A Complete Guide to Autumn Budget Tax Changes 2025 for Business Owners

Published by Farazia Gillani posted in Taxes on 9 December 2025

The Autumn Budget 2025 introduces major tax, investment and regulatory measures that will impact businesses across the UK. The government confirmed permanent business rates cuts for retail, hospitality and leisure, a new five-tier multiplier system, long-term relief for film studios, and substantial incentives for electric vehicles and charging infrastructure. It also announced enhanced capital allowances, wider investment schemes for high-growth companies, and significant VAT and customs changes that will reshape business planning over the coming years.

The Impact Of Budget 2025 On Businesses In UK

Permanent Business Rates Cuts for Retail, Hospitality and Leisure (RHL) Properties

Wider relief for RHL sectors

From April 2026, the government will permanently reduce business rates for properties in the retail, hospitality and leisure sectors. Two new, lower tax multipliers will apply to RHL properties with rateable values under £500,000. This creates a significant tax cut of nearly £900 million per year, benefiting more than 750,000 RHL premises.

Unlike the temporary pandemic-era relief, which had annual caps, these reduced rates are permanent and uncapped. This provides long-term certainty. Small shops, restaurants and leisure venues will have their bills calculated using a far lower multiplier than the standard rate.

Transitional support package

To prevent sudden increases for those facing higher bills after the 2026 revaluation, the government has introduced a £4.3 billion support package. The redesigned Transitional Relief scheme caps annual bill increases for those hit by large valuation rises.
For 2026–27, increases are capped at:

5% for small properties (up to £20k RV, or £28k in London).
15% for mid-sized properties, with higher caps for larger sites.

Additional protections apply to businesses losing other reliefs, such as Small Business Rates Relief and temporary RHL discounts. Sectors such as pubs and hotels, which face big post-COVID valuation uplifts, will have their increases moderated. The RHL sector bill will rise by only ~4% next year instead of ~45% without intervention.

In summary, RHL businesses get a permanent tax cut, plus temporary support to absorb revaluation spikes.

New Five-Tier Business Rates Multiplier System (from April 2026)

Historically, England had two business rate multipliers (standard and small business). From April 2026, this will expand to five separate multipliers. The system now distinguishes RHL properties from non-RHL properties and adds a premium for very large sites.

The new categories are:

Small Business Non-RHL Multiplier – for non-RHL properties with RV under £51,000.
Small Business RHL Multiplier – for RHL properties with RV under £51,000.
Standard Non-RHL Multiplier – for commercial properties with RV £51,000 to £499,999.
Standard RHL Multiplier – for RHL properties within the same RV band.
High-Value Property Multiplier – a surcharge for all properties with RV ≥ £500,000 (the top 1% of sites).

Draft multipliers for 2026–27 illustrate the shift:

Small RHL properties: ~38.2p per £1 of value.
Small non-RHL properties: ~43.2p.
Standard RHL properties: 43.0p.
Standard non-RHL properties: 48.0p.
High-value sites: ~50.8p, which is 2.8p above the standard rate.

The higher rate on large properties (e.g., major warehouses, flagship stores) partly funds the RHL sector tax cuts.

Smaller High Street businesses get the lowest business rates in decades, while high-value commercial properties contribute more. The five-tier system creates a more graduated and fairer structure.

Film Studio Relief – 40% Rate Cut Extended to 2034

The government will extend the 40% business rates reduction for eligible film studios in England until 2034. The relief applies to properties assessed by the Valuation Office Agency as “film studios,” with around 40 studios nationwide qualifying. The relief is backdated to 1 April 2024 and will run for ten years. Studios will see their business rates bills cut by nearly half.

This long-term measure is designed to support the film and TV production industry, stabilise operating costs, and attract major productions to the UK. The extension aligns with other sector incentives, such as film tax credits.

The measure has been assessed under the UK subsidy control regime and approved as compliant.

Electric Vehicle (EV) Support and Incentives

The government has committed nearly £2 billion to accelerate the transition to electric vehicles. This support includes charging infrastructure, tax reliefs and consumer incentives.

100% business rates relief for EV infrastructure

For the next 10 years, any eligible electric vehicle charging point or EV-only forecourt will pay no business rates on those installations. This applies from 2024 to 2034. Removing rates liability encourages rapid expansion of public and commercial charging networks.

Investment in charging network

The government will inject:

An additional £100 million into public EV charging infrastructure.
A further £100 million to local authorities and public bodies to train staff and speed up installation processes.

These funds build on the existing £400 million already committed. They will help expand the ~87,000 public charge-points currently available.

Extended electric car purchase incentives

To boost EV adoption, the Electric Car Grant receives a £1.3 billion top-up and is extended to 2029–30. Buyers can receive up to £3,750 off new EVs. The government also extends 100% first-year capital allowances for zero-emission cars and charge-point equipment until at least March 2027. Together, these measures aim to reduce cost barriers and create strong growth in the EV market.

