Budget confirms crypto crackdown on 13m taxpayers

Cryptocurrency holders warned after Budget 2025 reiterates crypto platforms will start recording the gains made on these assets on 1st January 2026, ahead of sharing it with HMRC.

Anyone who buys or sells cryptocurrency is being urged to get their tax affairs in order, after the Government confirmed in Budget 2025 that HMRC will soon start receiving detailed financial information directly from crypto platforms.

From 1st January 2026, major cryptocurrency exchanges will be required to collect full transaction records for their UK customers – including how much they paid, how much they sold for and any profits made.

This is part of the government’s wider clampdown on tax avoidance. With these platforms to become responsible for recording and, in time, sharing the financial information of crypto holders with HMRC, the tax office will have visibility of the amount of tax that should be paid.

From 2027, these platforms will begin sending this information straight to HMRC, giving the tax authority a clear view of people’s gains for the first time.

Experts are warning that anyone trading in digital assets – from Bitcoin and Ethereum to smaller tokens – must make sure they are accurately reporting their profits on their self-assessment tax returns. HMRC will use the new data to crack down on undeclared gains.

Seb Maley, CEO of tax insurance provider, Qdos, told That's Business: “This marks a major shift in how crypto trading is monitored from a tax perspective. HMRC will soon know exactly who is making gains – and how much.

“Anyone who holds or trades cryptocurrency must ensure they are reporting the gains on their self-assessment tax return. HMRC is set to have more information and data at its fingertips than ever before.

“With platforms set to keep a record of this information from 1st January 2026, ahead of sharing it with HMRC the year after, the tax office will be able to cross-check tax returns against the data they’ve received.

“And it goes without saying, that HMRC will have no hesitation in launching an investigation if the numbers don’t match.”

2025 UK Budget — What It Means for Businesses, Workers and the Economy

 What SMEs Need to Know in 30 Seconds

"The 2025 Budget raises revenue mainly through frozen tax thresholds, higher taxes on property and dividends, and tighter pension perks, meaning many business owners will pay more without any change to tax rates. 

Early-stage businesses may gain from expanded SEIS and VCT investment schemes, and regions outside the South East will see new growth funding.

Minimum wage rises and ongoing inflation will add pressure to labour and operating costs. 

Big opportunities lie in increased public capital investment, but the overall environment demands careful financial planning and sharper cashflow management."

The 2025 Budget, delivered on 26 November by Chancellor Rachel Reeves, marks a significant moment for UK fiscal policy. Under pressure from rising debt, pay-roll strain, sluggish productivity and inflation, and conscious of earlier election promises, the government has opted for a mix of “stealth” and structural tax rises rather than headline-grabbing rate hikes. 

Below, I unpack the main measures, their likely impact, and what small businesses, sole traders and employees should watch out for.

Key Measures: Tax, Spending and Incentives

Income-tax and NI thresholds frozen until 2031

The government has frozen income-tax (and National Insurance) thresholds until 2031 — meaning they won’t automatically rise with inflation or wages. 

As a result, many workers will drift into higher tax bands over time, a form of “fiscal drag.” The expected yield from this move is substantial, with billions more in annual revenue. 

• New wealth and property-related levies

The Budget introduces several taxes aimed at wealth and property: higher taxes on property income and dividends, and a new surcharge (often described as a “mansion tax”) on homes worth over £2 million. 

For those involved in property, rental, real estate or high-value homes, this represents a significant shift. 

Pension and savings rule changes

The government is reforming pension-related tax allowances: in particular, salary-sacrifice schemes (commonly used by higher earners to make pension contributions tax-efficient) will be capped. 

At the same time, the cash ISA allowance will be reduced to £12,000. 

Support for workers, low-income households and certain public services

To soften some of the burden, there are targeted support measures: the main state pension will rise (though for many pensioners the increase is modest), and the national minimum wage is being increased. 

The long-criticised two-child benefit cap is being abolished, a win for larger families on lower incomes. 

Public investment will remain high: the government is safeguarding a planned increase in departmental capital spending — a boost for infrastructure, public services and long-term productivity. 

• Business incentives and regional growth support

In an effort to encourage entrepreneurship and scaling of firms, the Budget widens eligibility for schemes such as the Seed Enterprise Investment Scheme (SEIS) and the Venture Capital Trust (VCT), making growth-stage companies more likely to benefit. 

There are also region-specific funding commitments — for infrastructure, skills and science/tech investment, aimed at levelling up outside London and the South. 

 Economic Outlook: Growth, Borrowing and Long-Term Prospects

According to the latest from the Office for Budget Responsibility (OBR), real GDP growth is expected to modestly rise in 2025, aided by pent-up consumption and stronger-than-anticipated business investment earlier in the year. 

