The UK Budget 2025 was announced today by the Chancellor of the Exchequer. But what will it mean for your Surrey business? Here’s a snapshot of some of the key measures.
From changes to business rates to frozen tax thresholds, everyone will be impacted by the announcement in Parliament.
Key measures impacting small and medium businesses include increases to the minimum wage, changes to tax support for entrepreneurs and mandatory e-invoicing. Extra charges for electric vehicles and high value homes could also impact Surrey residents.
The measures means the UK’s tax take moves to an all-time high ofย 38% of national GDP.
The Office for Budget Responsibility forecasts show UK growth averaging 1.5% a year. Inflation is set to ease from 3.5% in 2025 to 2% by 2027. And unemployment is staying near 5% until 2027 with real household incomes stagnating at around 0.25% annual growth.
Explore the full budget on the UK government website.
Business rates
From 1 April 2026, business rates bills in England will be updated to reflect changes in property values since the last revaluation in 2023.
Changes will include:
- Small business multiplier decreasing from 49.9p in 2025-26 to 43.2p in 2026-27
- Standard multiplier decreasing from 55.5p to 48p
- New high-value business rates multiplier at 50.8p in 2026-27. For properties with rateable values of ยฃ500,000 and 2.8p above the national standard multiplier
- New permanently lower retail, hospitality and leisure multipliers introduced to support high streets. These are 5p lower than the national multipliers.
A package worth ยฃ4.3 billion over the next three years will support businesses as they transition to their new bills.
Full details are on the government’s Budget 2025 tax support for businesses factsheet.
Enterprise
- Pension contributions – From April 2029, the government will charge employee and employer National Insurance on any pension contributions made via salary sacrifice above ยฃ2,000 a year
- Capital gains tax relief halved for bosses selling their businesses to Employee Ownership Trusts from 100% to 50%
- Charity Tax Relief – a new VAT relief introduced from 1 April 2026. Covers business donations of goods to charity.
- UK Listing Relief โ From 27 November, transfers of a companyโs securities will not pay 0.5% Stamp Duty Reserve Tax charge for three years from when the company lists on a UK regulated market.
- Call for Evidence into the tax support for entrepreneurs โ Government seeks views on the effectiveness of the existing tax system for business founders and scaling firms. The aim is to discover how how the UK can better support these companies to start, scale and stay in the country. Closing on 28 February 2026.
Regulation and licensing
- Extra support for the availability and adoption of business gigabit broadband
- New Fair Work Agency to take action against illegal working, breaches of employment rights and tax issues
- Mandating e-invoicing – from April 2029, all VAT invoices to be issued in a specified electronic format.
- First National Licensing Policy Framework launched to support a modern licensing system. Includes guidance to relevant authorities to consider promoting economic growth in licensing decisions.
- Funding for new planners and trading standards officers
Skills and workforce
- National Living Wage and National Minimum Wage increases from April 2026
- National Living Wage will increase by 4.1% to ยฃ12.71 per hour
- National Minimum Wage for 18-20 year olds will increase by 8.5% to ยฃ10.85 per hour
- National Minimum Wage for 16-17 year olds and apprentices will rise by 6.0% to ยฃ8 per hour
- Accommodation offset will increase by 4.1% to ยฃ11.10 per day
- Youth guarantee – Growth and Skills Levy
- ยฃ1.5 billion over the next four years for additional employment and skills support for young people
- Focus on ensuring young people have access to high-quality training opportunities
- include measures to simplify the apprenticeship system
- Youth Guarantee – Jobs Guarantee scheme
- Government to fund six-month paid work placement for every 18 to 21 year old on Universal Credit and looking for work for 18 months
- 100% of employment costs for 25 hours a week at the relevant minimum wage funded, plus wraparound support
- International student levy
- Higher education providers to be charged ยฃ925 per student per year of study. Introduced from August 2028
- Income will be reinvested into higher education and skills. This includes funding maintenance grants for disadvantaged students studying priority courses
- Employer National Insurance contributions (NICs) relief for veterans โ extension of employer NICs relief for employers hiring veterans in their first civilian role to April 2028
UK budget 2025 – other measures
- Tax thresholds will stay frozen until 2031. That is three years longer than previously planned.
- New mileage charge for electric and plug-in hybrid cars from April 2028. Electric car drivers will pay 3p per mile, while plug-in hybrid drivers will pay 1.5p per mile. Rates will go up each year in line with inflation.
- 5p “temporary” cut in fuel duty on petrol and diesel will be extended from April. There will be staged increases from September 2026.
- High Value Council Tax Surcharge for owners of homes worth ยฃ2 million or more in 2026. It’s due to come in from April 2028. A public consultation will be held in early 2026.
- British Business Bank’s new five year strategy to include increasing capital deployment from ยฃ1.5 billion to ยฃ2.5 billion a year
- Expansion of InnovateUKโs BRIDGE AI programme
- ISA reform – From 6 April 2027 the annual ISA cash limit will be set at ยฃ12,000. A further ยฃ8,000 can be invested in stocks.
