Freezing income tax thresholds.
The freeze on income tax thresholds has been extended until 2030/31, meaning more UK workers will be dragged into higher tax brackets as wages rise with inflation. Estimates suggest hundreds of thousands of people will be pushed into paying more tax, increasing their overall burden and reducing take home pay — even when their gross income goes up.
Retail gets a breather, but large stores may yet pay more.
The 2025 Budget reduces business rates for more than 750,000 small and medium-sized retail, hospitality and leisure outlets, a much-needed relief for high street businesses struggling with inflation, competition from large chains, and falling consumer confidence. Markets liked the news too, with retail stocks ticking up after the announcement. But it’s not all sunshine and rainbows: big stores and outlets with high value premises (over £500,000) could face hefty bills under the new surtax. For those businesses, higher operating costs may end up being passed on to consumers through increased prices — so you might want to start collecting those Tesco coupons.
Tariffs! Tarrifs! UK Tariffs!
From 2026, the UK is scrapping the £135 “low-value import” exemption, meaning even cheap parcels from overseas will face customs duties. The move is expected to raise around £500 million a year and support local retailers who’ve long struggled against ultra cheap foreign imports. While it’s positive for UK high-street businesses, it will likely reduce the number of bargains available to shoppers — and could add a little extra pressure to overall inflation.
Budget 2025 bets on startups.
The Autumn Budget expanded tax break schemes for fast growing UK companies. The rules around the EMI share option scheme have been relaxed, which makes it easier for employees to receive equity without facing heavy income tax charges. Investment schemes such as EIS and VCT have also been strengthened, which should make it easier for start ups to raise capital through more attractive terms for investors. For founders and early employees, the message is clear: this is a better time to launch and scale a business. If managed well, these changes could help support growth in the UK economy even in a period of higher taxes.
To round it off.
Rachel Reeves’s 2025 Autumn Budget may leave many households facing higher taxes and tighter financial pressures, but it also offers meaningful support for the smaller businesses that keep the UK economy moving. The protection of local retailers, combined with new incentives for start ups and scale ups, could help revive high streets and position the country more competitively in emerging markets. If these measures take hold, this budget might be remembered not just for its tax hikes, but for laying the groundwork for a stronger and more dynamic UK business landscape.