Medium-term forecasts are more cautious: slow productivity growth means that potential output growth will average around 1.5 % per year from 2026 to 2030 — a downgrade compared with prior forecasts. 

However, sustained public investment should help restore some long-term productivity potential. The current plan includes over £120 billion in departmental capital spending over the Parliament — the highest sustained level in decades. 

On the public finances front, the Budget packages of tax rises and structural adjustments are projected to deliver fiscal consolidation: public sector borrowing is expected to be reduced by circa £12 billion by 2029–30. 

That said, lower growth and higher public debt mean borrowing remains elevated in the near to mid-term, with the government taking a back-loaded approach to improving finances. 

What This Means for Small Businesses, Sole Traders and Entrepreneurs

Pros

If you’re a startup or scaling up, the loosening of SEIS/VCT thresholds could make it easier to attract investment, which might support growth or expansion.

Continued infrastructure and public capital investment could ultimately benefit many sectors — especially those tied to construction, transport and public services.

For lower-paid workers (or employees of smaller firms), wage rises and maintaining certain benefits could boost spending power, which could in turn be reflected in consumer demand.

Cons / Risks

“Stealth taxes” via frozen thresholds mean many people,  including sole traders and small-business owners paying themselves a modest salary,  may find themselves nudged into higher tax bands without a pay rise.

Higher taxes on property income, dividends or savings could hit those who rely on multiple revenue streams beyond their business income.

Caps on pension tax relief and reduced ISA limits may make retirement planning and personal finance less attractive or efficient.

The slower productivity growth projections could dampen long-term economic dynamism; small businesses dependent on strong demand may struggle if growth remains sluggish.

Implications for Entrepreneurs and Sole Traders — A Forecast

For those running small businesses or working as sole traders, this Budget underlines the importance of sound financial planning and flexibility. It may no longer be sufficient to rely solely on personal allowance thresholds or tax-efficient pension contributions, diversification, cash flow resilience, and reinvestment into the business might be more important than ever.

If you plan to expand, seek investment or hire staff, this may be a good time to explore growth-support schemes (SEIS/VCT), or take a closer look at regional incentives if you're outside major economic hubs.

On the consumer side, modest wage and benefit rises could help sustain demand — though inflation pressure and rising costs remain a concern. If the government delivers on infrastructure investment, certain sectors may see opportunities emerge over the next few years.

My Assessment: Balanced but Challenging. Especially for Lower-margin Businesses

Overall, the 2025 Budget strikes a balance: it avoids making headline-grabbing tax-rate changes, but quietly raises revenue through structural measures. For long-term fiscal stability and public investment, this is understandable.

However, the cost may fall disproportionately on middle-earners, small-business owners, and households with mixed income streams, especially those relying on dividends, rental income or savings.

For businesses, the new investment incentives and public spending plans may offer routes for growth — but only if firms plan proactively, manage cashflow carefully, and adapt to a modest-growth macroeconomic backdrop.

In short: the Budget offers useful strategic tools,  but also warns of a tougher financial terrain for many.

Major 2025 Budget Measures — With Expected Impact Levels

Income Tax and National Insurance

Frozen thresholds until 2031

Impact: High

Freezing thresholds for six more years means millions will drift into higher tax bands even without receiving a real pay rise. This will affect sole traders who pay themselves via salary/dividends, and employees in growth sectors with rising wages.

Taxes on Wealth, Property and Investment

Higher taxes on property income, dividend income, and a new levy on homes over £2 million

Impact: Medium–High

Landlords, company directors who pay themselves in dividends, and investors in property-heavy portfolios will feel this most. Small businesses using buy-to-let as part of a retirement plan may need to reassess strategy.

Salary-Sacrifice and Pension Reform

Tighter rules on pension salary-sacrifice schemes

Impact: Medium

Higher-earning employees and business owners using pension contributions as a tax-efficient method of payment will gain less advantage. Payroll planning will need careful review.

Cash ISA Allowance Reduced

Allowance cut to £12,000

Impact: Low–Medium

Affects savers with higher disposable income. Most small-business owners who prioritise cashflow over savings will not be dramatically affected, but long-term personal finance plans may need adjusting.

National Minimum Wage Increased

Rise in the minimum wage for 2025

Impact: Medium

Positive for workers, but challenging for sectors with tight margins (retail, hospitality, care). Businesses will need to consider pricing, staffing levels and productivity improvements.

Two-Child Benefit Cap Abolished

More families able to claim support

Impact: Low for businesses; High for household finances

While not a business measure directly, this increases spending power among lower-income households, potentially benefitting consumer-facing sectors.

Increased Public Capital Investment

Highest sustained level of capital investment in decades

Impact: High

Major opportunities for construction, engineering, transport, digital infrastructure and STEM-aligned small businesses. Supply-chain firms may also benefit as infrastructure projects grow.

