On Wednesday 26 November, Chancellor of the Exchequer Rachel Reeves delivered the 2025 Autumn Budget. But what impact will the changes have on SMEs across the South East? We asked local business leaders, along with legal, financial and property experts, for their reactions.
David Ramsay, partner and head of planning at Vail Williams, which has bases in Crawley and Brighton
“From a planning perspective, the Budget reinforces the government’s ambition to deliver the ‘most ambitious’ planning reforms in a generation, with the forthcoming Planning and Infrastructure Bill positioned as the key vehicle to unlock new housing and critical infrastructure once it becomes law.
“It’s positive to see measures aimed at accelerating housing delivery, including proposals for councils to notify government before rejecting major housing schemes. In principle, this should help ensure that significant applications receive proper, balanced consideration at committee level rather than being driven by localised objections or NIMBY pressure.
“The intention to work with the Judiciary to reduce delays in Judicial Reviews is also welcome, as quicker legal processes would support faster delivery across the system.
“However, the Budget also underscores an ongoing challenge: planning reform will only succeed if local planning departments are properly resourced. The £48 million announced to boost capacity, including funding for 350 additional planners, expansion of the Pathways to Planning Graduate Scheme and a new Planning Careers Hub, is a step in the right direction, but sustained investment will be needed.
“Proposals to streamline statutory consultees must be handled with care. Cutting out consultees risks storing up problems later; improvements should focus instead on realistic deadlines, better-resourced teams and consistent, high-quality responses.
“The commitment to confirm new town locations by Spring 2026 signals a welcome intention to plan strategically and at scale. Meanwhile, the acceleration of AI-driven planning reforms could offer real benefits if implemented responsibly and transparently.
“Overall, today’s announcements continue the right conversations, but delivering 1.5 million homes will require more than policy statements. True progress depends on investment, capacity and consistent implementation across the planning system.”
Nicola Brown, partner and employment law specialist at Mayo Wynne Baxter
“The announcement of another increase to the National Minimum Wage from April 2026 will inevitably create challenges for some employers.
“For many businesses, higher wages can put pressure on already tight margins, particularly in sectors like retail, hospitality and care, which rely heavily on minimum wage roles. In some cases, we may see that pressure ultimately leading to recruitment freezes or even redundancies.
“Some people have also expressed concerns about the 8.5% rise for 18 to 20 year olds and whether this might deter businesses from taking a chance on younger people at a time when many of them are struggling to find work. However, the government has said that it wants to move towards eventually having the same rate for all adults in future.
“I recommend employers start to plan now, including forecasting how this change might affect pricing and staffing levels. Increases in people’s wages at the bottom end can often trigger expectations of rises further up the scale, which can add to the financial burden.”
Simon Warne, private client tax partner at Crowe UK
“Rachel Reeves’ second Budget was delivered against the constraints of politically important manifesto pledges and intense lobbying by businesses and their workers. Long-term low GDP growth, a stagnant housing market and persistent moderate inflation have left many business owners and workers feeling that they are treading water, at best.
“The significant rise in Employer National Insurance, which became active last April, has had an indirect but undeniably adverse impact on new entrants to the job market and also on those at the lower end of the income scale as employers sought to moderate the profit impact of increased employment costs.
“Ms Reeves decided that on this occasion she would, in the short-term, tax family and owner-managed business by a number of measures, but including raising the dividend tax rates by 2% for basic and higher-rate payers (to 10.75% and 35.75% respectively) from April 2026. These increases will be keenly felt by many FOMB owners who tend to live on small salaries, topped up by lightly taxed dividend income.
“Back in 2015/16, basic-rate payers did not pay any tax at all on dividends, following the logic that corporation tax had already been paid on company profits and there was no need for ‘double taxation’. That logic has since been eroded and many family and owner-managed businesses will now be re-examining their income extraction strategies in the light of the changes announced.
“In the medium term, restrict National Insurance relief for pension savings over £2,000 made by salary sacrifice schemes from April 2029. These changes will increase future employment costs and will act a disincentive to pension saving for those on median earnings and above – but at least the increases are deferred.
“In the longer term, raise income tax on earners but defer some pain by extending the personal allowances freeze for a further three years to 2030/31. This ‘stealth tax’ measure relies on more workers being gradually pulled into higher rates on static real-terms income.
