The latest Autumn Budget announcement in November 2025 contained mixed news for business owners, with its primary focus on raising revenues rather than offering broad tax cuts.
For Gloucestershire’s owner-managed and small businesses, the main changes from this year's budget are that higher operating costs are ahead – along with some targeted reliefs – signposting a clear signal that careful business planning is going to matter more than ever.
What did the Autumn Budget say about rising wage and employment costs for SMEs?
From April 2026, the National Living Wage for workers aged 21 and above will rise to £12.71 per hour. Zoe Martin, tax partner at Cheltenham accountancy and tax firm Bishop Fleming, said: 'Younger workers will see meaningful increases and for sectors like hospitality, retail and care services, this represents a significant jump in the wage bill.'
The new £2,000 cap on pension salary-sacrifice arrangements from 2029 will, additionally, 'make it harder for employers and directors to use this mechanism to manage tax and National Insurance costs', according to Zoe.
'Businesses that rely on salary sacrifice for staff benefits will need to re-evaluate these schemes.'
What did the Autumn Budget say about tax increases on business owners of SMEs?
Zoe says that 'owners who extract profits through dividends will see the tax rate rise by two percentage points from April 2026.
'Combined with income tax thresholds being frozen until 2031, more business owners will drift into higher tax bands over time, a phenomenon known as 'fiscal drag'.'
Zoe goes on to say that for many Gloucestershire entrepreneurs who pay themselves a mix of salary and dividends, this will reduce post-tax income and could affect cashflow planning.
What did the Autumn Budget say about premises and property for SMEs?
Changes to business rates from April 2026 look to offer 'some help for consumer-facing businesses, with relief available for many retail, hospitality and leisure premises', which Zoe calls 'a welcome development for high streets across the county'.
However, the new Supporting Small Business Relief from 1 April 2026 is less generous than its predecessor (particularly for pubs), and businesses operating from larger commercial premises, industrial units or warehouses may face higher rates. Zoe's recommendation is that businesses should model these costs early.
What did the Autumn Budget say about employee incentives and ownership for SMEs?
The chancellor has widened access to Enterprise Management Incentive (EMI) share schemes, making it easier for growing companies to reward and retain key staff.
However, Zoe highlights that tax advantages linked to Employee Ownership Trusts (EOTs) are being tightened, which may influence longer-term succession planning.
What should small and medium-sized businesses do now?
Bishop Fleming says that it's important that Gloucestershire SMEs start planning ahead of the major changes landing in April 2026.
Key actions to tick off in early 2026 include: reviewing wage budgets and pricing strategies; reassessing remuneration and pension-salary-sacrifice arrangements; revisiting dividend strategies for directors and shareholders; checking eligibility for business-rates relief; evaluating EMI or share-option plans for recruitment and retention; and updating cashflow and tax forecasts for the next 12 to 24 months.
Zoe said: 'It's a more demanding landscape, but it's manageable with planning. While the Budget increases the tax burden on business owners and raises operating costs, early preparation can help Gloucestershire companies stay competitive.
'By reviewing staffing, remuneration and premises strategies now, businesses will be better positioned for the new environment that begins in 2026.'
For help with the changes coming in 2026, contact the team at Bishop Fleming Cheltenham on 0333 321 9000, or visit bishopfleming.co.uk.
