The UK Chancellor of the Exchequer, Rachel Reeves, delivered the Autumn Budget 2025 to Parliament this afternoon, outlining the government's financial plans for the coming year. For international entrepreneurs who are new to the UK, understanding what the Budget is and why it matters is essential to planning your business and personal finances effectively.

The Budget is the government's annual financial statement that sets out its spending plans and taxation policies. It's one of the most important dates in the UK's political calendar because it directly affects how much tax individuals and businesses pay, what support is available, and the overall economic direction of the country. The Budget is delivered by the Chancellor and is accompanied by independent forecasts from the Office for Budget Responsibility, which assesses the health of the economy and the impact of the government's decisions. This year's Budget focused on three key priorities: reducing the cost of living for families, cutting NHS waiting lists, and bringing down government debt and borrowing.

For those of you who have recently moved to the UK to start your business venture, this Budget has introduced several measures that will directly impact your daily spending, income, and business operations. The government faces significant economic challenges, with inflation currently at 3.6% and public debt at historically high levels. To address these pressures, the Chancellor has announced a package of tax increases alongside targeted support for households and businesses, aiming to stabilise the economy while funding essential public services.

Impacts on Minimum and Living Wages

One of the most significant announcements for entrepreneurs employing staff is the increase in the National Living Wage and National Minimum Wage from April 2026. The National Living Wage for workers aged 21 and over will rise to £12.71 per hour, giving full-time workers an extra £900 annually. For younger workers aged 18-20, the rise is even more substantial at £1,500 per year. While this benefits your employees, it also means higher wage costs for your business, so you'll need to factor this into your financial planning.

Taxation

On the taxation front, income tax thresholds will remain frozen until April 2031. This means that as your income grows, you may find yourself moving into higher tax brackets without any increase in the threshold amounts. Currently, you pay 20% tax on earnings above £12,570, 40% on income over £50,271, and 45% on income above £125,140. The freeze means more people will pay higher rates of tax as wages increase with inflation. Additionally, taxes on property income, savings income, and dividend income will increase by two percentage points, which affects entrepreneurs who take dividends from their companies or have rental income. Dividend tax rates will increase, meaning basic rate taxpayers will pay more on company profits distributed as dividends.

Business rates

For business operations, there is positive news regarding business rates. The government has announced permanently lower business rates for over 750,000 retail, hospitality, and leisure properties, along with a £4.3 billion support package to cap business rate increases for sectors hardest hit by revaluations from April 2026. If you're running a business with physical premises in these sectors, this could provide meaningful relief. The fuel duty freeze has also been extended, with the temporary 5p cut continuing until August 2026, which will help if your business involves transportation or delivery services.

Daily living costs

Daily living costs will see some relief, which indirectly benefits entrepreneurs managing personal expenses while building their businesses. Energy bills will be reduced by £150 from April 2026, rail fares have been frozen for the first time in 30 years, and prescription charges in England will remain unchanged. These measures are designed to ease the cost-of-living pressures that many people, including new business owners, are facing. For those of you using public transport to meet clients or travel for business, the rail fare freeze could result in hundreds of pounds in savings.

Electric / Hybrid Vehicle Taxes

However, there are longer-term changes to be aware of. From 2028, electric and plug-in hybrid vehicles will face a new per-mile tax, with electric vehicles charged at 3p per mile and plug-in hybrids at 5p per mile. If you're considering business vehicle purchases, this is an important factor for future planning. Additionally, from April 2029, pension contributions made through salary sacrifice schemes above £2,000 annually will be subject to National Insurance, which affects tax planning strategies that many entrepreneurs use to maximise their income efficiency.

Growing and Scaling

For entrepreneurs looking to grow and scale their businesses, the Budget includes measures to support fast-growing companies. Enterprise tax incentives are being doubled in eligibility, making it easier for scale-ups to attract investment and talent. There's also a new three-year stamp duty exemption for newly listed companies, which benefits businesses considering going public in the UK. The government is also reforming ISAs to drive approximately £3 billion of retail investment toward UK-listed companies, creating more opportunities for businesses seeking capital.

Summary

As you navigate your first years in the UK as an international entrepreneur, it's essential to understand that the Budget represents both challenges and opportunities. While tax increases will affect your personal income and business costs, there are also targeted reliefs and support measures that can benefit your specific situation.

We recommend consulting with a qualified accountant or tax adviser who can help you understand how these changes apply to your individual circumstances and ensure you're taking advantage of any reliefs or incentives available to you as a new business owner in the UK.