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With another Autumn budget looming, now is the time to start looking at how it could affect your business and, where possible, prepare for changes. Only, it isn’t that easy, is it? It sounds very practical and conscientious to be planning ahead, but as we know from bitter experience, the Chancellor’s budgets can spring a few unpleasant (but also even occasionally nice) surprises on us.
So, is there any point in second-guessing or preparing?
Our answer to that is ‘yes’, of course there is. While it is a bit of an oxymoron to talk about expecting the unexpected, that doesn’t mean you should do nothing. You can prepare to be agile and flexible.
Let’s not be too pessimistic about the budget. Traditionally, governments tend to come out all guns blazing on financial issues in their first year and then ease up later. Also, there has been some very public criticism of some policies by groups like the FSB. As a result, we could see a lighter touch budget for autumn and maybe even some goodwill gestures.
Government priorities continue to be strong around sustainability and innovation. That much was indicated clearly in the Spring Statement. There is also some political pressure to push back on the sustainability critics. As a result, a business that is proactive in adopting sustainable innovations and new technologies could well benefit. It may be that they can find substantial financial benefits through tax reliefs and grant opportunities. These could significantly offset, for example, development costs or be a real boost to operational expenses.
The fact that SMEs are crucial to the financial make up of the country hasn’t changed. Again, there has been a lot of less-than-positive reception for the last big round of changes, so it could be time for a peace offering. It seems possible then that the Chancellor will introduce or extend measures to support SMEs. Most likely, these will be in the form of lower business rates, VAT reductions, or accessible government-backed funding schemes. The CBI are certainly calling for these and similar measures. We all know SMEs are having a tough year and still navigating some very real cashflow pressure, so, assuming these measures appear, they could be a lifeline for some.
There are bound to be a few other areas that will benefit, digital infrastructure and development and access to associated training, for example, as well as a few other spot changes. It’s also worth remembering that, partly as a result of the Trump tariff uncertainty, the government have been opening new agreements with other countries that could have a knock-on effect.
Sadly, there are probably also going to be some unwanted measures, and we need to be ready for them if they are implemented.
We know that the treasury is facing increased pressure on public finances. That could lead the Chancellor to announce increased taxation or reduced tax relief. That could well mainly affect the larger corporations or profitable industries. In turn, these increases could strain company finances and profit margins, leading to a hit on purchasing that will ripple down the supply chain.
Recent budgets should act as a warning to us all about the potential changes to employment laws, environmental regulations, and financial compliance requirements. Businesses in heavily regulated sectors such as financial services or manufacturing might encounter higher operational costs and administrative burdens as a result of further changes.
With so much tightening of spending anticipated, existing subsidies, especially related to energy, industry-specific support, or regional grants, may be curtailed or withdrawn. In fact, it feels almost certain that this will happen, but as to where and when, well, that is more difficult to predict. If you are reliant on subsidiary-based funding, though, I would be ready and have a plan B in place now.
In times of tighter government budgets and potential tax increases, consumer and business spending is highly likely to slow down. Lower consumer spending will be a major problem for sectors that are reliant on it, such as retail, hospitality, and leisure. If it slows further, then we will see increased insolvency rates among businesses already struggling with existing financial vulnerabilities. Additionally, tightened public and private sector spending could lead to greater financial pressure on charities, reducing their income streams at a time when their support is most needed.
There are no certainties here, so you must adopt a proactive and flexible approach to handling policy changes. Here are a few practical strategies we recommend to help ensure your business is ready to respond efficiently and effectively:
I fully appreciate that you may not want to do any of the above, but please at least consider the issues as soon as we know what is in the budget. We are already seeing businesses coming to us with problems that they didn’t plan for around the minimum wage and national insurance increase this year - both of which were announced a number of months ago. Therefore, if you want to avoid financial difficulties, plan as soon as you can for changing circumstances.
The UK Autumn Budget 2025 will undoubtedly bring changes. By identifying potential positives and likely challenges early, and then using strategic planning and professional advice, your business should be resilient, flexible, and responsive to whatever the budget brings.
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