What does the Autumn Budget really mean for small business owners?

The latest Autumn Budget brings a mixed bag (or briefcase…) of cost pressures and strategic opportunities for small businesses.

Higher wages, rising dividend taxes and tougher Corporation Tax penalties will all affect small businesses. But there’s good news too: lower business rates and fully-funded apprenticeships for under-25s.

The minimum wage for 18 to 20-year-olds will go up from £10 to £10.85 fromApril 2026, while the living wage will go up from £12.21 to £12.71. This lifts earnings for workers to help with the cost of living but raises payroll costs for small business employers across many sectors, including hospitality, retail and healthcare.

The Autumn Budget brings a change to dividend, savings and property income tax rates. They’ll all rise by +2 percentage points from April 2026, potentially making it less attractive to invest money into your own business:

• The basic dividend tax rate rises from 8.75% to 10.75%
• The higher dividend rate rises from 33.75% to 35.75%
• The additional dividend rate and £500 dividend allowance remain unchanged

Then in 2027, the government will introduce new, higher property income tax bands, meaning owner-managers who rely on dividends or rental income will see higher personal tax bills.

Yes. Lower business rates for retail, hospitality and leisure properties, which will be funded by higher business rates on properties worth over £500,000 like large warehouses used by online retail giants.

Tax thresholds will stay fixed until April 2031. By this time, the income tax thresholds will have been frozen for almost a decade. Even though headline rates don’t rise, more income will fall into higher tax bands over time, increasing the tax burden for many.

The Autumn Budget expands investment in training and revises apprenticeship rules, including fully funded SME apprenticeships for eligible under-25s. This aims to reduce hiring costs for smaller businesses while improving workforce skills.

The Government say this package, worth over £725 million, will help not only bring young people into work, but also benefit small business owners across the UK. It’s often hard for small businesses to employ those without the necessary skills, as it’s time and budget-intensive to train someone new, compared to hiring someone with existing skills. But this new scheme will enable SMEs to invest and upskill a new generation of workers.

Despite repeated calls from small business owners, the Budget leaves VAT thresholds and corporation tax untouched. For many SMEs, these are the pain points that affect cash flow and competitiveness, proving that stability doesn’t always mean relief.

We asked our CEO, Tom Platt, what he thought of the Autumn Budget and how it’ll impact small business owners. Here’s what he had to say:

“Small business owners are forced to navigate rising costs, shifting rules and tougher penalties and are often spending more time managing these issues than doing what they love. There are some welcome steps in this Budget but the overall picture is still challenging for anyone trying to build something on their own.

That’s why being smart with your money isn’t optional anymore — it’s essential. And it’s where tools like Countingup can make a real difference. When your money, tax and accounting work together, you can see what you’re owed, what you can claim and where you can make savings before it becomes an issue. Keeping more of your money shouldn’t be complicated and we’re working hard to make sure it isn’t.”

If you want to stay on top of these changes and make sure your business is keeping more of what it earns, now’s the time to get smart with your business finances. Smart business current account apps like Countingup help you track your finances in one place, claim what tax allowances you’re entitled to and save money, so you can take home more of what’s yours.