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The Labour Party’s Chancellor John Healey delivered his first Autumn Budget yesterday and as finance experts we know it can be a lot to digest. With changes to tax relief, wages and business rates, there are a few key announcements worth understanding and considering as part of your plans for the year ahead.
We've picked out the main points that could affect UK businesses.
The OBR expects UK growth of 1.2% this year, slowing to 1% next year before recovering to 1.6% in 2028 and 1.8% in 2029. For business owners, the message is that next year is likely to feel a bit tighter before conditions start to improve, which makes access to flexible finance solutions and cashflow more important than usual.
If you're thinking about investing in new equipment or machinery, the Budget has introduced changes to how some businesses can claim tax relief on those purchases1.
From 1 January 2027, the First-Year Allowance is increasing from 40% to 50% for qualifying investments. In simple terms, eligible businesses will be able to deduct a larger proportion of the cost from their taxable profits in the first year.
Full expensing will also remain available for qualifying company investments, allowing eligible companies to deduct 100% of the cost of qualifying equipment from their taxable profits in the year of purchase.
At the same time, the main rate of writing-down allowance is falling from 14% to 12% from April 2027. This affects the rate at which tax relief is claimed over time on qualifying assets that remain in the main capital allowances pool.
What does this mean for your business? If you're planning to buy equipment, replace machinery or invest in expanding your operations, it's worth reviewing the available tax relief before deciding. The rules depend on the type of asset, your business structure and when you incur the expenditure.
The National Living Wage and the National Minimum Wage will rise by 3.9% from April 20272 to £13.21 an hour, while the rate for workers aged 18 to 20 will increase to £11.27.
For employers, the impact may extend beyond the hourly rate itself. Businesses with larger workforces or a high proportion of employees on minimum wage rates may need to review staffing budgets, pricing and recruitment plans.
It is a good opportunity to look at your overall employment costs and make sure your forecasts reflect the new rates before they take effect.
For businesses operating from commercial premises, business rates can be a significant part of the monthly overheads3. From April 2027, the threshold for 100% Small Business Rates Relief is increasing from a rateable value of £12,000 to £18,000 for qualifying properties. The threshold for tapered relief is also increasing, from £15,000 to £21,000.
The government expects around 70,000 additional retail, hospitality and leisure businesses to pay no business rates as a result. If you run a shop, café, restaurant or another eligible business, it's worth checking your property's rateable value and whether you qualify. The relief has eligibility conditions, so not every small business will automatically benefit.
The Budget has announced a further 2 percentage point increase in tax rates on property income from 6 April 2027. This means the rates will be 24% for basic-rate taxpayers, 44% for higher-rate taxpayers and 49% for additional-rate taxpayers. For business owners with property investments, this could reduce the income they keep after tax. It is worth reviewing your property income forecasts and considering how the change may affect your wider financial plans.
The Chancellor announced that HMRC will get extra funding and power to collect unpaid tax. Tax officers could be allowed to take money directly from your current and savings accounts if you don’t pay. Overdue tax is now a major enforcement priority.
We can support with self-assessment, corporation tax and VAT bills by providing cashflow loans that enable you to pay on time whilst spreading the cost and at a fixed rate.
So, what does this mean for your business?
It's looking likely that we can expect to see growth forecast slow down next year before it starts to recover, so it might be worth considering what this might look like for your business and think about arranging flexible finance solutions that can support your cashflow – solutions such as revolving credit facilities, invoice finance, and cashflow loans can help you start to spread the cost of some of your investments and maintain a steady cashflow within the business for day to day operations.
We can have a no obligation chat with you to understand how flexible finance solutions could help and what the best options for your business might be.
References
1Claim capital allowances: Full expensing and 50% first-year allowance - GOV.UK
2Budget 2026 live: UK faces worst decade for household incomes, IFS think tank says - BBC News
Last Updated: October 2026. Version Number: BS2026.11.01.AAB
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