Categories
Autumn Budget 2025 Predictions for Business Finance
The Autumn Budget 2025 comes off the back of the first fall in inflation for several months, news that must buoy the Chancellor’s office even though it’s still well above the 2% Bank of England's target.
It is a budget that sees UK business leaders and market lenders cautious, delaying key investment decisions until Wednesday 26th November brings clarity.
Rachel Reeves has a difficult balancing act to perform, raising revenue to plug a £30bn to £50bn gap, while maintaining current stability and holding on to positive market trends.
At Clifton Private Finance, we work closely with specialist lending and business partners to help our clients gain a competitive edge and maintain growth, looking together at the forthcoming budget to anticipate and adapt to the changes on the horizon.
Exploring the Tax Landscape
Income Tax and National Insurance Contributions
The manifesto pledge to not rise income tax seems set to hold, despite some potential speculative wavering in recent months. However, it is extremely likely that the existing freeze on tax thresholds and personal tax allowances will remain in place, akin to a ‘stealth tax’ that affects millions as incomes rise.
For Reeves, extending the freeze as far as 2030 could raise much-needed billions in revenue without technically breaking any promises or incurring significant outcry - for many, holding tax thresholds doesn’t feel like a tax rise making the technique extremely effective.
Last year’s budget brought a rise to employer National Insurance Contributions (NIC). As has been seen, this has had a direct effect on businesses wage burden, stifling recruitment. It is unlikely that NIC would rise further, however, there is some speculation that the scope of NIC may be broadened, stretching to encompass partnerships/LLPs and income gained through property rental.
Dividend Tax
Aligning dividend tax rates to income tax is a strong contender for the upcoming budget. The Government has openly discussed the desire to have the tax burden shouldered more by high earners - targeting dividend tax rates that only impact business owners and shareholders meets this ‘broadest shoulders’ aesthetic.
Cutting the dividend tax allowance for high earners is considered likely, while increasing the rate or introducing a new upper band are also measures seen to have merit. These changes can easily be framed as a ‘fair’ tax increase that impacts the wealthy far more than the general public.
Capital Gains Tax
Many analysts see Capital Gains Tax (CGT) as a likely area for change, a move that would impact business acquisitions and succession planning. Business Asset Disposal Relief (BADR) which reduces the rate of CGT for entrepreneurs has consistently shrunk in recent years, with the effective CGT rate increased from 10% (pre-2025) to 18% (scheduled for April 2026). Further changes to BADR could continue.
VAT Threshold
Freezing, or even lowering, the current £90,000 threshold for VAT registration is another likely move by the Chancellor, creating another ‘stealth tax’ that will pull more SMEs and startups into full VAT compliance. Here, the burden on businesses is in the additional administrative and accounting costs, as well as a potential for short-term loss of business as on-paper rates for products and services increase.
The Impact on Business Borrowing
Pre-budget uncertainty has already affected the business funding landscape. Currently, business owners and CFOs are reticent to start new growth initiatives, holding out for clarity regarding the changes and how they will be affected.
Once the budget is made and management teams have the understanding they require, existing strategies can be properly adapted and appropriate finance solutions put in place.
Preparing for the Autumn Budget 2025
With less than a week until the budget is delivered, there is still plenty of time to put steps in place to position your business for the predicted changes ahead.
Many of the budget’s effects will take time to implement, with April 2026 the likely deadline for many of the new fiscal rules.
- Review dividend and salary structures for directors and shareholders - Consider bringing forward dividend payments to avoid additional taxes for high earners and business owners.
- Increase cash flow headroom ahead of potential payroll pressures - Evaluate salaries and employer NIC obligations with a view to increased overheads.
- Prepare for VAT commitments - If your business is close to the existing £90k threshold for VAT, prepare in advance for making the move to full VAT registration and implementation, potentially updating accounting systems.
- Evaluate asset sales and consider expediting planned business acquisition - Push forward plans for business sales ahead of anticipated CGT and BADR changes.
- Drive digital transformation and AI integration - Implement new AI-led efficient systems and digital-first accounting processes to keep your business at the forefront of your sector.
- Consider refinancing to reduce debt servicing costs - Speak today to Clifton Private Finance to develop a comprehensive plan for debt consolidation to smooth cash flow and improve capital liquidity.
Partnering with Clifton Private Finance to Maximise Budget Opportunities
Clifton Private Finance is here to work on your behalf to help grow your business. We can support you with a full spread of funding solutions, from rapid bridging finance that allows you to seize opportunities, to asset-based refinancing options that leverage existing equity to minimise costs.
Our business finance team will work closely with your top-level management personnel to develop thorough plans that see you smoothly through the next financial year, providing the capital needed to expand without constraint no matter what challenges the upcoming budget presents. Contact us today for a free expert consultation.
