Autumn Budget 2025: What Kent Businesses Need to Know
Chancellor Rachel Reeves delivered her second Autumn Budget this week and it’s packed with changes that will affect small and medium businesses across Kent. From tax threshold freezes to business rates relief, there’s a lot to unpick. Let’s walk through what actually matters for your business.
The “Stealth Tax” Everyone’s Talking About
The headline measure that caught most attention was the extension of the income tax threshold freeze until April 2031 – that’s three years longer than previously planned. The personal allowance stays fixed at £12,570, the higher rate threshold at £50,270, and the additional rate at £125,140.
What does this actually mean? As your earnings increase with inflation and pay rises, more of your income gets dragged into higher tax bands. It’s called “fiscal drag” and it means you’ll pay more tax without the government technically raising tax rates. A construction director in Gravesend earning £80,000 could pay an extra £1,766 in tax by 2030 without any significant boost to their purchasing power.
The Office for Budget Responsibility estimates this will create 780,000 more basic-rate taxpayers, 920,000 more higher-rate taxpayers, and 4,000 additional top-rate taxpayers by 2029/30. That’s over 1.7 million more people paying more tax.
Good News for Retail, Hospitality and Leisure Businesses
There’s genuinely positive news if you run a shop, restaurant, café, pub or other hospitality business in towns like Dartford, Sevenoaks or Canterbury. It’s estimated over 750,000 retail, hospitality and leisure properties will benefit from permanently lower business rates – the lowest since 1991.
This relief is being funded through higher rates on properties worth more than £500,000 (think large warehouses used by online retailers). The government has also provided a support package worth over £4.3 billion over three years to help properties facing large bill increases, which should cushion the impact of revaluation. For many of our Kent-based high street businesses, this could be the most meaningful change in the Budget.
Free Apprenticeships for Under-25s
Small and medium-sized businesses can now access completely free training for apprentices under 25. The government is providing £820 million over three years through its youth guarantee programme.
This is a significant saving. Previously, smaller employers had to contribute towards apprenticeship costs. Now, if you’re looking to bring in young talent, the government covers the full training cost. For a local business considering taking on a school leaver or graduate, this removes a major financial barrier.
Changes to Dividend, Savings and Property Income Tax
If you’re a limited company director taking dividends, brace yourself. Tax rates on property, savings and dividend income will increase by two percentage points across all bands (although it’s not yet confirmed when this will come into effect – usually it’s the following April):
- Basic rate: 8.75% rising to 10.75%
- Higher rate: 33.75% rising to 35.75%
- Additional rate: 39.35% rising to 41.35%
Currently, a landlord with £25,000 income pays nearly £1,200 less in tax than their tenant on the same salary because no National Insurance is charged on property, dividend or savings income.
For many small company directors who balance salary and dividends, this means it’s time to review your remuneration strategy with your accountant.
Pension Contribution Changes
From April 2029, salary sacrifice for pensions will be capped at £2,000. Contributions above this will be taxed like normal employee pension contributions. This pragmatic step, according to the Chancellor, ensures people on low and middle incomes can continue using salary sacrifice without paying more tax, while reducing the benefit for higher earners.
The measure is expected to raise £4.7 billion by 2029/30. If you currently use generous salary sacrifice arrangements, you’ve got time to plan, but this is worth discussing with your accountant sooner rather than later.
Corporation Tax Stays Stable
There’s some reassuring news on corporation tax. The government is retaining:
- The UK’s competitive 25% corporation tax rate (lowest in the G7)
- Full expensing for business investments
However, the overall picture on capital allowances is mixed. There’s a new 40% first-year allowance for other investments. However, the standard writing-down allowances (the annual relief you get on assets) will be reduced. The overall impact depends on your investment patterns – businesses making large capital investments should still benefit, but the changes reduce relief for smaller, ongoing purchases. For established Kent businesses looking to invest in equipment or machinery, the full expensing relief remains a valuable incentive.
ISA Changes Affecting Savers
From April 2027, the ISA system changes. You’ll still have a £20,000 allowance, but £8,000 must be invested in stocks and shares, capping the cash ISA allowance at £12,000 (except for over-65s who retain the full cash allowance).
The government’s aim is to boost investment in British businesses. Whether this works as intended remains to be seen, but for business owners with personal savings, it’s worth reviewing your ISA strategy.
Capital Gains Tax Relief Reduced
If you’re planning to sell your business to an employee ownership trust, listen up. Capital gains tax relief on these sales will reduce from 100% to 50%. While this still provides a strong incentive for employee ownership, it doubles the tax cost of such transactions.
The government remains committed to doubling the size of the cooperative economy, and the Department for Business and Trade will launch a consultation on better supporting co-ops to grow.
What About Fuel Duty and Transport?
The temporary 5p fuel duty cut has been extended until September 2026, though a staged increase follows after that. For businesses with vehicle fleets – particularly construction, logistics and delivery companies – this provides short-term relief but signals higher costs ahead.
Regulated train fares (including season tickets) are frozen until March 2027, and bus fare caps have been extended, which might help staff commuting costs.
