The Budget: What business owners need to know

Beyond all the headlines and political debate, Budgets always have measures that were not the focus of the main announcement.

So, we have chosen the most important points that business owners need to know.

• National Living Wage: This will rise by 50p (4.1%) to £12.71 per hour from April 2026 for employees aged 21 and over. At the same time, the rate for 18-20 year olds will rise 8.5 per cent to £10.85 per hour.
• Dividends and savings tax: For business owners who pay themselves in dividends, the tax rate will increase by two percentage points from April 2026. 
• Business rates: Permanent lower business rates tax rates for over 750,000 retail, hospitality and leisure properties from April 2026. A £4.3 billion business rates support package will cap business rates bill increases for sectors hit hardest by revaluations from April 2026.
• Film studios: Business rate relief of 40% for film studios will remain until 2034
• Income Tax: The thresholds at which the different bands of Income Tax kick in will be frozen for a further three years from 2028 to 2031.
• Rental income: Tax on rental income will go up two percentage points from April 2027.
• Pensions: National Insurance will be applied to employer and employee salary-sacrifice pension contributions above £2,000 per year from 2029.
• Low value import relief: Customs arrangements that allowed some online retailers to import their goods duty free will be closed, ensuring all businesses pay equivalent tariffs. That means customs duty will apply to parcels of any value entering the UK from overseas from 2029.
• E-invoicing: The Government will require the use of electronic invoicing for all VAT invoices for business-to-business and business-to-government transactions from 2029. 
• Electric vehicles: A new 3p per mile tax will be added to electric vehicles and plug-in hybrid cars from 2028, in addition to existing road taxes.
• Fuel duty: A 5p temporary cut in fuel duty on petrol and diesel will be extended to September 2026, after which the duty will rise again over a six month period. 
• Electric Vehicle support: Support for the EV transition and 10 year 100% business rates relief for eligible change-points and EV-only forecourts. There will be a one year extension to the 100% first year allowances for businesses buying zero emission cars and charge-point infrastructure to April 2027.
• Tourism tax: Elected mayors in England will be given powers to levy a ‘tourist tax’ on visitors to the area who stay overnight.
• Investment allowances: There will be a permanent 40% First Year Allowance for main rate assets. The £1 million Annual Investment Allowance offers that give immediate tax relief on plant and machinery equipment is being kept.
• Enterprise tax incentives: Doubling eligibility for enterprise tax incentives.
• Apprenticeships: Training for apprentices under the age of 25 will be free for SMEs in England.
• Pensions: National Insurance will be applied to employer and employee salary-sacrifice pension contributions above £2,000 per year from 2029.
• Corporation Tax: This will remain at its current rate of 25 per cent.
• Capital Gains Tax Relief: The government will reduce the Capital Gains Tax relief available on qualifying disposals to Employee Ownership Trusts from 100% of the gain to 50%. This takes immediate effect.
• Enterprise Management Incentive (EMI) regime: EMI options are intended to help smaller companies with growth potential to recruit and retain the best employees. Currently, it is only available to companies with up to 250 employees. From April 2026, it will increase to 500 employees.