Latest / The 3Bz Podcast - Building Better Business / EP139 - Autumn Budget 2025: What the Chancellor Just Changed (and What It Means for Your Business)

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EP139 - Autumn Budget 2025: What the Chancellor Just Changed (and What It Means for Your Business) · The 3Bz Podcast - Building Better Business

• 0:01
  Hi there, business. Owner and welcome to the three
• 0:03
  BS podcast, the place where we go beyond the numbers and dive
• 0:06
  into the strategies to help you build a Better Business one step
• 0:10
  at a time. I'm your host Stephanie, a multi
• 0:12
  awarding entrepreneur with over a decade of experience in the
• 0:15
  bookkeeping and currency world. If you're a business owner
• 0:17
  looking to streamline, grow, and get back the time that you
• 0:20
  deserve, you're in the. Right place.
• 0:22
  Tackling real world problems, answering tough questions and
• 0:25
  digging deep into business building secrets in just 15
• 0:28
  minutes. Each week.
• 0:30
  So Are you ready to build a Better Business with confidence
• 0:32
  and clarity? Then let's go.
• 0:35
  Hello and welcome back to another episode of the three BS
• 0:38
  podcast, your go to place for 15 minutes of CPD certified
• 0:42
  motivation, inspiration or education each week.
• 0:45
  If you're new here. Hi, I'm Stephanie Marshall, CEO
• 0:48
  and founder of multi award-winning bookkeeper
• 0:50
  accountancy practice ABCSUK. I'm also podcast host business
• 0:54
  development nerd. The specs are on, that can only
• 0:56
  mean it's budget time and I'm here to give you in just 15
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  minutes all of the information you need to know as a business
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  owner as the Autumn Budget 2025 was announced today by Rachel
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  Reeves. By the time you see this, you'll
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  have slept on it at least, and the headlines will be all over
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  the news. I know it's confusing, I know
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  it's hard to understand, so let's whisper it as quickly as
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  humanly possible because actually this was a very highly
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  anticipated budget. Many people were worried about
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  it, myself included, and the whispers that we've been hearing
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  around the House of Commons and Lords and the industry since
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  July, a lot of them actually didn't come to fruition.
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  Rachel Reeves delivered her Autumn Budget on the 26th of
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  November 2025 and spoke for Around 75 minutes, an hour and
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  1/4 and was stopped seven times in that time by the Speaker of
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  the House. What often happens at these
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  budgets and statements is the MPs that are in the room either
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  highly agree or highly disagree with their changes that have
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  been announced, the policies and procedures and plans that are
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  being announced in the budget and can get quite rowdy.
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  So what often happens is the Speaker of the House or Deputy
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  Speaker of the House in this case has to tell everyone to be
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  quiet, has to stop and then restart it again.
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  Normally there's a couple of times, this time was it's 7.
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  So hopefully that gives you an idea of how passionate the MPs
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  in the room were with the with the announcements that were
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  being made. The biggest faux pas I think
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  I've seen in budget history happened about 45 minutes before
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  Rachel Reeves was due to stand up in the House of Commons and
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  deliver her autumn budget speech.
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  Now some for some reason, and it's under investigation, the
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  OBR. So the Office of Budget
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  Responsibility published their paper with all the changes in
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  about 45 minutes before she was due to stand up.
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  And not only that, it took about 30 minutes for them to take the
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  report down. The BBC had announced a lot of
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  the major changes before she's even stood up.
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  And the national minimum wage rates that come into force from
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  April 2026 were actually announced the night before the
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  budget by the BBC too. So someone somewhere is probably
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  about to get a very big disciplinary because there's
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  been a couple of really big faux pas.
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  And it just feels like, personally, in my opinion, the
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  political landscape right now is a bit of a farce.
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  And as business owners and as humans, we don't have as much
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  trust in them as we probably should, seen as they are
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  representing us in Parliament. Politics aside, let's go through
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  some of the key changes that are going to affect you as a
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  business owner in this budget. The Labour Party's manifesto is
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  that they will not increase the rate of income tax, National
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  Insurance or VAT during their time in power.
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  Now, although they have kept that, they've been quite sneaky
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  with what they've done. So they've frozen the
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  thresholds. What that means is for personal
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  tax purposes, 12,570 LB is your personal allowance.
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  However, the national minimum wage is increased, so more
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  people will go over that threshold and therefore have to
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  start paying income tax. And for business owners, having
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  employees is a much higher cost from April 2026 because of this
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  increase yet again. So although the thresholds are
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  frozen and the rates haven't been increased, we all end up
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  actually paying a little bit more tax.
