Autumn Budget: Key Business Changes
The Autumn Budget was somewhat of a mixed bag for businesses. On the one hand, the Chancellor made some significant moves to shore up the Government’s finances – the largest hike in employer national insurance contributions in recent memory being a prime example.
At the same time, the Budget also included some targeted support and relief for smaller firms. This notably included the expansion of the employment allowance, the NI discount available to eligible businesses.
EMPLOYER NATIONAL INSURANCE CONTRIBUTIONS
The most dramatic change for businesses in the Autumn Budget was the increase in employer NICs from 13.8% to 15% from April 2025. The Secondary Threshold will drop from £9,100 to £5,000.
Under the current system, employers pay 13.8% NICs on employee earnings above £9,100. From April 2025, they will pay a higher rate of 15% and start paying this on earnings above just £5,000 – meaning more of each employee’s salary will be subject to employer NICs.
To protect smaller businesses from these increases, the Government is reforming the employment allowance – a relief that essentially discounts their national insurance contributions.
The employment allowance increases from £5,000 to £10,500, and the previous £100,000 eligibility threshold for employment allowance has been removed.
According to Government predictions, the net effect of these changes means:
865,000 employers will pay no NICs at all next year.
More than 1 million employers will see no change or save money overall.
Larger employers will bear the brunt of NICs hikes, with projected revenues of £25bn a year.
BUSINESS RATES SUPPORT
The Autumn Budget made it clear that the Government is focused on providing relief and stability regarding business rates, especially for those in the retail, hospitality, and leisure sectors.
RETAIL, HOSPITALITY, AND LEISURE RELIEF
Business rates relief currently offers a 75% discount, capped at £110,000 until 1 April 2025. This has been extended but also cut to 40% for the 2025/26 tax year.
Dating back to 2020, the policy was introduced for the hospitality industry on the back of the temporary closures enforced during the Covid-19 pandemic.
THE SMALL BUSINESS MULTIPLIER FREEZE
The small business multiplier in England will be frozen at 49.9p for 2025/26, protecting over a million small properties from inflationary increases when combined with small business rates relief.
FUTURE MULTIPLIER CHANGES
Looking ahead, the Government plans to introduce permanently lower business rates multipliers for retail, hospitality and leisure properties from 2026/27, which will be funded by a higher multiplier for properties with rateable values above £500,000.
INVESTING IN GROWTH-DRIVING SECTORS
The Autumn Budget confirmed the Spring Budget’s long-term support for growth- driving sectors:
£975m over five years for the aerospace sector.
Over £2bn over five years for the automotive sector, focusing on zero- emission vehicle manufacturing.
Up to £520m for a new Life Sciences Innovative Manufacturing Fund.
Tax reliefs providing £15bn of support over the next five years for the creative industries.
ENCOURAGING BUSINESS INVESTMENT
The previous Government’s £1m annual investment allowance has been maintained, providing certainty for businesses looking to invest in their future growth.
The Government is also extending the 100% first-year allowances for zero- emission cars and electric vehicle charge points for another year, supporting the transition to cleaner transportation.
SUPPORTING SMALL BUSINESSES
The Autumn Budget confirmed several measures from the previous Spring Budget aimed at supporting small businesses, including:
Over £1bn across 2024/25 and 2025/26 for the British Business Bank to enhance access to finance for small businesses, including over £250m each year for small business loans programmes, such as Start Up Loans and the Growth Guarantee Scheme.
Over £200m for wider small business support, including continued funding for Growth Hubs and the Help to Grow Management scheme.
The Made Smarter Adoption programme, which helps small manufacturing businesses adopt advanced digital technologies, will see its funding double to £16m in 2025/26.
PROMPT PAYMENT PRACTICES
From 1 October 2025, the Government
will exclude companies bidding for contracts worth over £5m a year from the procurement process if they don’t pay their suppliers within an average of 45 days.
RESEARCH AND DEVELOPMENT INVESTMENT
The Autumn Budget emphasised the importance of research and development (R&D) in driving innovation and economic growth:
£20.4bn allocated for R&D investment in 2025/26, including at least £6.1bn for core research.
£25m in 2025/26 for a new multi-year R&D Missions Programme.
Real-terms increase in funding for the National Institute for Health and Care Research.
At least £40m over five years to support the commercialisation of university research through spin-out proof-of-concept funding.
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Download a full copy of the report here.