Chancellor John Healey has delivered his first Budget, promising to ease the pressure on households and businesses while keeping the public finances under control.
Here are the key points from today’s announcement:
Energy bills: some breathing space
The government is extending the removal of VAT on domestic electricity bills until July 2027. In addition, it’s scrapping the standing charge on household gas bills. Around 20 million households in council tax bands A to D will also receive a £100 energy payment.
These measures are designed to ease pressure on household finances – the much publicised “breathing space”. However, businesses should not assume they will receive the same support. Energy remains a significant overhead for many firms, making it important to review contracts and monitor running costs.
Business rates: welcome relief for some
The threshold for business rates relief is increasing from £12,000 to £18,000, with the government saying this will mean around half of shops, restaurants and gyms pay no business rates.
Employment costs: minimum wage rises
The National Minimum Wage and National Living Wage are set to increase by 3.9%.
For employees, higher wages are welcome. For employers, particularly small businesses already juggling tight margins, the increase means an additional payroll cost.
Now is a good time to review your staffing costs, pricing and cash flow forecasts. A little forward planning could make the difference between absorbing the increase comfortably and feeling the squeeze.
Fuel duty: freeze continues
The freeze on fuel duty is being extended until July 2027, alongside the existing 5p-per-litre discount.
This offers some protection for businesses that rely on vehicles, however prices continue to be influenced by global events.
Savings and investment: ISA allowance stays at £20,000
The planned reduction in the annual cash ISA allowance has been scrapped. The tax-free allowance will remain at £20,000, and the government intends to develop a new Starter ISA to encourage first-time investors.
What should you do next?
The Budget brings targeted support, but it doesn’t remove the need for careful financial planning. Changes to wages, operating costs and tax rules can affect businesses differently depending on their size, structure and circumstances.
‘At re:accounts Chartered Accountants, we believe good accountancy and tax efficiency involves far more than simply meeting deadlines,’ says Emily Bridges, founder of the Stevenage-based accountancy practice. ‘It’s about being proactive, helping you make confident decisions and getting ahead of the changes that affect you and your business.’
If you’re unsure what the Autumn Budget means for your company or personal finances, get in touch with our friendly team for a chat. We’ll help you understand the changes, identify any opportunities and work out what you should do next.
