets and transactions such as Capital Gains Tax (CGT) and Inheritance Tax (IHT).

• CGT – Possible changes could include aligning CGT rates with Income Tax rates, increasing the rates for specific high-value assets, or tweaking the conditions for 'Hold-Over Relief,’¹³ which allows assets to be gifted without paying CGT. In 2024’s Autumn Budget, the rate of CGT on Business Asset Disposal Relief (BADR) increased to 14% for disposals made on or after 6 April 2025 and 14% - 18% for disposals made on or after 6 April 2026¹⁴. Whether this changes in 2025 remains to be seen.
• IHT – A major area of speculation surrounds IHT. Advisers are already reporting¹⁵ that clients are looking into trusts and gifting to plan ahead. The government could tighten rules on gifting money and assets to raise revenue.

Other speculated taxes and levies

• Fuel Duty – Fuel duties have been frozen at 52.95 pence per litre since 2011-12¹⁶, including a temporary 5 pence cut introduced in 2022-23 which was subsequently extended to 2023-24, 2024-25 and 2025-26. Pressure has been building to scrap the freeze when the latest extension ends in 2026 and lift the levy relative to inflation. A significant rise could impact economic growth, while a small rise could provide a new revenue stream and have a softer impact on the economy.
• Banking: The government is considering new levies on banking to raise revenue. Some reports suggest a windfall tax on banks could raise up to £11 billion¹⁷.
• Gambling: Similarly to banking, potential government levies on gambling could be introduced to raise important funds. Former prime minister Gordon Brown urged Rachel Reeves to raise levies on gambling¹⁸ to cover the cost of lifting the two-child benefit cap.
• Wealth tax: Voices within the Labour party seem to be growing¹⁹ on the idea of a wealth tax targeting those in the UK with high-value assets. This tax could be levied on the total value of all assets owned by an individual above a certain threshold, like £5 or £10 million. However, the same enthusiasm for the idea isn’t shared across the party, so we might not see it in the Budget this autumn.
• Non-dom tax status: The government is pushing ahead with its abolition of the non-dom tax status, a move that is expected to raise billions. While there were initial fears of a 'non-dom exodus,' early data from HM Revenue & Customs suggests the number of departures is in line with official forecasts²⁰. This is a point of relief for the chancellor, but advisers to the wealthy still report significant departures.

This change is a significant consideration for founders with international investors. If many international investors were to leave the UK, businesses could see their pool of accessible capital shrink. With these investors now residing overseas, relationships become tougher to form and due diligence harder to conduct.

For these reasons, it's vital to stay on top of the latest developments and consider ways to streamline the process of receiving investment from overseas. With a Wise Business multi-currency account, you can receive funds in 18+ currencies at competitve rates, opening the door to international investors and saving you money.

Action you can take now

With significant changes on the horizon, being proactive can help you prepare your business for any potential impacts from the Autumn Budget.

Review your tax strategy

If you’re a business owner planning to sell assets or your company, now is the time to speak to your accountant.

Given the speculation around potential changes to CGT, the timing of such a sale could be crucial to your tax liability.

Similarly, if you are a sole trader, it's worth considering how an extended income tax threshold freeze²¹ could affect your personal tax burden as profits rise.

Plan for increased running costs

With business rates relief being scaled back for certain businesses and the standard multiplier set to increase, it’s wise to review your cash flow and operational costs now.

Plan for potentially higher outgoings from April 2026 and look for ways to improve efficiency to offset these costs, especially as Employer National Insurance Contributions²² and the minimum wage²³ have also recently increased.

Stay informed

The final details of the Autumn Budget will not be known until the chancellor speaks on 26 November.

In the interim, stay flexible and keep a close eye on further announcements and economic reports.

Understanding the changing landscape of VAT, business rates, and other potential levies will be key to making informed business decisions.

How could currency markets react to the Autumn Budget?

The Autumn Budget is a key date in the economic calendar with the potential to have a significant impact on businesses.

In the run up to Budget statements, currency markets typically price in certain changes to fiscal and economic policy based on their expectations of the announcement.

When reality differs from expectation, these markets can move drastically. If your business sends international payments, sharp swings in currency values can significantly disrupt your financial planning and your bottom line.

In 2022, Liz Truss and Kwasi Kwarteng’s mini-Budget defied market expectations causing the pound to fall to a 37-year low against the dollar²⁴. For businesses dealing with multiple currencies, this shift could have considerably impacted profit margins and disrupted cash flow.

As we await the details of the Autumn Budget, preparing your business for any potential impacts is crucial to ensure you don’t face significant losses.

