The UK Autumn Budget 2025 has shaped up to be one of the most consequential fiscal announcements in recent years. With inflation stabilising, growth still subdued, and the government under heavy pressure to balance fiscal responsibility with economic support, this Budget introduces significant changes for businesses, employers, investors, and accountants.
Whether you run an SME, advise clients as an accountant, or manage a multinational business, several reforms will directly affect your tax planning, capital expenditure decisions, payroll strategy, and compliance processes in 2025–26.
This detailed guide summarises the most important updates while explaining what actions businesses should be taking right now.
The headline corporation tax rate remains unchanged at 25%, maintaining stability for businesses.
However, the bigger developments lie in capital allowances, with changes that affect how companies plan investments.
1.1 Writing-Down Allowances (WDA) Reduced
From April 2026, writing-down allowances on the main pool will reduce from 18% to 14%.
This effectively slows down tax relief on plant and machinery over the life of the assets.
1.2 New 40% First-Year Allowance (FYA) Introduced
From 1 January 2026, businesses can claim a 40% First-Year Allowance on eligible main-rate plant and machinery.
This accelerates tax relief upfront — a major win for capital-intensive industries.
Business Impact
The merged R&D scheme, introduced under Finance Act 2024, will continue unchanged — combining SME and RDEC elements into a simplified framework.
Key points
Business & Accountant Impact
Labour costs will rise for many businesses due to adjustments in National Insurance Contributions (NICs) and pension-related rules.
3.1 Employer NIC Rates Adjusted
NIC thresholds have been frozen again, and effective contribution burdens are rising for employers as wages increase.
3.2 Pension Salary Sacrifice Reforms
The government is tightening rules around salary-sacrifice pension schemes, reducing the tax arbitrage benefit for high earners.
Business Impact
One of the most technical but high-impact areas of change is the shift in multinational taxation, particularly:
4.1 Under-Taxed Profits Rule (UTPR) Now Effective
This is part of the OECD Pillar 2 framework — ensuring global minimum taxation of multinational companies.
Large groups may face:
4.2 Reforms to Intangible Asset Regime
Changes to amortisation and relief rules for intangible assets (IP, patents, software, goodwill) will affect tech and IP-heavy companies.
4.3 Transfer Pricing Documentation Requirements Tightened
MNEs must maintain:
Failure to comply may attract penalties.
Business Impact
The UK is moving toward simplified reporting, especially for small and micro-entities.
Key features:
Why this matters:
The government has been vocal about reducing the tax gap.
This means:
Accountants should prepare clients well in advance and maintain evidence for all material claims.
✔ Re-evaluate Capital Expenditure Timing
With FYAs arriving and WDAs decreasing, timing purchases strategically can save taxes.
✔ Review Payroll Costs
In view of rising NIC burdens, businesses should:
Consider restructuring pay packages
Explore allowable benefits
Optimize salary sacrifice where still beneficial
✔ Strengthen R&D Processes
Ensure documentation is:
Contemporaneous
Technical
HMRC-aligned
✔ Ensure Transfer Pricing Compliance
For multinational entities:
Benchmark intercompany pricing
Update group documentation
Prepare for top-up taxes under UTPR
✔ Stay Ahead on Filing Deadlines
Avoid penalties by digitising compliance workflows.
For accounting firms, this Budget presents an opportunity:
More advisory revenue
Clients will need help with:
More outsourcing potential
Many SMEs lack the capacity to manage:
This opens the door for outsourcing (including offshore service providers) to step in with cost-effective expertise.