Start-Up and Scale-Up Incentives

Wider eligibility for SEIS, VCT, and early-stage investment schemes

Impact: High for entrepreneurs

The government is signalling strong support for innovation and scale-ups. Tech start-ups, manufacturing innovators and creative-sector businesses may find it easier to secure early funding.

Regional Growth and Levelling-Up Commitments

Targeted funding outside London and the South East

Impact: Medium–High

Potential boosts for SMEs in the North, Midlands, Wales and Scotland. Regional grants and innovation hubs should be monitored closely by businesses looking to expand.

Fiscal Drag and Consumer Behaviour

Stealth tax increases via thresholds combined with rising wages

Impact: High

Consumers have slightly more income from wage rises, but lose more to tax over time. This may weaken discretionary spending in hospitality, retail and leisure unless wage growth outpaces tax drag.

Public Borrowing and Fiscal Stance

Borrowing reduced over the long term but remains high

Impact: Medium

The Budget focuses on stabilising the long-term public finances rather than immediate relief. Government contracts and procurement may rise as infrastructure spending continues, helping B2B sectors.

Over the last several weeks the Budget and Rachel Reeves as Chancellor of the Exchequer has been dogged with leaks on the potential contents of the Budget.

What Rachel Reeves Might Announce in the Budget — And What It Could Mean for UK SMEs

Discover what Chancellor Rachel Reeves may announce in the upcoming Budget and how potential tax, rates and growth measures could affect UK SMEs. A clear, practical guide for business owners preparing for change.

Several weeks ago That's Business published a tongue-in-cheek alternative budget, "The Alternative Budget Britain Didn’t Know It Needed" (link below), but now it's time for the "real" budget.

The next Budget from Chancellor Rachel Reeves is shaping up to be one of the most important in many years. 

With sluggish growth forecasts, rising pressures on public finances, and a commitment to deliver a “growth-first” economic strategy, businesses across the UK are watching closely.

For SMEs in particular, the big question is this: what might Reeves include in her Budget, and how will the decisions affect day-to-day trading, hiring and long-term growth?

Below, we break down the most likely policy areas, and what they could mean for business owners.

Why This Budget Matters So Much

The economic backdrop is tight. Slower-than-expected productivity growth has widened the fiscal gap, while the government has pledged not to raise income tax, VAT or employee National Insurance. That narrows the Chancellor’s options and increases the likelihood that business-related measures may be used to plug part of the shortfall.

At the same time, Reeves has repeatedly emphasised investment, private-sector growth, and support for modernisation — suggesting that the Budget may combine tax-related challenges with targeted opportunities.

Possible Budget Measures — And Their Impact on SMEs

1. Changes to Business Taxation

What might be announced?

Adjustments to employer National Insurance.

A review of business tax reliefs, possibly tightening older schemes while boosting new ones.

Potential reforms affecting dividend taxation or capital gains.

Potential impact:

Increased employment costs could make SMEs more cautious about hiring or expanding payroll. Or even trimming staff numbers.

Lean-margin businesses may feel pressure to freeze wages or consolidate roles.

Firms relying on older tax reliefs may face reduced support; those aligned to innovation, green tech or digitalisation may see gains.

2. Business Rates Reform

What might be announced?

A move to support high-street and hospitality businesses by reviewing small business rates relief.

Potentially higher charges for larger commercial property footprints or under-utilised sites.

Potential impact:

Strongly positive for micro-businesses and independent shops if reliefs are expanded.

Larger SMEs with significant premises may see higher bills, prompting a re-think of workspace strategy.

Encourages efficiency, flexible working, and potentially hybrid office models.

3. Support Packages for Growth and Innovation

What might be announced?

Expanded access to government-backed loans.

More support for exporters and manufacturing.

Incentives for adopting digital tools, AI, and green technologies.

Regional investment funding.

Potential impact:

Growth-ready SMEs could access new grants, credits or low-cost finance.

Businesses with clear digital or eco-transition plans may see the strongest benefits.

Export-focused SMEs may gain fresh momentum from expanded trade support.

This is one of the few areas likely to provide immediate opportunities rather than cost increases.

4. Labour Market and Skills Measures

What might be announced?

Funding for training, apprenticeships, and upskilling initiatives.

Support for industries facing labour shortages.

Possible adjustments to minimum wage trajectories.

Potential impact:

Improved access to skilled workers in sectors such as manufacturing, construction and tech.

A higher minimum wage would raise staff costs — particularly challenging for hospitality, retail and care.

SMEs that invest in staff development may gain productivity advantages.

5. Regulatory and Compliance Changes

What might be announced?

Updates to reporting rules for ESG and sustainability.

New requirements linked to energy efficiency or digital record-keeping.

Potential consolidation of some burdens on micro-businesses.

Potential impact:

Some SMEs may face new administrative tasks, especially in sustainability reporting.

Digital-first SMEs may find compliance easier and cheaper.

