The countdown is on for the Government’s Autumn Budget address on Wednesday 26 November, when all eyes will turn to the Chancellor for insight into the UK’s economic and fiscal direction. Set against ongoing financial pressures and a shifting political landscape, this Budget is expected to bring measures with potential implications for both businesses and individuals. Our expert tax team highlight the key considerations.
Business Tax
While the Chancellor’s final announcements remain under wraps, here are some of the measures reportedly under consideration:
- Income Tax increase – although a break from the Labour manifesto, the Chancellor may find there is limited choices available and therefore reintroduce a top rate of 50% for high earners.
- VAT reform – including potential scope expansion or tighter compliance rules that could disproportionately affect smaller businesses.
- Targeted tax changes – particularly for groups such as landlords, where the Treasury sees scope for additional revenue.
- Capital Gains Tax (CGT) adjustments – possibly aligning rates or thresholds, especially in light of recent moves on Inheritance Tax (IHT). This could have direct implications for founders contemplating a sale or succession.
Whilst these developments suggest a Budget that could significantly reshape the business tax landscape; tax increases may be balanced with some targeted tax reliefs for businesses. This may include the extension of the Business Asset Disposal Relief or the reintroduction of some form of taper relief to reward long-term business owners.
Strategic Planning Starts Now
Business owners should be asking themselves the following questions:
- How should value be extracted from the business – via dividends, salary, or alternative mechanisms?
- Is now the right time to restructure, sell, or initiate succession planning?
- Will current business structures remain optimal in a post-Budget environment?
Early preparation is key. Understanding your options now will put your business in the best position to react.
Timing is Everything
Budgets bring both risk and opportunity, once the rules change, the window to act often closes quickly.
That’s why assessing your options is essential. While acting on speculation can be risky, preparing for multiple outcomes ensures that you are ready and not reactive.
Chancellor’s pre-Budget speech
In a rare move, Chancellor Rachel Reeves delivered a pre-Budget speech on 4 November, intended to set the scene for the Autumn Budget. However, rather than providing clarity, the address has left many business leaders and individuals grappling with greater uncertainty.
While the Chancellor outlined broad priorities – protecting the NHS, reducing national debt, and easing the cost of living – she stopped short of detailing specific fiscal measures. Instead, she signalled that “tough but fair” decisions are coming, and that tax rises are likely inevitable to address a growing fiscal shortfall.
This has fuelled speculation that Labour may break its 2024 manifesto pledge not to raise Income Tax, VAT, or National Insurance for working people.
Reeves refused to rule out increases to any of these taxes, stating only that the Budget would be guided by the government’s values of “fairness and opportunity”.
The Chancellor’s emphasis on “context” rather than concrete policy has left many in limbo. While the intention may have been to prepare the ground for difficult decisions, the lack of specifics has instead
created speculation and concern.
The Need For Certainty
What business leaders and individuals need most right now is certainty. In an environment already shaped by volatile supply chains, high borrowing costs, and geopolitical instability, the ability to plan with
confidence is critical. Unfortunately, this speech has done little to provide that.
Instead, it has highlighted the scale of the challenge ahead – and the likelihood that the government will need to make politically difficult choices to meet its fiscal rules.
While we await the full Budget on 26 November, you may want to consider carrying out the following:
- Stress-test financial plans against potential tax increases or changes to reliefs.
- Review employment structures, particularly where salary sacrifice or pension contributions may be affected.
- Speak to your usual Ensors contact to model different scenarios and prepare for a range of outcomes.
- Stay informed – the next few weeks will be critical in shaping the fiscal and regulatory landscape for 2026 and beyond
IHT changes and the importance of succession planning
The 2024 Autumn Budget introduced significant changes to two of the key Inheritance Tax (IHT) reliefs with effect from 6 April 2026. Despite strong lobbying from the rural sector in particular, the Government
made no change or softening in the 2025 Spring Statement.
What’s Changing?
Agricultural property relief (APR) and Business Property Relief (BPR) will change so that, rather than the current unlimited levels of relief on qualifying disposals, 100% relief will only be available on the first £1m of value, with anything beyond that only receiving 50% relief. Additionally, relief for Alternative Investment Market (AIM) shares will be restricted to 50%.
While it will still be important to ensure that you can benefit from these reliefs, those who had assumed that no IHT would be payable will have to take advice to consider how to mitigate the potential tax charge, particularly where their estate will not have sufficient liquidity to pay the tax.
Similarly, it was also announced that there would be changes to the inclusion of pensions in estates for inheritance tax purposes. From 6 April 2027, any unused pension savings and death benefits may be included within the value of a person’s estate for inheritance tax purposes. For many people, these changes to tax on assets could mean that their estate exceeds their nil rate band (NRB) for the first time. This will lead to more business assets being susceptible to IHT.
Importance of Planning
Just as a business plan is used to create, fund, run and expand an organisation, a strategy needs to be put in place to enable succession. In our experience, when a business is a key component of family wealth the owner usually has a strong desire to preserve it in one form or another. As such, planning ahead is a key element and is essential when considering passing on management and ownership to your children or other family members.
The current state of ownership succession planning among family businesses is decidedly mixed. About two-thirds of family business owners report a good understanding of the amount of estate taxes due
upon their deaths, but about one in five have no estate planning at all. More than one in three junior generation family business members have no knowledge of their senior generation’s transfer plans.
Here are the most common ownership succession planning issues that you should seek to address:
- Overlooking important details when tax or estate planning.
- Planning without taking into account the current legislative landscape.
- The need to create a 5-10 year plan to see you into retirement and a successful business exit whether sale, liquidation or passing on to children.
- Leaving the business to the surviving spouse.
- The challenge of treating children equitably.
The changes to Inheritance Tax and pension rules, along with the complexities of succession planning, highlight the importance of proactive estate and business planning. With careful preparation, you can navigate these challenges and ensure a smooth transition for both your finances and your business.
