What the Autumn Budget 2025 means for small-business owners & the self-employed
On November 26th, 2025, Rachel Reeves, Chancellor of the Exchequer, outlined the government’s tax and spending plans for 2026. Reeves shared how this Budget aims to boost trade, increase investment, champion innovation, and back working people.
To help you navigate the Budget as a small-business owner or self-employed individual, we have put together a simplified guide of what may affect you.
Minimum wage increase
Ahead of the 2025 Autumn Budget, Reeves had announced Labour’s plans to increase minimum wage – this increase in minimum wage is set to affect the running costs of small businesses with employees. As of April 2026, those 21 and over will see their wages increase from £12.21 to £12.71 an hour, workers aged 18-20 will see an increase from £10 to £10.85, and 16–17-year-olds and apprentices will see an increase from £7.55 to £8 an hour.
Income tax and National Insurance thresholds
There were no increases in Income Tax and National Insurance; however, it was announced that the threshold freeze will now remain in place until 2030/31, instead of the 2028/29 deadline announced in last year’s budget. This freeze may only affect people who have seen an increase in their minimum wage and will now have to pay a higher tax rate.
Apprenticeships
After thanking the Federation of Small Businesses and Small Business Britain for their representation of apprenticeships, Reeves announced that funding for apprenticeships for under-25s will now be completely free for small-to-medium enterprises to help tackle rising youth inactivity. This initiative is in addition to the new Youth Guarantee funding which aims to give young people more opportunities.
Business rates
More than 750,000 retail, hospitality and leisure properties will now have permanent lower tax rates, with small and standard retail, hospitality and leisure properties now paying the lowest tax rates since 1990/91 and 2010/11, respectively. Properties worth more than £500,000 will now face higher tax rates to cover the lower rates for retail, hospitality and leisure – with a £4.3 billion support package available for businesses hit hardest by revaluations in April 2026.
State pension increase
The state pension will see an increase of 4.8%, the equivalent of a £440 increase per year for the basic state pension and an increase of £575 per year for the new state pension. Reeves stated how this is in line with Labour’s commitment to the triple lock – Money Helper explains the triple lock is the system which defines how much the state pension is increased annually.
Salary sacrifice pension contributions
As of April 2029, salary-sacrificed pension contributions above an annual threshold of £2,000 will no longer be exempt from National Insurance. This may mean that any businesses who have been able to offer a salary-sacrifice pension scheme could experience higher running costs and may have to reconsider offering this employee benefit.
Construction Industry Scheme fraud
The Budget also included plans to create legislation to amend the Finance Act 2004 – the changes aim to contribute to reducing tax losses caused by exploitation of the Construction Industry Scheme. The new proposals will mean that firms will face penalties if they are aware of supply-chain fraud before they enter transactions.
For more details about the budget, please find the official Government publication, here.
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Please note: This article provides guidance for information purposes only. It should not be relied upon wholly when making or taking important business decisions – always seek the services of an appropriately qualified professional. The views expressed by websites referenced to are limited to those of the websites, and do not necessarily reflect the views of Markel Direct. Markel Direct is not affiliated with any of the brands, companies or websites mentioned in this article.