Autumn Budget 2025: Promises, policies and pressures

Abby Agopian, Head of Tax Policy: 

"The Corporation Tax (CT) Roadmap, published alongside last year's Autumn Budget, was really the key business offer from that budget. It was looking to provide predictability, stability and certainty over the tax landscape to help businesses make investments and drive growth. There's lots in that roadmap on what won't change, including the CT headline rate, and it also provides certainty that some of the UK's attractive incentives such as full expensing, R&D tax credits and the Patent Box will remain."

Rachel Parker, Partner, Tax: 

"It's not all smooth sailing – businesses are under pressure from many directions. Corporate tax rose to 25% in 2023 and increases in National Insurance and the National Minimum Wage from April this year have added further pressure for many businesses. Margins are really tight, and they're feeling the squeeze."

Rachel Parker, Partner, Tax: 

"In the Budget businesses would like to see certainty, to allow them to make long-term strategic decisions, and an expansion and extension of those reliefs that are already available – such as research and development credits and the Patent Box." 

Abby Agopian, Head of Tax Policy: 

"A budget board was created in early September by the Prime Minister, and that was tasked with driving growth and maintaining support from both businesses and the city. While the Government may be aiming for a more business-friendly tone this time around, fiscal pressures do remain, and it faces a difficult balance in maintaining fiscal stability whilst also driving economic growth."

Tim Taylor, Head of Entrepreneurial Services: 

"The Government's promise to support entrepreneurs is backed by initiatives like the Plan for Change and Invest 2035, a long-term industrial strategy to boost UK productivity. These strategies aim to unlock growth and provide certainty around investment and skills development, especially in the mid-market, which has been the most productive segment of our economy since 2018."

Tim Taylor, Head of Entrepreneurial Services: 

"Many SMEs are nervous and uncertainty around the future appears to be acting as a drag on the economy. This could have an adverse effect on hiring, investment and succession planning."

Nicholas Parkinson, Partner, Tax:

"We're seeing some clients accelerate actions that they wish to take anyway before the budget, while others are preparing, but pausing major decisions to avoid unintended long-term impacts."

Nicholas Parkinson, Partner, Tax

"There's been much speculation from businesses and from the media as everyone tries to understand what may happen next. And we expect this to intensify as Budget day approaches."

Tim Taylor, Head of Entrepreneurial Services:

"We've been working with our clients, thinking about how they can attract the right amount of talent into the business, such as looking at the benefits package, flexibility within the benefits package, and ways in which you can hold key personnel within that business, such as management, incentivised share schemes and phantom shares."

Nicholas Parkinson, Partner, Tax: 

"If we can create real certainty over Government policy for the next few years, surely that's going to really create the growth that both the Government and all of us are really hoping for."

Earlier this year, the Government launched the Invest 2035 strategy, a 10-year industrial roadmap aimed at creating long-term policy stability, unlocking growth sectors, and attracting global capital. For UK investors, this was a welcome move, signaling a shift from reactive policymaking to a more strategic, investment-friendly environment. 

Dealmakers have been adapting to a recalibrated market. Valuations are under pressure, debt is more expensive, and exits are slower. But Invest 2035 offers a counterweight: it prioritises eight high-growth sectors—from financial services and life sciences to clean energy and advanced manufacturing. While the UK remains attractive for FDI, macro uncertainty—from inflation to geopolitical risk—is affecting confidence. Increases from the 2024 Budget to Capital Gains Tax changes created a time-sensitive incentive for business owners to accelerate exits before the increased CGT rates came intro effect. 

So, investors and dealmakers will be looking closely for changes that could further impact exit planning and portfolio company cost bases.  

They would also like to see fiscal stability and a clear tax roadmap which offers predictability for investment. Dealmakers also hope to see a continued downward trend in inflation and, if possible, interest rate relief from the Bank of England. Lower borrowing costs would improve credit access and boost M&A activity, helping to bridge valuation gaps between buyers and sellers.  

Dealmakers are keen to avoid further increases to Capital Gains Tax and Business Asset Disposal Relief (BADR) rates. Any signal that these rates could rise further could create another rush to complete deals. 

Abby Agopian, Head of Tax Policy:

"The Government has plans to close the tax gap by £7.5 billion annually by 2029/30, and at the last two fiscal events, they announced a package of measures to seek to achieve this. This included increased compliance and debt management staff, for example. Over the summer, we also saw the HMRC's transformation roadmap,  which looked to build on those previous announcements, and it set out in further detail how the use of digitalisation, automation and AI can be used to close the tax gap."

Louisa Beciri, Director, Tax Dispute Resolution:

"The data HMRC has access to is getting better, which is enabling them to open more focused and complex enquiries. This data has also created a change in approach, moving more towards upstream compliance, which we're seeing in the number of nudge letter and educational campaigns. With more investment in HMRC recruitment, we're expecting the number of enquiries to increase. This increased scrutiny means that businesses need to remain proactive to stay ahead and avoid costly disputes."

Alex Miller, Partner, Indirect Tax:

"HMRC’s transformation roadmap sets out a path for change over the coming years and into the longer term. With e-invoicing being adopted in other jurisdictions, many of our clients are asking whether their current systems are fit for purpose.  

There's a growing awareness that this isn't just a compliance issue, it's all about operational readiness and future proofing."

Alex Miller, Partner, Indirect Tax:

"In the next budget in relation to e-invoicing, we're expecting to see an output from the May 2025 consultation. This could include a roadmap for implementation, the structure, the network that they will be using, and a decentralised or centralised model that may be implemented. The output of the consultation and the roadmap for the future for e-invoicing will allow our clients to plan for the future, giving them certainty of what they will do."