Experts Discuss: How Businesses Are Responding To Potential Tax Increases In The Autumn Budget

UK businesses are preparing for what possibly could be a tighter financial climate as the government faces a large funding gap ahead of the Autumn Budget. Oxford Economics reported that last year’s deficit has grown by 50%, now reaching around £30 billion. Graeme Hills from Duncan & Toplis said this has prompted speculation about new taxes aimed at wealth and property rather than wages and business profits.

The Chancellor has ruled out spending cuts, leaving tax rises as the main tool to raise funds. Rob Morgan, Chief Analyst at Charles Stanley, said income tax and national insurance may both see adjustments, as they are the most effective ways to raise large sums. The possibility of a 2% increase in income tax balanced with a similar reduction in national insurance has been discussed, which could affect landlords and pensioners more than working taxpayers.

How Could Businesses Be Affected?

Many firms are bracing for higher employment costs if “secondary” national insurance-style contributions are introduced on partnership profits. This would mainly affect sectors where partnerships are common, such as law and healthcare. There are also talks of aligning capital gains tax with income tax, which could reduce returns on business disposals and dampen investment.

Fiscal drag is another quiet pressure point. Freezing tax thresholds until 2028… or even 2030 as some expect, means more people and business owners will gradually move into higher tax bands as wages grow. Hills warned this hidden form of taxation could tighten cash flow, particularly for small and medium-sized enterprises.

What Is Expected On Property And Wealth Taxes?

Both Hills and Morgan noted strong speculation around higher property-based taxation. Proposals being discussed include a 1% levy on homes valued between £2 million and £3 million and 2% above that, as well as a 200% council tax premium on second homes owned by non-UK residents.

This would be politically popular and easy to administer, but businesses tied to property, such as landlords or estate developers, could see costs rise. The government may also consider an “exit tax” on unrealised UK gains for those moving abroad, similar to systems already in the US, Canada and Australia.

How Are Businesses Preparing?

Many owner-managers are reviewing business structures and cash reserves before any announcements. Duncan & Toplis advised companies to assess how possible changes could affect profit extraction, capital gains and property holdings. Hills said early planning helps turn Budget uncertainty into practical preparation.

While the final details are still under wraps until the 26th, businesses are clearly on alert for a Budget that shifts more of the tax load onto wealth and assets, leaving many to rethink their financial strategies ahead of the new fiscal year.

Here’s how experts are responding to a possible rise…

Our Experts:

• Ahmed Harhara, Ph.D., Engineer and Founder, HoustonHomeTools.com
• Jo Varsani and Sanjay Patel, Co-founders, The FSS Group
• Tevin Tobun, Founder & CEO, ROUTD
• Gerard Boon, Managing Director, Boon Brokers
• Andy Fishburn, Managing Director, Virgin StartUp
• Sian Louise, Founder, Obvs Skincare
• Steven Clarke, Founder and CEO, Nuuri

Ahmed Harhara, Ph.D., Engineer and Founder, HoustonHomeTools.com

“As a small business owner and engineer, I think many businesses are responding to potential tax increases the same way they’d handle an infrastructure constraint — by increasing efficiency before costs rise. Instead of cutting staff or scaling back, owners are improving workflows, automating repetitive tasks, and optimizing energy or supply-chain expenses.

“There’s also a psychological shift happening: leaders are becoming more data-minded. They’re running financial models to test “what-if” tax scenarios early, rather than waiting to react after the fact. That proactive approach helps protect margins and maintain growth even when policy changes are uncertain.”

Jo Varsani and Sanjay Patel, Co-founders, The FSS Group

“At The FSS Group, we’re already seeing many businesses in the fleet and logistics sector preparing for potential tax increases in the Autumn Budget. Rising operational costs are already squeezing margins, so even a modest tax rise could have a noticeable impact on investment and staffing decisions.

“Our response has been to focus on efficiency and value — helping clients future-proof their fleets with safety technology that reduces accident costs, insurance claims, and downtime. In times of financial uncertainty, businesses look for practical savings that don’t compromise safety or compliance.

“Like many other firms, we’re being more strategic with spending: delaying non-essential upgrades, negotiating better supplier terms, and reviewing every outlay against ROI. But the message for all businesses is clear — companies can’t simply pause; they need to adapt. If the government wants growth, it must recognise that stability and predictability in taxation are just as critical as innovation.”
 

