{"id":43551,"date":"2025-11-17T15:29:20","date_gmt":"2025-11-17T15:29:20","guid":{"rendered":"https:\/\/www.simplybusiness.co.uk\/?post_type=knowledge&p=43551"},"modified":"2025-11-17T15:29:22","modified_gmt":"2025-11-17T15:29:22","slug":"5-things-to-look-out-for-in-the-autumn-budget-2025","status":"publish","type":"knowledge","link":"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-news\/5-things-to-look-out-for-in-the-autumn-budget-2025\/","title":{"rendered":"5 things to look out for in the Autumn Budget"},"content":{"rendered":"\n

The Autumn Budget takes place on 26 November and will reveal the government’s plans to raise tax revenue after an economically sluggish 2025. And how the \u00a330bn gap in the public finances could be filled. <\/p>\n\n\n\n

Speculation is growing about whether or not the government will ditch their manifesto pledges or find another way to get more financial headroom. Speaking ahead of the Autumn Budget, Chancellor Rachel Reeves said: \u201cThose with the broadest shoulders should pay their fair share of tax\u201d. <\/p>\n\n\n\n

Does this mean businesses will be hit hardest or will the government look elsewhere to raise much-needed revenue? Here are five areas business owners should look out for in the Autumn Budget.   <\/p>\n\n\n\n

1. A potential income tax rise?\u00a0<\/h2>\n\n\n\n

Raising income tax is something the government ruled out in their 2024 manifesto. And after strongly considering<\/a> an income tax rise, the latest speculation suggests the Chancellor has decided against a direct rise<\/a>.<\/p>\n\n\n\n

Raising the basic rate of income tax by one per cent (to 21 per cent) could raise an additional \u00a38.6bn. This would cost \u2018working people\u2019 an estimated \u00a3377 a year<\/a> each, while hitting top rate tax payers even harder.  <\/p>\n\n\n\n

That\u2019s why it seems more likely that the government will freeze income tax thresholds. Freezing the thresholds is a \u2018stealth tax\u2019, which results in more people being dragged into higher tax bands due to inflation.<\/p>\n\n\n\n

A report from Resolution Foundation<\/a>, a living standards think tank, suggested a tax strategy the government could still consider. A rise in income tax, but with a cut in employee National Insurance contributions to offset the rise. <\/p>\n\n\n\n

This could be seen as an easier political move for the government, as working people wouldn\u2019t feel the effects of a tax rise while it would still generate \u00a36bn in additional tax revenue. <\/p>\n\n\n\n

But this solution could disproportionately affect the self-employed.<\/p>\n\n\n\n

2. Employee National Insurance cut could hurt self-employed\u00a0<\/h2>\n\n\n\n

If the government cuts employee National Insurance contributions to offset other tax rises this could mean higher taxes for the self-employed. <\/p>\n\n\n\n

This is because the self-employed\u2019s National Insurance contributions<\/a> are paid through Class 2 or Class 4 at a different rate. So if the self-employed pay a higher rate of income tax without a reduction in National Insurance, their taxes will go up.\u00a0<\/p>\n\n\n\n

Look out for changes to National Insurance in the Budget, as they may affect your business even if the rates don’t change. <\/p>\n\n\n\n

3. Dividends tax-free limit could be cut further\u00a0<\/h2>\n\n\n\n

Many small business owners incorporate their business and take a small salary (to use up their personal allowance and minimise National Insurance). They then take the rest of their income as dividends. So, a rise in the dividend tax rate would directly increase personal tax bills for these business owners.<\/p>\n\n\n\n

It’s being speculated the government is proposing to increase dividend tax rates, which were last increased by 1.25 percentage points in 2022. The current rates that affect dividends are:<\/p>\n\n\n\n