What this budget really means for your business

The Bottom Line: Your costs are going up, and there's less tax relief to help soften the blow. We go into the how and why below….

• Your wage bill is about to jump

  From April 2026, you'll be paying more for staff:

  • If you employ people on minimum wage (21+), their hourly rate goes up from £12.21 to £12.71. That’s 50p extra an hour. 

  • Younger workers (18-20) get an even bigger jump – up by 8.5% to £10.85 an hour

  • Under 18s and apprentices go from £7.55 to £8.00

  This is part of the government’s commitment to establish a single adult rate for minimum wage.

  Plus, Employment Tax thresholds, e.g. National Insurance and Income tax, are frozen until 2031. This means as wages naturally rise, more of your employees' money gets taxed at higher rates. They'll feel the pinch, which often leads to pressure for pay rises beyond the legal minimum.

• Income from property and dividends is going up by 2%

  A new system of separate tax rates will be created for property income with the new rates applying from 6th April 2027. 

  • The basic property rate will be 22%

  • The higher property rate will be 42%

  • The property additional rate will be 47%

  Then the tax rates applied to dividends will be increased for the ordinary and upper rates from 6th April 2026:

  • The ordinary rate will increase to 10.75%

  • The upper rate will increase to 35.75%

  And remember that this is the money you can take out of the business after you have paid corporation tax…

• Your pension contributions will cost more if you offer salary sacrifice pension schemes to your employees

  If you offer salary sacrifice pension schemes (where employees swap salary for pension contributions to save tax), that tax saving is disappearing.

  Currently neither you or your employee pay National Insurance Contributions on the salary sacrificed into extra pension contributions. From April 2029, you and they will pay National Insurance on pension contributions over £2,000 a year.

• Good news if you have a shop or restaurant

  Business rates are being reshuffled to help high street businesses:

  • If you run a retail, hospitality or leisure business with premises worth under £500,000, you'll pay lower business rates from April 2026. This is a permanent rather than temporary reduction.

  • The trade-off? Big warehouses and distribution centres (think Amazon-style operations) will pay significantly more to fund your relief. Think of this as a tax on the big online retailers that pay next to nothing for business rates as they don’t have physical shop fronts.

  There's also a three-year grace period if you expand your retail or a hospitality business to a second property, so you won't immediately lose your small business rates relief.

• Less tax relief on equipment and business sales

  Three changes that'll hit your wallet:

  • Tax relief on equipment is being cut from 18% to 14% from April 2026. You'll get less tax back when you buy vans, machinery, or other business kit

  • Selling your business to your employees? The tax break for Employee Ownership Trusts has been halved from November 2025. You'll now pay tax on 50% of the gain instead of getting full relief. That’s still better than selling as a trade sale.

  • Capital Gains Tax ‘Business Asset disposal relief’ (BADR) rate is rising from 14% to 18% from April 2026

• New costs and admin coming your way

  Keep these dates in your diary:

  • April 2026: Homeworking expense relief disappears (if you've been claiming tax back for employees working from home)

  • April 2028: Electric company cars will start paying a mileage tax (3p per mile for EVs, 1.5p for hybrids). At the moment how this will be administered is still unknown.

  • April 2029: All your VAT invoices must be sent electronically in a specific format. When we know more we will tell you. But if you are still invoicing on paper, it is now time to move over to a digital accounting system.

  • March 2029: Importing cheap goods under £135? That duty-free relief is being scrapped. This stops the Temu and Shein’s of this world having an advantage against UK high street businesses.

• HMRC is coming after small businesses harder

  The government is investing money into more tax enforcement hoping to raise £2.3 billion by specifically targeting small businesses. They're setting up dedicated teams to tackle fraud and evasion. Translation: make sure your books are spotless and you're not cutting corners on tax. We can help you to make sure your record keeping is up to date and would pass an HMRC investigation.

• Regional tourist taxes might hit you

  If you run hotels or holiday lets, local mayors can now add a "visitor levy" – basically charging your guests extra per night. This won't be everywhere, but it could make your area less competitive if neighbouring regions don't introduce it.

What should you do now?

Review your wage budgets for April 2026 and factor in the increases

1. Look at whether you have the right balance of PAYE and dividends for your personal remuneration

2. Look at your pension scheme setup and work out what the 2029 changes to salary sacrifice scheme will cost you

3. Check if you qualify for the new lower business rates

4. Get your financial records and tax compliance absolutely watertight – HMRC is watching

The theme here is simple: your costs are rising, your tax breaks are shrinking, and compliance is getting stricter. Budget accordingly.

Got questions?