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  So the budget I'm going to get, I'm going to start with the
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  biggest headline is that it's a tax raising budget, full stop.
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  Regardless of the fact that the Labour Party's manifesto is that
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  they will not increase the rates of income tax, VAT or National
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  Insurance, they have frozen the thresholds, which that means
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  every other type of income that matters to business owners like
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  you and I is going to be taxed more heavily going forward.
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  It is the biggest tax raising budget in over a decade and I
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  think all these little changes are going to add up to big
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  differences for business owners. Dividend tax is a big one for
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  directors. If you're a director of a
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  limited company and you take a dividend, over the last few
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  years they've been reducing the dividend allowance and it's now
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  at £500. Now Rachel Reeves has announced
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  from April 2026 the tax on dividends over that allowance is
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  going up. So the basic rate is going up
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  from 8.75% to 10.75%, the higher rate is going up from 33.75% to
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  35.75% and the additional rate is going to stay at 39.35%.
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  This matters because most small business owners don't take big
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  salaries. They take the standard 12570
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  personal allowance and they make the rest up to dividends.
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  So for directors taking for example 40,000 LB of dividends
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  in a year, that's now a bigger chunk loss to tax for exactly
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  the same income. And don't forget, if you are a
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  director of a limited company, you will get taxed personally in
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  your dividends and your company will also be charged corporation
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  tax for those dividends. Now the classic tax efficient
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  director pay strategy that we all know and love that 12517
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  dividends, it is still sometimes the most tax efficient way and
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  that's when you need a bookkeeper or an accountant
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  Michael's at ABCSUK to go through the strategy on how best
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  to extract that those funds and the income from your company
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  into your pocket. Another increase of 2% is
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  savings and property income tax rises from April 2027.
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  Now this one was surprising to me, but as I said, April 2027,
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  so it's not something that's going to affect us in the next
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  next year. It's going to be the one after
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  that. But it's something to be aware
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  of when you're planning for the future.
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  If you are a landlord, you're probably going to get brought
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  into making such digital from April 2020, sixth or April 2027
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  anyway. So just remember that actually
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  the tax you're going to payment income is also probably going to
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  cost you more to be a landlord. And if so, if you have a good
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  savings pot outside of Isas from 27 to 28, that is going to be
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  taxed at 2% more too, as well as that property income.
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  So again, get very clever. So with dividends in 2026, same
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  as in property in 2027, those 2% increases don't sound a lot, but
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  add them all together and that's quite a lot of money.
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  And that is where bookkeys and accountants like us you need in
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  your corner to help you extract the most cash and be the most
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  tax efficient you can for your income.
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  If you don't have a bookkeeper on accountant and you just want
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  to go for what the changes mean for you, you can book a free
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  discovery call with me at ABC's UK.
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  You can get together 15 minutes, talk about your unique
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  circumstances and see the best plan going forward.
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  You may you may benefit from monthly recurring support or
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  just need a one to one or a power hour just to get things
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  out on an ad hoc basis or a quarterly basis.
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  This is where the Discovery calls really help because they
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  give you an idea of where you are, what help you and support
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  you need, and what help and support you can always plan to
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  grow to needing in the future. The income tax thresholds have
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  been frozen until at least 20-30 now.
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  What that means is although the thresholds are not going up,
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  you're not going to be taxed another percentage or two like
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  it was rumored, but more people, because the minimum wage is
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  increasing, more people will now have to start paying tax,
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  haven't paid tax before. And those people that are on the
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  cusp of basic rate and additional rate or higher rate
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  of that 40% are more likely to tip over.
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  An estimated 920,000 people will now start paying 40% tax on that
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  amount over that 37 1/2 thousand threshold plus your 12570.
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  This is what confuses so many people is when I say you're
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  moving into a higher rate tax band.
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  It's not your entire income that counts, it's only a small
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  portion of that. So if you earn your 12570 that's
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  completely tax free, then the next 37 1/2 is at 20% and then
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  anything over and above that in gets put into the higher rate
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  threshold. So if you earn 50,000 and one
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  pound, 1 LB would be taxed at a higher rate, your 37,500 will be
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  taxed at 20% and then your 12,570 will be tax free.
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  Again, speak to someone, get on a discovery call.
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  If you're employed and just want to know what that means for you
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  as a as a person, then you can also book a discovery call with
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  us and we can go through the unique circumstances and explain
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  to you what that's going to look like.
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  Because a lot of business owners are employees too, and they have
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  side hustles and I know they watch all of this podcast and
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  the biggest thing that I think will affect business owners is
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  that salary sacrifice hit from 29.
