What the November 2025 Budget Means for Your Business

The November 2025 Budget arrived with the usual fanfare about fiscal responsibility and economic growth.

But strip away the political messaging, and most business owners are left with the same question: how much more will this cost me?

Of course, the picture is mixed.

If you employ people, the frozen National Insurance thresholds will quietly eat into your margins for years to come. If you run a shop, restaurant, or pub, there’s some relief coming on business rates. If you’re an owner-manager who takes dividends, you’ll be paying more.

Here’s how the Autumn Budget will impact your business. 

Our Analysis

This is the second big tax-raising Budget in twelve months – £26 billion on top of last autumn’s £40 billion. Most of it doesn’t fully bite until 2029, which gives you time to plan.

• Hiring is getting more expensive: Every time you give someone a pay rise, you pay 15% extra on top in employer National Insurance. That threshold is frozen until 2031. Combined with minimum wage going up to £12.71, a full-time minimum wage worker costs you roughly £2,300 more per year than they did before last autumn.
• Paying yourself through dividends costs more from April 2026: If you’re a director who takes a low salary and tops up with dividends, your tax bill is going up by 2%. Not dramatic, but it continues the trend of making this approach less attractive.

If you’re trying to grow, there’s some help:

• The EMI scheme – which lets you offer tax-advantaged shares to key employees – now applies to companies with up to 500 staff, doubled from 250
• Investors putting money into early-stage businesses through EIS and VCTs get better tax breaks, which could make fundraising easier
• HMRC will check your R&D tax relief claim before you submit it, so you’ll know upfront whether it’s likely to be accepted

Overall, though, it’s hard to see this as a Budget for businesses. The growth incentives help a specific slice of companies – those raising investment, scaling quickly, or offering equity to staff.

For most business owners, the main story is rising employment costs and fewer ways to extract profits tax-efficiently.

The Employer National Insurance Freeze

No rates have changed here yet, but this might be the most expensive part of the Budget for employers.

The secondary threshold – the point at which you start paying National Insurance on each employee’s earnings – stays frozen at £5,000 until April 2031. The rate remains 15%.

Why does a freeze matter? Because wages don’t stay frozen.

Normally, this threshold rises each year roughly in line with earnings growth. When it doesn’t, but you’re giving staff pay rises to keep up with the cost of living, you end up paying NICs on an ever-larger slice of their salary.

Consider an employee on £30,000. You currently pay 15% on everything above £5,000 – that’s £3,750 a year. Give them a 4% rise to £31,200 and your NICs bill climbs to £3,930. That’s an extra £180, on top of the £1,200 pay rise itself. Now multiply that across ten employees, twenty, fifty. The numbers build quickly.

The Employment Allowance – now £10,500 – cushions the blow for smaller employers. If your total NICs bill falls under this amount, you pay nothing. But once you grow beyond it, every pay rise and every new hire costs more than you might assume when running the figures.

Dividend Tax: Another Squeeze on Owner-Managers

Company directors who pay themselves through dividends face a 2% tax increase from April 2026.

The ordinary rate rises from 8.75% to 10.75%. The upper rate goes from 33.75% to 35.75%. The additional rate stays put at 39.35%.

The Treasury’s reasoning is that income from dividends should be taxed more like wages. That argument glosses over the fact that dividends come from profits that have already been taxed at corporation tax rates – and that running a company involves rather more risk than collecting a salary.

In practical terms, a higher-rate taxpayer drawing £30,000 in dividends above their £500 allowance would pay £10,725 rather than £10,125. That’s £600 more per year.

Not catastrophic, but it continues the trend of making dividend extraction less attractive than other ways to get money out of your company.

If you’ve been putting off a conversation about the most tax-efficient way to structure your remuneration, this is probably the nudge to have it.

Minimum Wages Rising Again

From April 2026, the National Living Wage for workers aged 21 and over increases from £12.21 to £12.71 per hour – a 4.1% rise. For a full-time employee, that’s around £900 extra per year.

Younger workers see proportionally larger increases. The rate for 18 to 20-year-olds jumps 8.5% to £10.85 per hour, adding roughly £1,500 to annual earnings for someone working full-time. Apprentices and 16 to 17-year-olds move to £8 per hour.

The government’s longer-term ambition is to abolish the separate rate for 18 to 20-year-olds entirely and create a single adult minimum wage. That would represent a substantial further increase for employers who rely heavily on younger staff.

For businesses, this compounds the NICs problem. A minimum wage worker already costs more to employ than their headline hourly rate suggests – once you factor in employer NICs, pension contributions, and other on-costs, the true figure is considerably higher.

The Centre for Policy Studies calculated that last year’s Budget increased the cost of hiring a minimum wage worker by over £2,300 annually when employer NICs changes were included. This year’s wage increase adds to that burden.

Sectors with large numbers of minimum wage employees – retail, hospitality, social care, cleaning, security – will feel this most acutely. If you operate in these industries, you’re facing a double squeeze: higher wages and NICs on every hour worked.

Business Rates: Finally, Some Good News (for Some)

The government promised to rebalance business rates, and this Budget delivers – though with clear winners and losers.

• If you’re in retail, hospitality or leisure: Properties with rateable values under £500,000 will benefit from permanently lower multipliers from April 2026. Small business RHL rates drop to 38.2p, standard RHL to 43p. These are the lowest rates since 1990-91 and 2010-11, respectively. For a mid-sized restaurant or independent retailer, the savings could run to several thousand pounds a year.
• If you occupy high-value premises: A new multiplier of 50.8p applies to properties with rateable values of £500,000 or more – typically large distribution centres and warehouses. Only around 1% of properties fall into this bracket, but if yours is one of them, your rates bill is going up.

