The recent 2025 Autumn Budget brings a mix of relief and new costs. Many of which will affect UK small and medium-sized businesses. Here’s a quick rundown of the key changes and what you should look at now.
Key Impacts for SMEs
- Lower business rates for high-street retail, hospitality & leisure (RHL):
From April 2026, eligible RHL properties benefit from reduced business-rates multipliers — with the small business RHL multiplier set at 38.2p and standard at 43p. - General reduction in standard business-rates multipliers for many premises:
As part of the 2026 revaluation, the standard multiplier will drop from 55.5p to 48p, and the small business multiplier from 49.9p to 43.2p — which reduces the overall cost burden for many small businesses. - Rising wage-related costs:
From April 2026, the statutory living wage for over-21s increases to £12.71/hr, with pay rises also for younger staff and apprentices. - Support for capital investment remains – with opportunities:
The Budget retains favourable allowances for plant and machinery investment, meaning businesses planning expansion or upgrades may still benefit from tax-efficient investment write-offs.
What You Should Do
- Review your premises costs and business-rates liability, especially if you operate from retail, hospitality or leisure premises. Update your forecasts with the new multipliers.
- Update payroll forecasts and staffing budgets to reflect the upcoming minimum-wage rise; consider whether your pricing, margins or staffing structure need adjustment.
- If you plan capital expenditure (machinery, equipment, refurbishments), now might be a good time to act, so you can take advantage of current allowances.
- Revisit pricing, margins, and cashflow projections – higher wage costs and changes in overheads may influence your profitability.
- Think about long-term strategy: if you rely on dividends or passive income, changes to the overall tax and business environment may make reinvestment or operating expansion more attractive than passive income models.
A Bit More Context: Why the Mixed Outcome
The changes to business rates are among the most significant in years. The shift means over 750,000 retail, hospitality and leisure properties will pay lower rates under the new multipliers – the lowest RHL rates since the early 1990s and 2010s respectively.
However, the system is becoming more complex: from 2026 there will be up to five different rate “multipliers” depending on property type, size and rateable value. For larger premises (rateable value above £500,000), a “high-value” multiplier of 50.8p will apply.
Also, the revaluation (the update to property values used for calculating business rates) may increase a property’s “rateable value,” which could push some businesses into higher bills although the Budget includes a £3.2 billion transitional relief scheme designed to soften the impact for those facing sudden large increases.
Meanwhile, rising wage costs will hit businesses with staff especially in sectors dependent on lower-paid labour (retail, hospitality, services). For small firms with tight margins, that means careful budgeting, possible repricing or reconsidering cost structures.
Finally the retention of investment allowances and continued support for capital expenditure (machinery, equipment, upgrades) may offer a good opportunity for businesses looking to grow, modernise or increase efficiency.
Need help understanding what the Budget means for your business?
Every business will feel these changes differently from wage planning to business-rates calculations and long-term tax strategy. If you’d like personalised guidance or help reviewing your forecasts, our friendly Accountants247 Glasgow South team is here to support you.
Get in touch with us today at our Glasgow office to discuss how the 2025 Budget impacts your business and the best steps to take next.
