Christie & Co comments on the Autumn Budget 2025

Here are some of the key takeaways that will impact businesses across the country...

ECONOMY  

• The Budget will raise taxes by £26 billion by 2029-30 and bring the tax take to an all-time high of 38% of GDP in 2030/31
• GDP will grow by 1.5% in 2025, the OBR forecasts - above the 1% that was expected earlier this year. But, from then on, the outlook is downgraded from what the fiscal watchdog projected in March:
  • In 2026, the economy is now expected to expand by 1.4%, below a previous forecast of 1.9%
  • In 2027, GDP is estimated to expand by 1.6%, against March's estimate of 1.8%
  • In 2028, GDP is forecast to rise by 1.5%. In March, the OBR believed it would increase by 1.7%
  • In 2029, the economy will expand by 1.5%, not 1.8% as previously thought

BUSINESS & TAX 

• Relief from Capital Gains Tax on business sales to employee ownership trusts will be reduced from 100% to 50%
• The writing down allowance main rate in corporation tax will aim to raise £1.5 billion
• A package of regulatory changes will be introduced, as called for by UK Hospitality and the British Retail Consortium, with a new national licensing framework to encourage councils to back pubs and late-night venues
• Permanently lower business rates for over 750,000 retail, hospitality and leisure properties – the lowest rates since 1991 – paid for through higher rates on properties worth more than £500,000. This will include warehouses used by online retailers
• Business rates retention pilots will be extended in the West of England, Liverpool and Cornwall until 2029
• The introduction of digital IDs will break the link between illegal migration and working, and HMRC and the Fair Working agency aim to crack down on illicit businesses on high streets
• Funding for under-25 apprenticeships to be free for small and medium-sized enterprises
• Reform to motoring taxes, with an annual EV duty of 3p per mile for EVs and 1.5p for plug-in hybrids
• Increased threshold for expensive car supplement for EVs to £50,000. An additional £1.3 billion will be provided for the EV car grant, which will be extended to 2030 to support EV purchases
• Fuel duty to be frozen until 2026 – petrol forecourts to be mandated to share real-time pricing through the new Fuel Finder scheme, followed by staged increases from 2026
• £200 million to accelerate the roll-out of EV charging and 100% business rates relief for EV charge points for the next decade
• Gambling tax reform – increasing remote gaming duty from 21% to 40% and online betting from 15% to 25%. However, no changes to in-person gambling or horse racing, and bingo duty to be abolished from April 2026
• The so-called ‘Milkshake tax’ will extend the sugar tax to milk-based drinks like milkshakes and coffees from 2028
• Tobacco and alcohol duty to rise in line with inflation – a new vaping product duty tax is planned as a flat tax rate of £2.20 per 10 millilitres in 2026
• The government will widen eligibility for enterprise incentives, to enable more companies to offer tax-relieved share options, and reengineer enterprise investment and venture capital trust schemes to stay with companies as they grow
• UK listings relief will provide a three-year exemption from stamp duty reserve tax for companies that choose to list in the UK

WAGES & PERSONAL FINANCE

• From April 2027, the ISA system will be reformed. Keeping the £20,000 limit, with £8,000 ringfenced for investments. Over 65s will retain the full cash allowance of £20,000
• The state pension in April will rise by 4.8% in line with average wages, which means the new flat-rate state pension - for those who reached state pension age after April 2016 - will increase to £241.30 a week, or £12,547.60 a year, a rise of £574.60
• From April 2029, pension savings made through salary sacrifice will be capped at £2,000 a year, with any excess taxed
• The thresholds at which people pay Income Tax and National Insurance will be frozen until the end of the 2030/31 financial year
• Minimum Wage to rise. Workers aged 18 to 20 will get a bigger increase of 8.5%, to £10.85 an hour, and 16 and 17-year-olds will receive a 6% increase to £8 an hour
• National Living Wage to rise from £12.21 to £12.71 per hour
• Household gas and electricity costs will be lowered through cuts to green levies on energy bills, with £150 cut from the average household’s energy bill from April 2026

PROPERTY

• There will be an increase in the basic and higher rate of tax on property savings and dividend income by 2%
• From 2028, the high-value council tax surcharge in England is to rise to £2,500 for properties over £2 million, and £7,500 for properties over £5 million
• New skills offer to improve planning capacity and efficiency
• Phasing out the use of hotels to house asylum seekers entirely

OTHER

• The two-child benefit cap is to be fully lifted from April 2026, lifting 450,000 children out of poverty
• £5 million for libraries in secondary schools and £18 million to improve and upgrade playgrounds across England
• £300 million investment in healthcare technology to improve patient service, and 250 new neighbourhood health centres to be created, with over 100 to take place by 2030
• Prescription charges frozen at £9.90 per prescription
• £13 billion flexible funding for seven mayors, putting money back into the hands of local and regional leaders. Specific funds for devolved governments, including an additional £370 million for the Northern Ireland executive, £505 million for the Welsh Government and £820 million for the Scottish Government

Read what our experts have to say in response...   

Commenting on the pharmacy sector, Jonathan Board, Head of Pharmacy at Christie & Co, said, "The continued impact of last year’s National Living Wage increase and the additional 1.2% rise in employers' National Insurance contributions continues to weigh heavily on pharmacy contractors, and today’s Budget has provided them little relief – with single prescription costs freezing at £9.90 being positive for patients, it does nothing to address the rising operational costs for pharmacies. Against the backdrop of tax and wage rises, a sustainable funding settlement is now more critical than ever to help pharmacies recover from years of real-term cuts while absorbing these mounting cost pressures."