“As home budgets come under pressure, employers will be pressured towards higher wages. By the time the measure comes to fruition, the personal allowance set by the coalition government will have been frozen for nine years and 4% inflation will have eroded its worth to some 50% of its original value.
“The rise in the National Living Wage from April 2026 will also affect cost structures, particularly for businesses with large support or operational teams. Combined with ongoing inflationary pressures, these changes highlight the importance of reviewing workforce planning.
“For our sector, the message is clear: planning ahead matters more than ever. Businesses may need to review long-term cash flow forecasts to stay competitive. Understanding the impact of the budget changes early allows organisations to make informed decisions rather than reacting under pressure.”
Josh Mellor, planning director at Marrons
“From a South East perspective, the announcement of an additional £891m of public funding for the Lower Thames Crossing, linking Kent and Essex, is an important step in unlocking growth across the Thames Estuary. This will be welcomed by businesses in the region and demonstrates a clear commitment to regional economic growth.
“More broadly, the budget reaffirms the government’s intention to speed up the planning system and make it easier to deliver new homes. The aspiration to recruit more planners is particularly welcome – while there will be a lag before this makes a tangible difference, it is a positive step in acknowledging and addressing the challenges in the planning system.”
Peter Turk, senior associate in Corporate at Knights
“The announcement that capital gains tax relief on disposals to Employee Ownership Trusts (EOTs) will be reduced from 100% to 50% marks a significant shift.
“EOTs were introduced to promote diversity and engagement in the UK economy, so curbing measures that support employee ownership may seem counterintuitive. That said, instances of abuse have occurred, and so reform is not entirely unanticipated.
“Since they were introduced, EOTs have become an increasingly popular succession route for owner-managed businesses, offering stability for businesses and rewarding employees.
“While there is no doubt this change will affect their attractiveness, even at 50% the relief is still substantial compared to other exit strategies.
“Our advice has always been that EOTs only work when driven by a genuine belief in employee ownership as a platform for growth – not simply tax savings. We therefore expect EOTs will continue to be an attractive option for many sellers.”
James Ashton, CEO of Quoted Companies Alliance
“The QCA welcomes today’s measures that support investment and entrepreneurship. ISA reforms are a welcome step towards encouraging wider retail participation in UK public markets. A simpler system can channel more savings into UK growth companies across the regions, supporting local jobs and driving long-term wealth creation.
“The QCA welcomes the expansion of EMI, EIS and VCTs. This is a positive step that will boost investment in early-stage and scaling companies, helping them access the capital they need to grow.
“The QCA welcomes the stamp duty holiday for newly listed companies. This is a practical measure that can encourage more companies to list, improve market liquidity and support London’s position as a leading capital market.”
Paul Lavercombe, head of tax for BDO in the South East
“The lead-up to this Budget has felt painfully long and, at times, rather chaotic. After months of speculation, kite flying, pitch rolling and U-turns, it’s a relief to finally have some clarity on the way ahead for tax – even if the changes may be painful.
“Businesses can now start to plan with more confidence, and we hope that the removal of some of the uncertainty will provide a much-needed boost to the economy.
“The announcement of permanently lower business rates for over 750,000 retail, hospitality and leisure properties will be a welcome relief for UK business, especially when combined with proposed cuts to energy prices under the British Industrial Competitiveness Scheme (BICS). However, businesses will need to hold on until April 2027 to reap the full benefits of these measures.
“Another fillip was the extension of the Enterprise Management Incentive share option scheme to larger businesses. Originally created in 2000 to help businesses reward senior staff in growing businesses, from April 2026, those with up to 500 employees and less than £120 million in gross assets will be able to benefit from the scheme.
“With pervasive skill gaps across the UK, the Chancellor’s decision to fully fund SME apprenticeships for eligible people under 25 will no doubt be equally welcomed.
“While there are certainly positives for some businesses, it hasn’t all been good news. Despite recent positive changes for tax relief on capital expenditure, the reduction in main rate writing down allowances is disappointing, particularly when many were expecting reliefs to be enhanced and even extended to intangible assets.
“By increasing taxes on individuals, the chancellor is taking money out of the economy, which could suppress the growth prospects, particularly for consumer-focused businesses.