Tevin Tobun, Founder & CEO, ROUTD

“Higher taxes may strengthen public finances in the short term, but it risks slowing growth if it leads to lower investment and consumer spending, companies may likely slow expansion plans, investing back into their business as they will want to hoard some cash. Companies should take a long term view on how to react to the anticipated budget tax rise, and do what’s right for their organisation.”

Gerard Boon, Managing Director, Boon Brokers

“As the Autumn budget approaches, and Reeves announcements spark further speculation regarding policy changes and targets, it’s becoming increasingly clear that while businesses ‘may’ escape direct tax hikes, it’s almost a certainty that they won’t escape the consequences.

“If there’s one clear message that came from Reeve’s recent speech, it’s that the government are poised to target and increase income tax rates rather than corporate taxes, but that shift in strategy won’t shield or help the economy; it will simply redistribute the strain.

“A rise in income tax will inevitably squeeze disposable incomes. As a result, when people have less money in their pockets, they will naturally look to cut corners, spend less, and that ripple effect will be felt across every high street, service provider and supply chain in the country.

“What compounds this issue further is that the timing couldn’t be worse. With Christmas on the horizon, we’re entering the most critical trading period of the year for many sectors, and instead of a surge in consumer confidence, we’re now facing the likelihood of subdued demand just as retailers, hospitality firms and small businesses rely on the seasonal uplift to balance their books.

“Businesses are already responding with caution. Many are delaying investment, tightening overheads and revisiting staffing plans in anticipation of reduced consumer spending. The irony is that while these measures may protect short-term stability, they also risk slowing growth at a time when the economy desperately needs momentum.

“For the mortgage market, we may see the effects differ slightly. While higher income taxes could make some potential homebuyers more hesitant, we expect to see an offsetting rise in remortgaging activity.

“As managing director of Boon Brokers, I have already anticipated and informed the team that we’re likely to see more borrowers seeking fee-free, whole-of-market advice to save money and improve affordability. In challenging times, financial advice and efficiency become forms of resilience, and households will increasingly look for ways to cut costs without compromising security.

“Ultimately, while the government may claim these changes are necessary to restore fiscal stability, the end-result of this strategy risks dampening demand at the very moment it’s needed most. Businesses cannot operate in isolation from consumers, and when the public feels poorer, the private sector feels it too.”

Andy Fishburn, Managing Director, Virgin StartUp

“There is a gap between the ambition we saw in the government’s recent small business strategy and the lived-experience of UK business founders.

“Small business owners have faced increasingly challenging conditions, with many telling us they had to curtail their growth plans, pause recruitment and invest less in R&D.

“In the summer the government announced its small business strategy aiming to support the business economy by increasing access to funding, supporting high streets and reforming the late payment system as key policy areas. Founders want to see these promises fulfilled, and we hope for a clearer answer from the government as to how it will reignite the entrepreneurial spirit in the UK and support those who want to build the big businesses of tomorrow.”

Sian Louise, Founder, Obvs Skincare

“As a limited company owner I pay myself the bare minimum just to get by. Not because I want to, but because rising taxes leave little choice. It feels like small business owners are being punished for trying to do the right thing and build something sustainable.

What I’d like to see in the Autumn Budget is real tax relief for genuine small businesses, not more headline promises that never reach us. The freeze on income tax thresholds and the overall cost of living mean many founders are stuck choosing between growth and survival. If the government truly wants to back entrepreneurs and revive the high street, they need to stop squeezing the people actually keeping it alive.”

Steven Clarke, Founder and CEO, Nuuri

“As an early-stage founder, the rising cost of hiring, particularly through higher National Insurance contributions, is a real concern. Startups like ours should be encouraged to grow teams here in the UK, not be priced into hiring overseas, remote staff. We should be attracting talent to work in UK startups and small businesses, not discouraging them with some of the highest income tax burdens in Europe.

“Through our platform Nuuri, I also see how vital childcare is to the wider economy. Affordable, thriving nurseries enable parents to return to work and ensure our children get the best quality early years education. This Budget should recognise childcare as core economic infrastructure, rather than a business sector, and incentivise accordingly to enhance the wider economy.”