Autumn Statement 2025 | Expert Insights
Response on Stealth Tax Rises
One of the most important messages for SMEs from this year’s Budget sits between the lines: the freeze on Income Tax and NIC thresholds until 2030/31. Although the Chancellor avoided increasing the main tax rates, the extended freeze means many business owners and their teams will still see their overall tax bills rise. For SMEs, this has two clear effects. First, employment costs will continue to rise as more staff drift into higher tax brackets, putting additional pressure on wage expectations at a time when margins are already tight. Second, many owner-managers will find more of their own income taxed at higher rates, reducing the net benefit of extracting profits from the business. This sits alongside a further shift towards taxing non-labour income. Dividend, savings and property income will all see a 2% rate increase over the coming years. For SMEs where dividends form part of the remuneration strategy, this narrows the gap between salary and dividends and will require a fresh look at extraction planning.
Gordon W Buist
Partner EQ Accountants
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