“The changes to salary sacrifice schemes announced today will also add significant costs to some businesses, who will be hit by higher employer national insurance bills. It may also reduce the amounts that some employers are willing to contribute to their employees’ pension schemes, reducing worker benefits and making it harder to recruit and retain staff.
“Similarly, the newly announced National Minimum Wage rates, while going some way to address cost-of-living pressures for low earners, will make it more expensive to employ new staff, particularly those between 18-20.
“With increased overheads and above inflation increases across the board, hospitality and retail will be hard hit, and the Chancellor risks offsetting her own measures designed to help young people into work.”
Alex Davies, CEO of Wealth Cub, a broker of Venture Capital Trusts (VCTs)
“In the Budget, the Chancellor announced that she would be reforming the UK’s venture capital schemes, allowing the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs) to invest more money in more mature businesses. That was straight off the Venture Capital Trust Association’s wish list.
“What the Chancellor failed to mention, but was hidden in the Budget documents, was that she would also be cutting the income tax relief available on VCTs from 30% to 20% from April 2026.
“We’ve seen the effect of cutting income tax relief on VCTs before. When VCT income tax relief was cut from 40% to 30% in 2006/07, funds raised by VCTs fell 65% year-on-year.
2026/27 will be no different, with smaller companies facing a drought in funding in the years ahead.
“However, it also means that we expect this year to be a bumper one for VCT investment. Investors will likely pile in before the end-of-year deadline, and popular VCTs will fill up even faster than usual. It really will be a case of “buy now while stocks last.
“While it might not achieve the Chancellor’s goal of ‘incentivising funds to seek out higher returns, to ensure they are targeting the highest growth companies’, it will be a great case study in behavioural economics.”
Richard Bond, owner of Finest Retreats, on the Budget’s impact on Brighton’s tourism sector
“The past few months of speculation have been paralysing. Property owners have postponed making investment and refurbishment decisions, so we’re looking forward to being able to get back to business now that the circus is over.
“While the high-value council tax surcharge won’t apply to holiday lets on business rates, the 2% increase in income tax for property owners is a disappointing break of the manifesto pledge and penalises those who have built up their pension savings in property.
“The introduction of England’s visitor levy adds further disappointment. These changes may encourage more property owners to use limited companies as the 25% corporation tax rate is lower than the new higher income tax rates.”
Natasha Guerra, founder of Runway East
“Once again, Rachel Reeves has claimed to be on the side of startups, whilst revealing she doesn’t understand them. The decision to treat flexible and serviced offices as one large property rather than multiple smaller units means startups face higher costs. The business plans being written by aspiring founders across the UK just got more expensive.
“It’s simple – fast-growing businesses choose flexible workspaces over traditional leases. But now changes to business rates mean they’ll no longer get Small Business Rates Relief if they work in a flexible space.
“Our spaces are not classed as individual offices, and we cannot apply small business rates relief for the businesses we host because our flexible workspace is treated as a single unit. We will have no choice but to pass this cost on, making flexible workspaces more expensive for SMEs to access – at the very time when getting people back into high-quality offices is critical for driving productivity.
“Access to flexible workspace, which is generally more affordable than committing to a single unit, has never been more important for SMEs, especially as the cost of space in our cities continues to soar and when businesses want to get people back into the office.
“I’d like to finish by saying most of all I’m just glad this is over, and next time, can we not spend half the year talking about the Budget and creating uncertainty, please.”
Ashley Weight, co-founder of ShuttersUp
“Whilst the chancellor is purporting to be championing innovation and backing entrepreneurs with measures such as widening the eligibility for the enterprise management incentive (EMIs), she is giving with one hand and taking with the other.
“Adding further pressure and costs on businesses through increasing the minimum wage, increasing the rate of tax on dividends and slashing the rate on writing down allowances (WDAs) risks stalling employment and potentially forcing companies to raise prices.
“SMEs, in particular, bear the brunt of tax and wage increases. We operate on far tighter margins than large corporates, yet SMEs account for three-fifths of UK private-sector employment and around half of its turnover.
“Many SMEs depend on funding to grow and scale, and additional taxes only discourage investment. That slows growth and, ultimately, harms the wider economy.
“On a positive note, the announcement to make the training for under-25-year-old apprentices completely free for SMEs is welcome news and will create more opportunities to help encourage the younger generation into the construction industry. The Youth Guarantee is also positive news for youngsters. However, they will need to earn more than they would on benefits in order for it to be successful.”