Commenting on the hotel sector, Carine Bonnejean, Managing Director – Hotels at Christie & Co, said, “The Budget introduces permanently lower business rates for hospitality properties from April 2026, helping to ease cost pressures for small and mid-sized hotels with a rateable value under £500,000. However, larger sites may face higher rates. Coupled with the further increases of 4.1% in National Living Wage and 8.5% in Minimum Wage for 18–20-year-olds, operational margins will be squeezed even further. The downgraded GDP forecast combined with frozen income tax and NI thresholds until 2030 will dampen demand growth in the short to medium term.

“The effective tax burden on hotel stays has increased as local authorities in England now have the option to introduce an overnight visitor levy, similar to European city taxes, in addition to an unchanged VAT rate despite sector lobbying. If implemented this could dampen domestic and inbound travel demand particularly for regional hotels and conference destinations.

“However the Bank of England is expected to gradually ease interest rates, which could help financing and development costs over time with softer borrowing costs.

“The phasing out of government contracts will lead to more mid-market inventory coming back to supply, as well as the creation of a capex bubble which some owners won’t be up for, thus leading to additional supply of investment opportunities.

“It is a mixed outcome for the hotel industry, with further pressure on both topline and bottom line. More than ever, strategic planning around pricing, staffing, and operational efficiency, including technology and AI adoption, will be critical to maintain profitability.”

Commenting on the childcare and education sector, Courteney Donaldson, Managing Director – Childcare & Education at Christie & Co, said, “Today's Budget falls amidst ongoing repercussions of the Autumn Budget in 2024 - not least BADR tax rates rising from 10% to 14% in April this year, and the impending increase to 18% on 6 April 2026 - which has fuelled day nursery owners to sell their businesses off the back of tax hikes and in further anticipation of tax rises.

“The above-inflation minimum wage increase, while beneficial for young people and low-income earners, could create further significant financial pressure for childcare and education businesses. Absorbing these higher wage costs, alongside rising operational expenses, will challenge margins and financial sustainability, when, for some, financial stability is already stretched.

“For day nursery businesses, the Government has pledged that early education funding from April will account for cost-of-living increases and minimum wage rises. Given that the Government is the primary purchaser of early education, it is critical that funding accurately reflects escalating operational costs to ensure providers remain financially sustainable.

“The Chancellor's announcement to remove the two-child benefit cap, meaning larger families can claim more means-tested benefits, is very much welcomed. In creating equity for families, we would encourage the Government to go further and step towards a universal childcare offer, enabling parents in education and/or training to be able to access 30 hours of early years entitlement funding.”

Commenting on the retail sector, Steve Rodell, Managing Director - Retail & Leisure at Christie & Co, said: “One of the biggest impacts from this Budget will be the reduction in relief from 100% to 50% of any capital gain on the sale of a business. This will effectively penalise some entrepreneurs who have worked, quite often for much of their lives, to build up a business, creating opportunity for employees and contributing taxes to the economy.

“The rise in National Living Wage and Minimum Wage will be a burden on many retailers, and the freeze in Income Tax threshold means that many will start paying more tax as salaries increase.

“However, the news that the tax on bingo will be abolished from April 2026 is promising for the bingo industry.

“It was announced that electric vehicle drivers will now pay three pence a mile in road tax. At least this levels the playing field for non-EV drivers, but if anything is a disincentive to owning an EV.  If you drive 12,000 miles in your EV, you'll pay £360 pounds in tax.

“Fuel duty is frozen until September 2026, which is good short-term news for the forecourt industry, albeit temporary. The Fuel Finder scheme referred to by Rachel Reeves has been coming for a while and will only add administrative burden to fuel retailers when there are already a variety of private apps that display local fuel pricing.

“In an attempt to help small businesses, business rates will reduce for smaller premises and increase for larger ones – this is likely to disadvantage supermarkets but benefit convenience retailers.”

Commenting on the pub and restaurant sectors, Stephen Owens, Managing Director - Pubs & Restaurants at Christie & Co, said, “Overall, there was little to cheer about from the Chancellor’s Budget so far as pubs and restaurants are concerned. Whilst the plans to introduce permanently lower multiples on business rates is to be welcomed, it is not as great as had been hoped for and will be partly offset by increased payroll costs through rises in the National Living and Minimum Wage.

“Maintaining wage differentials will get more difficult, reducing margins, so increased menu prices and reducing trading hours may be the answer for some. Operators will also be concerned about the impact of tax increases on consumer confidence and discretionary spend in pubs and restaurants.”

Darren Bond, Global Managing Director at Christie & Co, commented, "The Budget provides a mixed picture for the sectors we operate in across hospitality, healthcare, retail, leisure and childcare. While the Chancellor’s measures should offer some welcome stability, many of the businesses we work with continue to face persistent cost pressures and a challenging operating environment.

"The confirmation of continued support for business investment and measures aimed at easing the tax burden will be reassuring for operators and investors alike. Any step that improves cash flow and strengthens long-term confidence is positive for the markets we operate in.  However, many of the sectors had hoped for bolder interventions on business rates, workforce costs and energy support, issues that remain central to trading performance and sentiment.

"Across our markets, we continue to see resilient demand for well-run, high-quality assets, supported by strong underlying demographics and long-term sector fundamentals. The absence of more structural reform means operators will remain focused on efficiency in the year ahead. 

"At Christie & Co, we will continue to monitor the implications of the Budget closely and advise our clients on how these changes filter through to valuations, transactional activity and operational performance. While uncertainty remains, we expect the sectors we cover to show continued adaptability and, in many cases, renewed appetite for investment as the economic picture becomes clearer."