Investment Incentives: Capital Allowances Boost

To stimulate business investment in plant and machinery, the Budget introduces more generous capital allowance rules from 2026.

40% First-Year Allowance (FYA)

Businesses will be able to deduct 40% of the cost of qualifying main-rate plant and machinery in the year of purchase. This applies to expenditure from 1 January 2026 onward.
Unlike full expensing (which applies only to companies and limited asset classes), the 40% FYA will also apply to:

Unincorporated businesses.
Leased equipment.

This provides strong upfront tax savings.

Annual Investment Allowance (AIA) maintained at £1 million

The AIA remains permanently at £1 million. Most SMEs can deduct the entire cost of qualifying plant and machinery up to this amount immediately.

Writing-Down Allowance (WDA) reduced to 14%

The annual WDA for main-rate plant and machinery will fall from 18% to 14% for expenditure after April 2026. However, much less expenditure will fall into this pool because of the broader availability of immediate reliefs.

Overall, the new regime encourages early investment while still allowing eventual full tax relief on all qualifying expenditure.

Support for Entrepreneurs and Fast-Growing Firms

Expanded Enterprise Investment Scheme (EIS)

From April 2026, investment limits under the EIS will double:

Individuals can invest up to £10 million per year, or £20 million for knowledge-intensive companies.
Lifetime limits for companies increase to £24 million, or £40 million for knowledge-intensive companies.

In parallel, Venture Capital Trusts (VCTs) will remain available, but the up-front tax relief for new VCT investments falls from 30% to 20%.This change is designed to encourage investors to use EIS more actively while keeping VCTs viable. Knowledge-intensive company thresholds rise, allowing later-stage firms to qualify.

From April 2026, the Enterprise Management Incentive (EMI) scheme becomes available to larger companies:

Gross assets limit increases from £30 million to £120 million.
Employee count limit increases from 250 to 500.
The EMI option pool doubles from £3 million to £6 million.
Employees will have 15 years (instead of 10) to exercise options.

This allows fast-growing companies to use equity incentives for longer, improving retention and recruitment.

Stamp Duty relief for new stock exchange listings

A three-year Stamp Duty Reserve Tax (SDRT) exemption applies to newly listed companies.

The exemption applies to all trades in the company’s shares (and certain securities) for three years after listing. This measure reduces transaction costs, increases liquidity, and encourages companies to choose UK exchanges. It applies to new listings from 27 November 2025 onwards.

VAT and Customs Updates

“Taxi Tax” – Ride-hailing removed from TOMS

From 2 January 2026, private hire vehicle and taxi operators will be excluded from the Tour Operators’ Margin Scheme (TOMS). Some app-based operators had argued they qualified as “travel agents,” allowing VAT to be paid only on their margin. A court ruling in 2025 supported this interpretation.

The Budget ends this. PHV and taxi services will now incur the standard 20% VAT on the full fare, except when bundled with other travel services. This restores equal treatment with traditional taxi services and raises substantial revenue.

Ending the £135 low-value import duty exemption

The government will abolish the customs duty waiver for imports under £135 by March 2029 at the latest. All imported goods will be subject to tariffs under the UK Global Tariff schedule, regardless of value. This closes a loophole that allowed overseas sellers to avoid duties on small parcels. The change supports UK retailers and aligns the UK with international moves (for example, the EU ending its €150 threshold by 2026). A consultation on implementation is underway.

How Apex Accountants Can Help Your Business Respond to the 2025 Autumn Budget Tax Changes

The Autumn Budget 2025 brings some of the most significant tax and compliance changes in years. Many businesses will benefit from lower business rates, stronger investment incentives and clearer VAT rules. Others will face new reporting demands, higher operating costs or tighter cash flow. At Apex Accountants, we help you prepare early and use these changes to strengthen your financial position.

We offer full support across every area affected by the budget. Our team reviews how each measure applies to your business, calculates the financial impact and builds a clear action plan. We break down complex rules into simple, practical steps you can take immediately. We also help you adjust forecasts, budgets and capital plans so you can manage risk and make stronger decisions.

Our dedicated advisors support clients in retail, hospitality, leisure, manufacturing, construction, creative industries, logistics, property, tech and professional services. We give each business sector-specific guidance and produce tailored scenario planning based on your operations.

If you would like personalised guidance on the impact of budget 2025 on businesses, get in touch with Apex Accountants today. Our team is ready to help you plan ahead, manage your obligations and take advantage of every available opportunity.

Final Summary

The Autumn Budget 2025 introduces major and long-lasting changes across business rates, investment incentives, creative industry reliefs, EV support, customs rules and VAT reforms.
Retail, hospitality and leisure businesses gain permanent rate reductions. A new five-tier multiplier system reshapes how commercial properties are taxed. Film studios get a decade of relief. EV infrastructure becomes effectively tax-free. Capital allowances become more generous. Entrepreneurs benefit from expanded schemes and IPO-related tax relief. Ride-hailing VAT rules are clarified. The low-value import exemption ends. These measures will shape business planning from 2026 onwards.