UK Autumn Budget 2025: What corporate clients need to know

The Chancellor’s Autumn Budget 2025 sets a clear course: protecting investment, tightening the fiscal framework, and modernising the tax, and regulatory system.

For corporate clients, the Budget offers new incentives to scale and invest, alongside a stronger compliance environment and targeted relief for high-street sectors. Below is a look at the key policy changes most likely to shape corporate decision‑making over the next 12 to 36 months.

Capital investment and corporation tax reliefs

The government is retaining the 25% main rate and full expensing for qualifying plant and machinery.  From 1 January 2026, a new 40% first‑year allowance for main‑rate assets will be introduced, while the standard writing‑down allowance on main‑rate pools falls from 18% to 14% from April 2026. Cars, second‑hand assets, and certain leased assets are excluded from the new first‑year allowance.

Businesses should consider reviewing their capital expenditure plans for 2026–27, to take advantage of the 40% first-year allowance and full expensing where these can most efficiently reduce taxable profits.

With these changes, the classification and timing of asset purchases will become more important. Early engagement with advisers on asset pooling, leasing structures, and excluded asset classes is recommended.

Scaling incentives: EMI, EIS/VCT, and listings

To help companies ‘start, scale, and stay’ in the UK, the Enterprise Management Incentives (EMI) scheme will be expanded from April 2026, with higher employee and asset thresholds, larger option limits, an extended holding period, and reduced administrative burdens.

Venture Capital Trust (VCT) and Enterprise Investment Scheme (EIS) company limits will also increase (with a reduction of upfront VCT income tax relief to 20%).

Additionally, a new UK Listing Relief grants a three‑year Stamp Duty Reserve Tax (SDRT) exemption on transfers after a UK listing. This relief is to take effect from tomorrow (27 November 2025) and is justified in the Budget to ensure UK capital markets competitiveness.

Business rates and high‑street support

From April 2026, permanently lower multipliers for eligible retail, hospitality and leisure properties will be introduced, coupled with a redesigned transitional relief scheme and limited “high‑value” multipliers for the top 1% of properties.

The government has announced measures to facilitate business expansion and growth, including an extension of Small Business Relief by a further two years for businesses acquiring a second property. In addition, it is progressing with broader business rates reform, having launched a call for evidence to identify and address obstacles to investment.

Owner‑managers and private company succession

Dividend tax rates rise by two percentage points at the ordinary and upper rates from April 2026. From 6 April 2027, distinct (higher) income tax rates will be created in respect of property income.

Additionally, salary sacrifice National Insurance Contribution relief on pension contributions will be capped at £2,000 per employee from April 2029.

Many owner-managers may wish to review their remuneration strategies including salary, bonus, dividend, and pension contributions to ensure they make the most of the upcoming changes.

Critically, capital gains tax relief on qualifying disposals to Employee Ownership Trusts (EOTs) is cut from 100% to 50% with immediate effect. Boards should consider reassessing any planned Employee Ownership Trust (EOT) transactions and compare alternative exit routes, such as staged management buy-outs or third-party sales.

Compliance, digitisation and HMRC enforcement

From April 2026, there will be increased late‑filing penalties for corporation tax. All VAT invoices must be issued electronically from April 2029 and HMRC is boosting anti‑evasion capability whilst consulting on a new “recklessness” offence for direct taxes.

Businesses should budget for compliance system upgrades where e‑invoicing will require new or upgraded finance systems.

Employment & Workforce Measures

Whilst the Income Tax and National Insurance thresholds have been frozen for a further three years from 2028, the National Living Wage is rising to £12.71/hour from April 2026, affecting 2.4 million workers.

The Budget also announces over £1.5 billion will be allocated for training and apprenticeships with SMEs benefiting from fully funded apprenticeships for under 25s.

Ulitmately, businesses should consider whether their labour costs will increase and budget for this.  They could also explore apprenticeship funding to offset costs.

ESG & Sustainability Commitments

From April 2028, a new Electric Vehicle Excise Duty (eVED) will be introduced, representing a mileage-based charge for electric and plug-in hybrid vehicles. This duty will be payable by drivers in addition to the existing Vehicle Excise Duty (VED), with an anticipated annual cost of approximately £240 per electric vehicle. The government has also confirmed that changes to the benefit-in-kind regime for Employee Car Ownership Schemes will be postponed until April 2030. For employees and businesses with existing contracts at that point, transitional measures will be implemented to offer further support.

Businesses that have invested in electric vehicles should review their vehicle policies, consider the long term cost implications of these measures, and monitor forthcoming details on transitional support.

The direction of travel is clear: the government wants firms to invest, scale, and list in the UK, while tightening compliance and modernising tax administration. Businesses that act early on investment timing, remuneration, digital compliance, and succession planning will be best placed to benefit and minimise additional costs.

If the 2025 Autumn Budget potentially affects your business, particularly your succession and exit planning, please get in touch with our Corporate team on 0113 207 0000.

*Blacks Solicitors does not provide financial advice, and the content of this blog post is for informational purposes only.