There’s also welcome news for growing businesses.

Previously, expanding into a second property meant losing Small Business Rates Relief on your original premises after just twelve months. That grace period has been extended to three years – a meaningful change if you’re testing new locations or scaling up cautiously.

Capital Allowances: Front-Loading Your Tax Relief

The main rate writing-down allowance – used to claim tax relief on equipment, vehicles and machinery over time – drops from 18% to 14% from April 2026.

But before you panic, there’s a counterweight. A new 40% first-year allowance for main rate assets takes effect from January 2026. This lets you claim a larger chunk of relief upfront rather than spreading it across several years.

The government’s intention is to encourage businesses to bring forward investment decisions. Whether that works depends on your cash flow and whether you were planning to invest anyway. If you’ve been putting off replacing equipment or vehicles, the timing might now favour acting sooner rather than later.

The 100% full expensing regime for qualifying plant and machinery remains in place. If you’re making substantial capital investments, this continues to offer immediate tax relief on the full cost.

Tax Reliefs Being Trimmed

Two existing reliefs are being scaled back:

• Employee Ownership Trusts: Business owners selling their company to an EOT currently pay no Capital Gains Tax on the disposal. From April 2026, that relief drops to 50%. If you’ve been considering this route as an exit strategy, the window for maximum tax efficiency is narrowing.
• Salary Sacrifice for Pensions: Currently, there’s no cap on pension contributions made through salary sacrifice that receive NICs relief. From April 2029, only the first £2,000 sacrificed per employee will be free of National Insurance. Anything above attracts NICs as normal.

This affects both employers and employees. If you offer generous salary sacrifice arrangements as part of your benefits package, the tax advantage diminishes for higher contributions. You might need to revisit how you structure pension offerings to staff.

Support for Growing Businesses

Several measures aim to help businesses scale up and attract investment.

• Enterprise Management Incentives expanded: The EMI scheme – which lets you offer tax-advantaged shares to employees – has been opened to larger companies. The employee limit rises from 250 to 500, making it accessible to more growing businesses trying to attract and retain talent.
• VCTs and EIS extended: Venture Capital Trusts and Enterprise Investment Schemes, which provide tax relief to investors backing early-stage companies, have been expanded with higher investment caps. If you’re seeking outside investment, this makes your company marginally more attractive to tax-motivated investors.
• R&D advance assurance: HMRC is piloting a service that checks R&D tax relief claims before submission. If you’ve been nervous about making a claim – or had one challenged in the past – this could reduce the uncertainty and cost of the process.

Other Changes Worth Knowing About

• Prompt payment requirements: Businesses bidding for government contracts worth over £5 million must now demonstrate they pay their own suppliers within 45 days. If government work is part of your revenue mix, your payment practices now affect your eligibility.
• Low-value imports: From March 2029, the duty exemption for overseas parcels valued at £135 or less will no longer apply. If you compete with foreign online sellers who’ve benefited from this loophole, the playing field levels slightly.
• E-invoicing mandatory: From April 2029, businesses must send VAT invoices to other businesses electronically. Paper invoices between businesses will no longer be valid. More detail is coming in 2026, but if your invoicing systems are antiquated, start thinking about upgrades.
• Electric vehicles: Full expensing on EVs and chargepoints continues until March 2027. New 100% business rates relief for EV chargepoints and electric-only forecourts lasts ten years. If you’re weighing up fleet electrification, the tax incentives remain strong.

What Businesses Should Do About the Autumn Budget

Several changes don’t bite until 2026, 2027, or even 2029, but remember they can be undone down the line. Rule of thumb is that you react to the changes coming in now or imminently. 

• Review your remuneration structure: With dividend tax rising and employer NICs thresholds frozen, the optimal balance between salary, dividends, and pension contributions may have shifted. This is especially true for owner-managers of smaller companie,s where you have flexibility in how you extract profits.
• Model your employment costs forward: If you’re planning to hire or give pay rises, factor in the frozen NICs threshold. Your true cost per employee is higher than the headline salary suggests, and the gap widens each year the freeze continues.
• Consider timing of capital investment: The new 40% first-year allowance from January 2026 might make it worth bringing forward equipment purchases. Conversely, if you were planning to buy before then, consider whether waiting a few months improves your tax position.
• Check your business rates situation: If you’re in retail, hospitality or leisure, confirm whether you qualify for the lower multipliers from April 2026. If you’re approaching the £500,000 rateable value threshold, understand what it would mean to cross it.
• Plan for the EOT relief reduction: If selling to an Employee Ownership Trust is on your radar as an exit route, act before April 2026 to preserve the full CGT exemption. After that, you’ll pay tax on half the gain.

How Double Point Can Help

Working out how these changes affect your specific business means looking at your structure, your sector, your growth plans, and your personal circumstances as an owner or director.

At Double Point, we help businesses understand what Budget changes mean for them in practice – and identify ways to structure their affairs efficiently before new rules take effect. 

Whether you need help with corporation tax planning, want to review how you’re paying yourself, or simply want to understand your options, book a free consultation with us today.

Our chartered accountants will take the time to understand your situation and give you clear, practical advice.