“After months of speculation, which has stalled the property market, clarity on the proposed mansion tax and council tax surcharge should allow activity to resume. However, the combination of frozen income tax thresholds for another three years and a new annual council tax surcharge will inevitably reduce disposable income.
“With households tightening their budgets, less money will circulate through the economy. A supportive and predictable tax environment is essential for strengthening homeowner confidence. When confidence grows, investment in homes follows, which inevitably benefits the economy.”
Nikki Petken, partner in the Corporate & Commercial team at SA Law
“The Budget aims to send a clear signal that the UK is open for business and investing. By permanently lowering business-rate multipliers for high-street retail, hospitality and leisure (RHL) properties, and offering transitional relief for 2025/26, it gives SMEs and smaller firms greater certainty and breathing space to plan ahead.
“Entrepreneurs and fast-growing firms are being given targeted support. Expanding enterprise tax incentives and a three-year stamp duty exemption for new listings looks to make scaling in the UK easier, while encouraging investors to back homegrown talent.
“For corporate clients, the message is clear: invest in your business, invest in green infrastructure, and you could reap the benefits. Whilst these incentives are targeted at plant and machinery to EV chargepoints and for certain sectors, these are real opportunities to save on costs while building for the future.
“Overall, this budget reflects a pragmatic, growth-focused approach. Whilst the lead up to its announcement has been controversial, there is a risk that the wins for SME’s will be overlooked. It lowers costs where many small firms are most exposed, encourages investment and infrastructure upgrades, and supports firms seeking to scale or raise capital.
“On the other hand, it is closing loopholes for a few and increasing certain costs on businesses, in order to balance the need for fiscal stability and broader tax reforms.”
Jonathan Turner, partner at Morr & Co, where he specialises in property law
“Like the monster under the bed, the prospect of Mansion Tax or High Value Council Tax Surcharge from April 2028 is unwelcome, but less terrifying when you know whether it is really there and what it looks like.
“This recurring annual charge for properties over £2m has been widely anticipated and has been lurking since the Corbyn years. The charge seems to assume that those owning a £2m plus home are wealthy. Sure, they appear asset-rich, but does that mean they have the means to pay such a charge?
“There are several important questions to consider, all of which doesn’t seem to have been considered yet, but will be ‘subject to consultation’, including, presumably, the following:
“If the house is mortgaged up to the hilt, does it still apply? Or does it apply to properties with £2m plus equity? If the latter, then will people be taking out mortgages to keep it under the threshold?
“How will the valuation be agreed, given properties at this end of the market are often unique, with a lack of comparable value evidence? There will be plenty which are plus or minus £100k of the £2m threshold, which will certainly invite disputes.
“How will the charge be enforced? What if the homeowner doesn’t have the cash to pay it? Can it be deferred? Charged on the property? What are the penalties?
“This tax will trigger a surge in downsizing, which will saturate the market with valuable properties. In turn, this will likely depress values overall, thus decreasing the ‘mansion tax’ income to the government.
“The OBR Report suggests that this ‘mansion tax’ will raise £400m in 2029-30, and it adds that behavioural changes could diminish the tax receipts as ‘band bunching’ occurs.
“This not only reduces the actual likely yield, but by suppressing prices also reduces likely SDLT and CGT receipts. Together with the costs of non-compliance and appeals, receipts are likely to suffer even further.
“Given the likely cost of the consultation itself, not to mention the presumably substantial cost of the huge apparatus set up to administer it, one has to wonder whether the cost-benefit analysis stacks up.
“A lot of effort for little reward and a tax that is highly likely to be immediately thrown out by any subsequent Conservative government.”
Greg Vincent, head of Corporate and Commercial at Morr & Co
“The government’s move to cut EOT capital gains relief to 50% is a classic example of short-termism dressed up as fiscal discipline. EOTs are not tax loopholes – they are engines of productivity and engagement that keep value inside the business and, ultimately, inside the PAYE system.
“They reduce absenteeism, improve retention and give employees a direct stake in long-term performance. Crucially, they prevent wealth from leaking out through the more creative tax strategies.
“By eroding the incentive, the government risks weakening a model that has consistently supported succession and delivered cleaner, transparent ongoing tax flows. It’s a false economy and one that the UK may feel for years.
