Business owners and the ghosts of Budgets past

It’s that scary time of the year again. Halloween? No something even more frightening for businesses and their owners than ghouls and ghosts roaming the streets on All Hallows’ Eve - the Autumn Budget scheduled for 26 November 2025.

Rewind 12 months to 30 October 2024 and the then newly appointed chancellor Rachel Reeves announced a series of measures to plug a £40bn hole in the public finances. For measures read tax increases, with the largest of these affecting businesses. Employer National Insurance Contributions (NICs) were increased to 15% from 13.8% and the threshold at which employers must pay NICs on employees’ earnings was lowered to £5,000 from £9,100. This was forecast to raise £23.8bn-£25.7bn a year for the five-year period 2025/26 to 2029/30.

It wasn’t just taxes that impacted businesses though. The National Minimum Wage, for example, was raised to £12.21 per hour from £11.44 for over 21-year-olds and to £10 per hour from £8.60 for 18- to -20-year-olds. Meanwhile, business owners also lost out following the announcement that 100% business property relief is to be capped at £1m with a 50% rate of relief applied to anything above this level. A further measure was introduced to bring most unused pension funds and death benefits within the value of a person’s estate for Inheritance Tax (IHT) purposes from 6 April 2027 onwards.

All this from a chancellor who on the campaign trail in the run up to the 2024 General Election declared that, if elected, she would lead the most pro-business Treasury in history. Does the rhetoric match the reality? Certainly, businesses and business owners have been asked to do their bit, and arguably more.

One year on and it’s possible businesses may well be asked to do their bit again. That’s because taxes look set to be hiked further to plug yet another funding gap.

And yet, there’s been no shortage of speculation in the run-up to Budget 2025 around further tax hikes. Back in August, the National Institute of Economic and Social Research (NIESR) highlighted a deficit of £41.2bn by the fiscal year 2029-30. Substantial adjustments in the Autumn Budget will be needed if the chancellor is to remain compliant with her fiscal rules, according to NIESR. In September 2025, Capital Economics suggested the chancellor will need to raise £18-£28bn to avoid breaking her fiscal rules and to maintain the £9.9bn buffer.

The above are just guesstimates, albeit educated, but based on the amount of noise coming from both inside and outside Westminster, the direction of travel, at the very least, appears to have been set – more tax increases are likely. This is dictated not just by ongoing adherence to Reeves’ own fiscal rules, but also the high level of outstanding government debt and rising gilt yields, which reduce her leeway.

Cue endless eye-catching headlines about the introduction of a wealth tax, changes to property taxes, the equalisation of capital gains tax rates with those of income tax, adopting a uniform VAT rate, as well as further changes to pensions and inheritance tax. As for which taxes will be impacted or the extent of any hikes, much will depend on the size of the funding shortfall. All will be revealed on Budget Day 2025.

What to do?

Until then what should business owners do? While trying to second guess what may or may not happen in the Budget will likely just serve to ramp up stress levels, there are steps that can be taken at the personal taxation level.

Business owners can ensure they have a personal financial plan that is up to date and suitable. And if they don’t, business owners can look to book an appointment with a financial adviser who can provide comprehensive, forwardlooking advice to ensure the right decisions for them are made and an effective plan is put in place. Time is running out though. The scariest day of the year is fast approaching.

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Approver: Quilter Cheviot, 15 October 2025