Autumn Budget 2025: what will Rachel Reeves deliver for SMEs?

The Autumn Budget 2025 is officially set for Wednesday, November 26th, and SMEs across the country are anxiously waiting to find out what will be announced.

Last year’s Budget was a particularly bad one for small businesses with the announcement of a rise in employer National Insurance Contributions and a drop in business rates relief for retail, leisure, and hospitality. Sadly, this year’s statement could be similarly sour.

It will mark the end to a difficult year for SMEs, who have had high inflation, hiked taxes, and digital transitions to contend with. In July, the government’s Small Business Plan provided some hope in the form of further funding and powers to tackle late payments.

Aman Parmar, Head of Marketing at SME flexible workspace provider BizSpace, praised the plan, but added “without targeted tax relief measures – such as enhanced capital allowances – SMEs may struggle to invest in growth.”

What will happen on Autumn Budget day?

The Autumn Budget is an annual event where the Chancellor, Rachel Reeves, will outline the UK government’s plans for public spending, taxation, and economic policy.

Traditionally, the Budget is delivered in the House of Commons and lasts around an hour, usually following Prime Minister’s Questions (PMQs).

You can tune into the Budget live on the BBC Parliament channel, as well as online via the UK Government’s official channels.

Ahead of the announcement, experts are speculating that the Chancellor will choose tax rises over borrowing. After her proposed welfare bill cuts were watered down in July, she will need to raise about £20bn.

Possible measures under consideration include a new National Insurance charge for landlords, changes to inheritance tax, and adjustments to the VAT threshold, though the specifics remain uncertain.

What’s likely on the table for SMEs?

SMEs are anticipating some level of financial relief to be announced in the Autumn Budget. Possible measures might include investment in infrastructure, funding for digital transformation, energy cost relief, and much-awaited business rates reforms.

Regarding business rates, Labour has previously pledged to permanently lower tax rates for retail, hospitality, and leisure (RHL) properties with rateable values below £500,000 in 2026.

Parmar argues that the current business rates system is “outdated and disproportionately burdensome, especially for retailers and hospitality businesses still struggling post-pandemic.

“If Reeves can align her proposals with a reform of business rates that eases this burden, it would demonstrate a significant commitment to supporting the SME sector”, he adds.

Other circulating possibilities include a rise in the National Minimum Wage, anticipated changes under the Employment Rights Bill, and a potential increase in Capital Gains Tax.

What do small businesses want?

Many UK founders are calling for a rollback of the recent hikes in employer National Insurance contributions (NICs) and a commitment not to raise taxes further.

Tony Redondo, Founder at Newquay-based Cosmos Currency Exchange, echoed this sentiment, saying that the Chancellor should, “Recognise the economy is on its knees and don’t bury it completely with yet more tax rises.

“We need to promote economic growth, which means encouraging businesses, not tying them up in ever more taxes and red tape.”

Industry groups such as UKHospitality have compiled a similar list of requests. It includes urgent reform to business rates and employer NIC rates, as well as a lower rate for VAT for the industry, as already demonstrated by many EU countries.

However, a ban on tax rises is unlikely given the current economic pressure. While calls for relief are warranted, with the government under strong pressure to increase revenues, SME owners who expect a generous Budget will no-doubt be disappointed.