Council Tax for High-Value Properties
A new council tax surcharge (dubbed the Mansion Tax) applies to properties worth over £2 million. Properties worth £2 million face a £2,500 annual charge, rising to £7,500 for homes worth £5 million. This won’t affect most Kent businesses directly, but if you own a valuable property or have clients who do, it’s worth noting.
The Bigger Picture in the Autumn Budget 2025
The Office for Budget Responsibility has upgraded Britain’s growth forecast for this year from 1% to 1.5%, though they’ve reduced expectations for productivity growth. Despite the challenges, borrowing is set to fall as a share of GDP in every year of the forecast.
The tax measures announced in the 2025 Budget will increase taxes by £26 billion by 2029/30, bringing the total tax take to an all-time high of 38% of GDP by 2030/31. The Chancellor framed these as “necessary choices” to avoid austerity while maintaining fiscal responsibility.
What Should You Do Now?
Every business is different, and these changes will affect you in different ways depending on your structure, industry, and plans. Here are some immediate actions to consider:
Review your remuneration strategy – If you’re a limited company director, the dividend tax increases mean it’s worth reviewing how you pay yourself. There might be more tax-efficient alternatives.
Check your business rates position – If you’re in retail, hospitality or leisure, you should benefit from the new relief. Contact your local authority to confirm you’re getting the full discount you’re entitled to.
Consider apprenticeships – With free training for under-25s, now might be the perfect time to bring in young talent. We can help you navigate the paperwork and payroll implications.
Plan for pension changes – You’ve got until 2029, but if you use significant salary sacrifice for pensions, start thinking about alternatives now.
Review your investment plans – With full expensing retained but writing-down allowances changing, it’s worth discussing major purchases with your accountant before you commit.
Concerned About How These Changes Affect Your Business?
Budget announcements can sound straightforward in the Chancellor’s speech, but the devil is in the detail. What makes sense for a construction company in Dartford might not work for a professional services firm in Sevenoaks.
At Adams Accountancy, we’re here to help Kent businesses manage these changes without stress. Whether you’re worried about the dividend tax increases, want to understand how the business rates relief applies to your property, or need to review your overall tax strategy, our friendly team can provide clear, practical advice.
Contact us for a free, no-obligation chat about how the Autumn Budget 2025 affects your specific situation. Call us on 01322 250001 or get in touch online. Remember, no question is too simple when it comes to understanding your taxes.
Frequently Asked Questions About the Autumn Budget 2025
Will the frozen tax thresholds really cost me more money?
Yes, if your income increases. The threshold freeze means that as your salary or profits rise with inflation, more of your income falls into higher tax bands. For example, if you currently earn £48,000 and get a 3% pay rise each year, by 2030 you’ll be earning over £55,000 – pushing you into the higher rate tax band even though your real purchasing power hasn’t increased much. According to HMRC’s income tax rates guidance, this “fiscal drag” will affect nearly 2 million additional taxpayers by 2029/30.
How do I claim the business rates relief if I run a café in Kent?
The business rates relief for retail, hospitality and leisure properties should be applied automatically by your local authority. However, it’s worth contacting them directly to confirm you’re receiving the correct relief. Different Kent councils may handle this slightly differently, so check with whichever authority covers your area. You can find detailed information about business rates on the GOV.UK website.
Should I stop using salary sacrifice for my pension now?
Not necessarily. The £2,000 cap doesn’t come into effect until 2029, giving you plenty of time to plan. For many people, salary sacrifice remains tax-efficient even with the cap. The key is reviewing your strategy now rather than waiting until 2029. Speak to your accountant about whether you should adjust your contributions or explore alternative ways to save for retirement. You might want to read our blog about tax-efficient remuneration strategies for more guidance.
Does the dividend tax increase mean I should change from being a limited company?
Not necessarily. While dividend tax rates are increasing by 2 percentage points, limited company structures still offer many advantages including lower corporation tax rates, pension contributions through the company, and flexibility in how you withdraw profits. The right structure depends on your specific circumstances, profits, and plans. Get in touch with us for a personalised review of whether your current structure still makes sense.
What exactly counts as “retail, hospitality and leisure” for the business rates relief?
The relief applies to properties used for retail (shops, showrooms), hospitality (restaurants, cafés, pubs, hotels), and leisure (gyms, cinemas, museums). However, there can be grey areas. For example, if you run a business that combines retail with services, you might only get partial relief. The specific rules are detailed in HMRC’s business rates relief guidance, but if you’re unsure, it’s worth getting professional advice to ensure you’re claiming everything you’re entitled to.
About the Author
Michelle Adams is a qualified chartered accountant and director at Adams Accountancy, a Kent-based practice specialising in small and medium businesses. With extensive experience helping construction companies, sole traders, and limited company directors navigate complex tax changes, Michelle believes in making accounting accessible and jargon-free. Adams Accountancy’s all-female team works with businesses across Dartford, Sevenoaks, Gravesend, Canterbury and throughout Kent and beyond, providing accounting, tax, and business advisory services with a “no question is too silly” philosophy. Check out our client recommendations to see what business owners say about working with us.