What the 2025 Autumn Statement means for your business

Every Autumn Statement brings a mix of headline grabbers and quiet technical changes that actually affect how much tax you pay. The 2025 statement was no different. Some of the announcements were widely covered in the press — but the details matter, and the devil is always in the detail when it comes to tax.

Here is a straightforward breakdown of what was announced, what it means in practice, and what you should be thinking about before April.

Corporation Tax — rates held, but thresholds matter

The headline corporation tax rates have not changed for 2025/26. The small profits rate remains at 19% for companies with profits up to £50,000, and the main rate stays at 25% for profits above £250,000. Companies falling between those thresholds pay an effective marginal rate through a mechanism called marginal relief.

Profit Band	Rate	Notes
Up to £50,000	19%	Small profits rate
£50,001 – £250,000	19–25% (marginal)	Marginal relief applies
Above £250,000	25%	Main rate

What to watch out for

If your profits sit in the marginal relief band, tax planning becomes genuinely worthwhile. Pension contributions, capital expenditure timing, and director remuneration structuring can all affect where your profit lands. It is worth reviewing this before your year end, not after.

Employer National Insurance — the change that hurts most

This is the one that has had the biggest practical impact on small businesses. From April 2025, employer NIC rates increased from 13.8% to 15%, and the threshold at which employers start paying NIC dropped from £9,100 to £5,000 per employee per year.

The effect of that lower threshold is significant. Previously, employers paid nothing on the first £9,100 of each employee's salary. Now they start paying NIC from £5,000. For a business with five employees on average salaries, that change alone adds roughly £1,000 to £1,500 in annual NIC costs — before the rate increase even factors in.

The Employment Allowance offset

The Employment Allowance — which reduces your employer NIC bill — increased to £10,500 per year. For small businesses with a modest payroll, this will offset much or all of the increase. But for businesses above the allowance threshold, or those with larger teams, the net position is worse than before.

Pros and cons for small business owners

• Pro: The higher Employment Allowance provides meaningful relief for micro-businesses and sole director companies
• Con: The lower NIC threshold means part-time and lower-paid staff now attract employer NIC where they previously did not
• Con: Businesses with multiple employees above the Employment Allowance cap face a genuine increase in staffing costs
• Watch out for: Connected companies and sole director companies — eligibility rules for the Employment Allowance changed and some previously eligible companies are now excluded

Income Tax thresholds — frozen again

Income tax thresholds remain frozen until 2028. The personal allowance stays at £12,570 and the higher rate threshold at £50,270. While this is not a new announcement, it is worth flagging: freezing thresholds while wages rise is effectively a tax increase, known as fiscal drag.

If your salary or drawings have increased since 2021, you may now be paying tax at a higher rate on more of your income than you were before — even if the rates themselves have not changed. For directors reviewing their salary and dividend split, this is relevant context.

Capital Gains Tax — rates went up

The main Capital Gains Tax rates increased in the October 2024 Budget and those changes carried through into 2025/26. The lower rate on non-residential assets moved from 10% to 18%, and the higher rate from 20% to 24%. Residential property rates remain at 18% and 24% respectively.

Business Asset Disposal Relief (formerly Entrepreneurs' Relief) also saw its lifetime limit remain at £1 million, but the rate increased from 10% to 14% in 2025/26, with a further rise to 18% planned for 2026/27. If you are considering selling your business or any qualifying business assets, the timing of that decision now has meaningful tax consequences.

What you should be doing before April

1. Review your director salary and dividend split in light of the employer NIC changes and frozen income tax thresholds
2. Check your Employment Allowance eligibility — rules changed and some companies that previously qualified no longer do
3. Consider your year-end position if your profits sit in the corporation tax marginal relief band
4. Plan ahead on any capital disposals given the CGT rate trajectory
5. Review your payroll structure — the lower NIC threshold may affect how you handle lower-paid or part-time staff

This article is for general information purposes and does not constitute tax advice. Tax rules can change and individual circumstances vary. Please speak to a qualified accountant before making financial decisions.