On Wednesday, 26th November, the Chancellor of the Exchequer delivered the 2025 Budget Statement in the House of Commons.
The 2025 Budget sets out a mix of changes that will shape the business landscape over the next few years. Here’s a quick, at-a-glance look at the key points businesses should know.
Growth and Inflation Forecasts
- The Office for Budget Responsibility (OBR) is predicting growth of 1.5% for this year, up from the 1% it predicted in March. After that, the forecast is for 1.4% next year and 1.5% every year thereafter until 2030, a downgrade from what was predicted in March. The chancellor says the Budget is part of a broader “growth strategy” to improve productivity and output.
- Inflation has increased from the predictions in March, coming in at 3.5%, compared with the original forecast of 3.2%, then 2.5% in 2026 (up from 2.1%). Thereafter, it is as you were, at 2% every year.
- OBR is reducing expectations for productivity growth by 0.3 percentage points to 1% by the end of the forecast.
Support & Incentives for Businesses, Entrepreneurs & Scale-ups
- The Budget introduces permanent lower business rates for over 750,000 retail, hospitality and leisure properties, worth nearly £900 million per year from April 2026.
- A £4.3 billion “business-rates support package” will help cap increases for firms hit hardest by recent revaluations (from April 2026).
- For fast-growing scale-up companies and entrepreneurs:
- The government is doubling eligibility for enterprise tax-incentive schemes (such as the Enterprise Investment Scheme – EIS )
- There is a new ‟UK Listing Relief”: a three-year exemption on stamp-duty-reserve-tax for newly listed firms, designed to encourage companies to go public in the UK rather than overseas.
- A £1 million Annual Investment Allowance remains available, preserving tax relief for firms investing in capital assets.
- The Budget affirms the headline corporate tax rate remains stable, the lowest in the G7, signalling continued competitiveness for firms.
Together, these measures are designed to make it more attractive for entrepreneurs and investors to start, grow or expand businesses in the UK.
Regulatory & Innovation-Focused Reforms
- The Budget solidifies the government’s Modern Industrial Strategy, targeting the eight growth-driving sectors (IS-8 sectors) and committing major support for them.
- R&D investment is set to grow, by 2029-30, annual public R&D investment will rise to £22.6 billion. Part of that is earmarked for innovative UK firms in the IS-8 sectors.
- The plan includes regulatory reform to reduce burdens on business: simplification of tax and customs processes, a more efficient regulatory landscape, and improved digital services from tax authorities.
High-Street, Local Business & Regional Economy Measures
- The lower business rates for retail/hospitality/leisure firms aim to significantly reduce costs for high-street businesses (shops, pubs, leisure venues), which will benefit local economies across the UK.
- The Budget renews support for film studios (one-year extension to 40% business-rates relief), helping creative industry businesses and associated supply chains.
- The government is creating new Business Rates Retention Zones (e.g. a 25-year zone for a fund tied to regeneration) to channel growth and investment to regions outside London, part of the broader “Northern Growth Corridor” focus.
Affects for Employees and the Workforce
- From April 2026, the hourly National Living Wage (for over-21s) goes up to £12.71/hr. Younger workers also receive increases.
- The Budget tightens “tax-efficiency” benefits for higher earners: for example, the relief on pension contributions via “salary sacrifice” will be capped, only the first £2,000 per year will be exempt from National Insurance concessions from 2029.
- On the investment-income side, the tax on dividends and savings income will rise (dividend and savings income taxed 2% higher from April 2026/2027), and the property-income tax is restructured (new property-income tax rates from April 2027).
- The Budget also includes broader labour-market / social policy provisions: more than £1.5 billion pledged for employment and skills support under a “Youth Guarantee and Growth & Skills Levy,” aiming to support younger workers and training/apprenticeship access.
- For employers: earlier changes (from 2025) mean higher employer-side taxes on pay, the increase in employers’ National Insurance (NICs) (from 13.8 % to 15 %, with a lower threshold for liability) remains relevant.
Comment from our CEO:
“We are disappointed to see the OBR highlight a drop in productivity, which remains a critical challenge for UK businesses. At the same time, Budget 2025 introduces a number of measures aimed at supporting growth and scaling businesses, particularly those adopting new technologies. We hope these initiatives will help improve productivity and drive long-term, sustainable growth across the economy.”