Autumn Budget 2025 and how it affects small businesses – Small Business UK

Chancellor Rachel Reeves is announcing the 2025 Autumn Budget – a fiscal event with a rocky build-up that’s taking place later than the Budget normally does.

We’ll be live blogging the announcement, with a summary and reactions from experts in the small business world.

Firstly, it seems that the Budget details have been released early by an OBR report which has been published due to a ‘technical error’.

According to the OBR, inflation is expected to reach 3.5 per cent this year. That’s higher than the estimate of 3.2 per cent. Real GDP is set to grow by 1.5 per cent on average over the forecast.

Autumn Budget 2025 and what it means for small businesses

Minimum wage increase

Reeves has confirmed that Minimum Wage for workers over the age of 21 will rise to £12.71 in April 2026, a 50p increase on the current figure. Those aged 18-20 will get 85p per hour extra, going up to £10.85 per hour. The rate for under 18s and apprentices will be going up by 45p to £8 per hour.

Employers paying the Real Living Wage will have to increase staff pay to £13.45 per hour for outside London (an 85p rise) and £14.80 per hour for those in London (a 95p rise). They have until May 1 2026 to enact the rise but are advised to do so as soon as possible.

What’s more, there are still changes to come in the imminent Employment Rights Bill, which is in its final stages.

Employment Rights Bill – what’s in the legislation? – We take a look at Labour’s Employment Rights Bill and how the business community has reacted to the measures

Salary sacrifice pension contributions

The OBR document says that salary sacrificed pension contributions above the £2,000 threshold will not be exempt from National Insurance. It will be introduced in April 2029.

Electric vehicle tax to be introduced

The OBR report speaks of “a new mileage-based charge on electric and plug-in hybrid cars from April 2028 at around half the fuel duty rate paid by drivers of petrol cars (raising £1.4bn).”

‘Milkshake tax’

The sugar tax is being extended to the likes of mass-produced and imported milkshakes and lattes. ‘Open cup’ drinks prepared in cafés and bars, including your customers’ morning lattes, are exempt. If you use plain cows’ milk or no-sugar-added alternatives, they’re also exempt. However, if you sell pre-packaged sugary milk drinks, then those are included in the tax.

The threshold for the sugar tax is being reduced from 5g to 4.5g sugar per 100ml. Businesses will have until January 1, 2028 to reduce sugar in their drinks.

Fuel Duty frozen

Fuel Duty seems to be frozen until September 2026.

Frozen train fares

Regulated train fares (including season tickets and some off-peak returns) in England are to be frozen until March 2027.

Autumn Budget 2025 live blog

12.

12.35: Rachel Reeves starts her statement. OBR takes full responsibility for error.

12.31: House confirms that OBR document leak was a major incident.

More on the Autumn Budget 2025

Autumn Budget 2025 predictions – what’s in it for small business owners? – As Autumn Budget 2025 comes ever closer, we take a look at the latest predictions and how they could affect small businesses