How Wise Business can help

With a Wise Business account, your business can exchange, send, and receive currencies easily, quickly, and cheaply. You’ll always be offered the real exchange rate – the one you see on Google – with no hidden fees.

This means you can send money to clients, receive funds from overseas investors and exchange currencies all in one place – streamlining your cash flow and saving you money.

You can integrate your own accounting software – like Xero or QuickBooks – too.

Also, with potential volatility on the horizon, your business can capitalise on market movements through our Auto Conversion feature.

If you anticipate the pound rising or falling, you can set a target rate of exchange against another currency which, if met, will automatically be exchanged in your platform. You can achieve maximum value on your currency exchange without having to constantly keep track of market movements.

Open a Wise Business account today to keep control of your business finances ahead of the Autumn Budget.

Get started with Wise Business🚀

FAQS on the Autumn Budget 2025

Below are some of the frequently asked questions on this year’s Autumn Budget.

What is the Autumn Budget?

The Autumn Budget is a key financial and economic statement delivered by the UK government, typically in late October or early November.

It's the government's opportunity to set out its plans for taxation, public spending, and borrowing for the year ahead.

It's a significant event that provides an overview of the UK economy and outlines the government's fiscal strategy.

How does the Autumn Budget affect businesses?

The Autumn Budget can affect businesses in numerous ways, even if the government pledges not to raise major taxes like Income Tax or VAT.

While we don't know for sure what the upcoming Budget will contain, speculation currently suggests businesses could be affected by changes to business rates, amendments to the scope of VAT, or new levies on capital gains.

These changes can impact a business’s outgoings, cash flow, and overall financial planning.

What is likely to happen in the next Budget?

We don't know for certain what will happen in the Autumn Budget, but commentators are speculating that the government may look for alternative ways to raise revenue to address a significant fiscal deficit.

This could come in the form of changes to Capital Gains Tax (CGT), Inheritance Tax (IHT), the Value Added Tax (VAT) threshold, business rates or an end to the Fuel Duty freeze.

Westminster observers are also predicting that new levies on banking and gambling could be announced.

How will the Budget affect my small business?

The impact of the November Budget on your small business will depend on your sector and specific circumstances.

However, speculation suggests small businesses could be affected by changes to business rates relief, which is set to drop from 75% to 40% for the next tax year.

There is also the possibility of the government lowering the VAT threshold, which could bring more businesses into the VAT system for the first time.

To plan ahead, it's wise to review your cash flow and prepare for potentially higher running costs.

Will Labour change Business Asset Disposal Relief?

While the government has not made a formal announcement on Business Asset Disposal Relief (BADR), it is a key area of speculation.

As an alternative to raising major taxes, the government is reportedly considering changes to Capital Gains Tax (CGT). As BADR relates to CGT on the sale of business assets, it could be affected by potential changes.

---

Sources used:

1. Reeves and Starmer to prepare ground for tax rises in a difficult autumn budget | The Guardian
2. Goldman chief delivers warning to Reeves over bank tax hikes | Sky News
3. Reeves pledges to tackle productivity challenge at autumn budget | The Independent
4. Reeves faces £20bn hit to UK public finances from productivity downgrade | Financial Times
5. What could still swing the UK fiscal forecasts for Rachel Reeves? | Financial Times
6. In our first year Labour fixed the foundations – now we must build a stronger economy for a renewed Britain | The Guardian
7. Labour to revive Northern Powerhouse Rail project | The Guardian
8. Reeves admits she’s looking at tax rises and spending cuts in Budget | The Independent
9. Has the government kept its pledge not to increase taxes on ‘working people’? | Full Fact
10. Reeves eyes up 2p rise in income tax | The Telegraph
11. Business rates reform: Autumn Budget 2024 | Tax Adviser
12. VAT rates on different goods and services | Gov UK
13. Gift Hold-Over Relief | Gov UK
14. BADR | Gov UK
15. What might the Autumn 2025 Budget mean for small businesses? | Velocity Accounting
16. Fuel duties | OBR
17. Windfall tax on banks could raise £11 billion | Positive Money
18. UK's Reeves leaves door open to gambling tax rise in autumn budget | AJBell
19. Could a wealth tax work in the UK? A visual guide | The Guardian
20. UK tax data reportedly suggests claims of non-dom exodus overblown | The Guardian
21. Autumn Budget: inheritance tax and other possible changes | Fidelity
22. Employers’ National Insurance: How 2025 rise affects businesses and what do to now | Sage
23. The National Minimum Wage in 2025 | Low Pay Commission
24. Pound falls below $1.09 for first time since 1985 following mini-budget | The Guardian

Sources last checked: 30/10/2025