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  Chancellor Rachel Reeves announced that those who are
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  using a salary sacrifice pension scheme to submit their pension
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  contributions will become subject to both employer and
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  employee National Insurance. That was one of the big tax
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  financials. Accountants like me used to help
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  you be more efficient with the income that you earning and
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  generating in your business. Employers will pay more,
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  employees will pay more. Directors using salary sacrifice
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  will pay more. It's not the end of the world,
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  but again, it's even more important than ever to have
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  somebody that knows this information, that can look at
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  the numbers in your world in your unique circumstances and
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  help you plan for the future to be as most tax efficient as
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  possible. Because it's not till April 29.
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  It's not an urgent thing and I'll definitely cover it more in
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  a future episode. Maybe we'll get the guys from
• 9:40
  Penfold on here to explain what that means for you and your
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  business owner or you as an individual director contributing
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  to a pension scheme via salary sacrifice.
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  It's definitely something you need to be aware of.
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  Other things that business owners need to be aware of.
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  Fuel duty has been frozen until September 2026.
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  I think that's an important one to mention because actually the
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  cost of of getting places, whether it's get into clients
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  and transport and if you're service based, all that haulage
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  cost, if you're a product based business.
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  The fuel freeze has been extended till September 2026 and
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  Rachel Reeves also announced there will be some sort of rule
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  put in place so that petrol pumps can't inflate the petrol
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  cost when the wholesale cost drops.
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  So they have to pass on that saving to the individual and the
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  business owner. Speaking of vehicles, the EV Rd.
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  tax that was was rumoured before the budget or leaked before the
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  budget is coming into force from April 2028.
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  So again, we've got time to plan this.
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  But just so you're aware, what they're going to do is if you
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  have an electric vehicle, it'll be 3 pence per mile.
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  If you have a hybrid vehicle, it'll be 1.5 pence per mile and
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  that will be paid annually. When you pay your Rd. tax or
• 10:48
  vehicle excise duty every year, I believe they're going to build
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  a system where you would input your mileage and that would
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  calculate how much you owe. Otherwise, I don't know how it
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  says track it, but again, it's coming and it's frustrating
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  because for years we were pushed as business owners and
• 11:02
  individuals to buy electric vehicles given all these grants
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  and all this tax relief, and now they're going to take it all
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  back again. I'm going to stay politically
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  neutral. I'm Switzerland as best as I
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  possibly can be. I also wanted to go into
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  employment costs because I think it's very important to show you
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  and explain how that's going to look for you going forward
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  because the national minimum wage rates were announced
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  tonight. For the budget, they are £12.71
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  per hour for those aged 21 or over to £10.85 for those aged 18
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  to 20 and 8 LB an hour for those aged 16 to 17.
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  And that all comes into force from April 2026.
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  So what that means is if you have an employee that's on
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  national minimum wage, age 21 or over, who does 37 1/2 hours a
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  week, their annual take home pay will increase by 663 LB per
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  year. But that's not the end of the
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  story because as we know as employers, we have employers
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  National Insurance, we have pension contributions and also
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  enrolment that we have to think of too.
• 12:01
  So as long as it's a standard tax code, they don't have
• 12:04
  student loan deductions or anything like that.
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  The cost per employee is a 1151 LB per year as an employer.
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  So what that means is there's a higher national living wage,
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  there's higher employer National Insurance in real terms because
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  that minimum wage has increased. There's more pressure on payroll
• 12:22
  budgets than ever. There's going to be higher
• 12:24
  recruitment and retention costs and ongoing inflation in
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  business services. Although they have announced,
• 12:29
  the Obi have announced, they expect that to be nought .4%
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  lower next year. This matters because if you're
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  hiring, this matters. If you're pricing your services,
• 12:37
  this matters. And if you're planning your cash
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  flow, this really matters. What we do for our clients at
• 12:43
  ABCS UK is we put the old minimum wage, the new minimum
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  wage rate and show them what that actually looks like in real
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  terms across their employees using real data.
• 12:52
  If that's something that you think would be helpful and
• 12:54
  useful for you. Our power hours are £149 an hour
• 12:57
  and you can book a free discovery call to see if that's
• 12:59
  a good fit and if you will get the value from that.
• 13:01
  And we can book it from there. So go on to abcsuk.com or the
• 13:05
  Amazon Socials, ABCS UK across all the social platforms and we
• 13:09
  can get that call booked in for you and help you to stress less.
