What the budget means for you and your business, and the questions you should be thinking about now

On 26th November 2025, Chancellor Rachel Reeves presented her second Budget to Parliament.

After the tax rises in 2024, many business owners were hoping this year would feel lighter.

Instead, we have a series of changes that will affect almost every household and almost every business.

The headline items included:

• National Insurance and income tax thresholds frozen for an extra three years

• Dividend tax rates rising from April 2026

• Savings and property income tax increasing from April 2027

• Cash ISA limits being capped for under-65s

• A council tax surcharge for homes worth more than £2 million

• A new mileage-based duty for electric and hybrid cars

• More announcements coming in January for Scotland and Wales

The big question for you is simple.

What does any of this actually mean for your business?

Here are the areas that matter most.

1. Your wage bill will rise, and it will impact your cashflow fast

The National Minimum Wage and National Living Wage are increasing. If you have a team of any size, you will feel this.

Payroll is usually the single biggest cost in a business of this size.

When salaries rise, the knock-on effects show up almost immediately in your margins and your monthly cashflow.

There is also a future change to NIC on pension salary sacrifice above two thousand pounds a year.

This will need to be planned for in advance. These changes might influence your prices, your team structure, and your hiring plans.

You will only be able to make good decisions if you have clear financial information in front of you.

2. Taking profit from your company will become more expensive

Frozen tax thresholds, higher dividend tax and increased tax on savings mean many owner-managers will keep less of what they earn.

From April 2026, dividend tax will increase to:

• 10.75 percent for basic rate

• 35.75 percent for higher rate

For anyone taking a mix of salary and dividends, this matters. You may need to review how you pay yourself.

You may also need a clearer plan for your personal tax position over the next one to two years.

This is much easier when you have accurate and up-to-date numbers each month.

If you want to understand what these changes mean for your business or you want better reporting going into 2026, so you understand your numbers better and can make more informed decisions, book a discovery call with our founder, Sara, by clicking here.

3. Deciding whether to invest in equipment is now more complicated

From January 2026, first-year capital allowances will increase for most main-rate assets.

This gives more relief upfront.

At the same time, the long-term writing down allowance will reduce from 18% to 14%.

This changes the long-term benefit of an investment.

This means you might need to look more closely at:

• Whether to buy equipment sooner or later

• How it affects your cashflow this year

• How it affects your tax bill next year

• Whether the return on investment is strong enough

Business owners tend to make much better choices when their management accounts and other reporting shows the whole picture clearly.

The 3 questions you should be asking your accountant now:

1. Can we afford the team we have, and can we still grow?

Rising wages create pressure on margins.

A business with ten, twenty or forty staff cannot wait until the year-end to find out if payroll costs have become too high.

You need to know:

• Whether your current prices still work

• Whether your margins are slipping

• Whether payroll will put pressure on cashflow in the next six to twelve months

Good management accounts give clear answers to these questions.

2. What is the most efficient way for me to pay myself now that these changes are coming in?

With dividend tax rising and thresholds frozen, many directors will need to rethink their approach.

This might involve:

• A review of your salary and dividend mix

• A clearer forecast of your personal tax bill

• A plan for how and when to extract profit over the next few years

It is very difficult to get this right without proper reporting each month.

If you want to understand what these changes mean for your business or you want better reporting going into 2026, so you understand your numbers better and can make more informed decisions, book a discovery call with our founder, Sara, by clicking here.

3. Is now the right time to invest, or should we wait?

Equipment, vehicles, technology and refurbishments all affect cash, tax and profit.

After these changes, the timing of an investment matters even more.

You need to understand:

• The effect on cashflow

• The effect on tax

• The expected return

• Whether delaying or moving earlier is better for the business

When your numbers are clear, this becomes a simple business decision rather than a guess.

The Bottom Line

This Budget does not bring many surprises, but it does bring extra pressure and more complexity.

For businesses, the next few years will be shaped by rising wage costs, higher taxes on business owners and more detailed investment decisions.

You do not need more spreadsheets or more stress. You need clear numbers and regular reporting so you can make decisions with confidence.

If you want to understand what these changes mean for your business or you want better reporting going into 2026, so you understand your numbers better and can make more informed decisions, book a discovery call with our founder, Sara, by clicking here.