• 13:13
  Plan and be clear and confident with going forward with these
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  changes taken into consideration, what you should
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  do now if you're a business owner, One, review your director
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  pay strategy, get a call book within your accountant dividend
• 13:26
  tax raises next year. Plan ahead, get savvy with your
• 13:30
  tax, get confident and knowing what you're doing and what then
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  rates are going to look like so you can start saving for tax or
• 13:36
  start planning for different tax strategies to make the most of
• 13:39
  the income in your business #2 revisit.
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  Pensions are so important. Salary sacrifice loses its
• 13:45
  advantage in 2027, so though you don't need to do it now, you
• 13:48
  need to start planning ahead. 3 Tighten that cash flow. 2025 to
• 13:53
  2028 will test even good businesses.
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  As those cost goes up, the market's not growing as quickly
• 13:59
  as it should, despite the OBR upgrading the growth from 1% to
• 14:03
  1.5%. Last autumn in the budget, they
• 14:05
  said 2% and then downgraded it in the spring.
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  So actually we're still down on what they predicted last year. 4
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  Pricey update Costs are rising. Make sure your margins survive
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  now more than ever. Look at your pricing.
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  Look at the room for growth. Look at the margins.
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  Think of all the increases that come naturally.
• 14:23
  Things like services, cost of goods are naturally increasing.
• 14:28
  Those things need to be taken in consideration with your pricing.
• 14:31
  We need to make sure your margins survive even if those
• 14:34
  costs suddenly start to increase with these new employment
• 14:37
  changes, because even with the income tax threshold freezing,
• 14:40
  that cost as an employee has to go somewhere.
• 14:44
  And whether you're buying services from another business,
• 14:47
  you're buying materials and goods from another business to
• 14:49
  then sell on to make your product, those costs have to be
• 14:52
  taken into consideration. 5 Use Isas to shield your savings
• 14:57
  income. So although the property income
• 14:59
  and savings income are going up from 2027, if you use an ISA,
• 15:03
  you have a limit which is £20,000 at the moment.
• 15:07
  I know they're changing it. So some will be investments and
• 15:09
  some will be cash, which I will cover in the next episode of the
• 15:13
  Of the Three BS podcast. So stay around for next week's
• 15:15
  episode if you want to know more about the personal impacts of
• 15:18
  the Autumn Budget for you as an individual.
• 15:21
  But actually plan early. You can start using those
• 15:24
  allowances and make the most of them now so that you're not hit
• 15:26
  with a 2% rise as harshly in 2027.
• 15:30
  And #6 brace for HMRC scrutiny. The compliance enforcement is
• 15:34
  ramping up more than ever. What that means is that they are
• 15:38
  using AI, they using technology, they are higher, more members of
• 15:41
  staff to seek out those who are tax avoiding, tax evading and
• 15:45
  those are simply making mistakes to make sure that HMRC get the
• 15:48
  tax they're due. Again, more important than ever
• 15:51
  to have a bookkeeper on accountant that knows what
• 15:53
  they're doing that can help you navigate the changes, the
• 15:56
  legalities and find those loopholes to make sure you are
• 15:59
  as efficient paying tax as humanly possible.
• 16:02
  So that's the Autumn Budget 2025.
• 16:04
  Little of 15 minutes, but this is the bits that affect you as a
• 16:07
  business owner. As I said, next week's episode I
• 16:10
  will cover the Autumn Budget as an individual and what that
• 16:13
  means for you as as a person. If today's episode helps you
• 16:17
  make sense of the chaos, do share it with another business
• 16:19
  owner because I want them to know the truth behind the
• 16:21
  headlines and the bits hidden in the supplementary pages that you
• 16:24
  don't hear announced on the TV. And remember that although the
• 16:27
  numbers look gloomy and the budget maybe wasn't as bad as we
• 16:30
  first thought, your business is not built on government
• 16:33
  announcements. It's built on strategy,
• 16:35
  resilience and raising your standards.
• 16:37
  Thank you for listening or watching on YouTube.
• 16:39
  I will see you next week, the next one.
• 16:41
  Bye. And that brings us to the end of
• 16:44
  another episode of the. 3B's podcast.
• 16:47
  I hope you found it useful and that you're walking away with
• 16:49
  some motivation, inspiration or education to help you build a
• 16:53
  Better Business. Don't forget to subscribe, leave
• 16:56
  a review and of course, connect with us on social media for more
• 16:58
  insights, tips and behind the scenes content.
• 17:01
  Your next step in building a Better Business is just a click
• 17:03
  away. I can't wait to connect with you
• 17:05
  and I'll see you on the next episode.
• 17:07
  Bye.