There may be support packages to help SMEs meet new requirements.

What All This Means for the SME Landscape

Likely outcomes

Margin pressure for some sectors — especially those with high labour costs.

Slower hiring in the short term if employer NI or wage costs rise.

Opportunities for ambitious SMEs in exporting, tech, manufacturing and sustainability.

Greater need for digital transformation as incentives increasingly point towards modernisation.

Funding routes opening up, but competition for grants and loans may intensify.

What SMEs Should Do Now

1. Strengthen cash-flow forecasting

Model scenarios in which employment or property costs rise. Spot vulnerabilities early.

2. Prepare to act quickly on incentives

Grants, loans and support schemes often open briefly — having business plans and forecasts ready gives you a head start.

3. Review hiring plans

Build flexibility into staffing structures where possible.

4. Assess whether you can benefit from digital or green incentives

If you’ve been postponing upgrades to your systems, equipment or processes, this Budget may justify action.

5. Engage with industry bodies

Trade associations often have direct dialogue with the Treasury and can flag sector-specific challenges.

Rachel Reeves’ upcoming Budget is expected to balance tough fiscal decisions with growth-focused measures, making it one of the most consequential for SMEs in recent memory. 

While cost pressures are possible, even likely, the Budget could also open the door to new opportunities in innovation, exporting, sustainability and investment.

For SMEs, the key is to stay flexible, informed and ready to respond. Those who prepare now will be best placed to navigate whatever changes the Chancellor introduces.

That's Business will cover the budget over the next several days.

"The Alternative Budget Britain Didn’t Know It Needed" can be found here:-

https://thats-business.blogspot.com/2025/10/the-alternative-budget-britain-didnt.html

The Alternative Budget Britain Didn’t Know It Needed

(A tongue-in-cheek proposal from That’s Business)

Let’s face it, every time a new Budget is announced, half the country sighs, the other half groans, and a small minority pretends to understand the fiscal implications for frozen sausage rolls, beer or cheese.

So, in the spirit of true British innovation (and mild chaos), That’s Business proudly presents The Alternative Budget 2025, a visionary mix of the sensible, the surreal, and the suspiciously achievable.

ECONOMY & TAXATION

Sensible:

Introduce a Small Business Break Month each May, during which every microbusiness pays zero VAT. It’ll stimulate spending, reward entrepreneurship, and allow accountants a brief but blissful nervous breakdown.

Silly:

Replace the pound coin with “Community Credit” tokens printed on biscuit tins. If you can’t afford something, you can always eat your currency. (Economists call this “digestive inflation.”)

COST OF LIVING

Sensible:

Reintroduce capped utility bills for vulnerable households, linked to average weather conditions. Because heating your home shouldn’t require a second mortgage or a small fortune in fleece pyjamas.

Silly:

Nationalise Greggs. Every citizen gets a compulsory sausage roll allowance to offset stress caused by scrolling the news.

TRANSPORT

Sensible:

A new “Small Town Rail Revival” fund to reopen rural stations and reinstate services that were cut before most of us were born.

Silly:

Replace all pothole repairs with miniature trampolines. Keeps the suspension industry busy and makes the morning commute more exciting.

HOUSING

Sensible:

A tax incentive for landlords who convert empty shops into affordable flats. Bonus points if they keep the original shopfront, “Tesco Express (Now With Bedrooms)” has a certain charm.

Silly:

All new housing developments must include one mandatory village duck pond. If you can’t afford a house, at least you can feed the ducks.

EDUCATION

Sensible:

Bring back hands-on financial literacy in schools. If teenagers can calculate TikTok engagement rates, they can learn about interest rates too.

Silly:

Introduce a GCSE in “Arguing on Social Media” with practical exams held live on X (formerly Twitter). Full marks for diplomacy, minus points for using caps lock.

ENVIRONMENT

Sensible:

Incentivise small businesses to go green by offering tax credits for renewable energy, recycling, and using locally sourced materials.

Silly:

Create an Emergency Rain Reserve. If it rains for more than five consecutive days (so, any week in Britain), we export the excess to Spain and call it “liquid GDP.”

CULTURE & LEISURE

Sensible:

A grant programme for independent theatres, museums, and community arts, because culture shouldn’t be something you can only afford after payday.

Silly:

Make the Eurovision entry process part of the national curriculum. Winning it should count as an economic success indicator, right alongside GDP and the price of Freddos.

MISCELLANEOUS MEASURES

Sensible:

Create a new “Work-Life Balance Office” tasked with encouraging flexible working, four-day weeks, and lunchtime walks instead of limp sandwiches at the desk.

Silly:

Every office must adopt a Chief Morale Officer Cat. Expenses claimable if the cat improves staff motivation, reduces stress, or successfully types an email.

THE CONCLUSION

Our Alternative Budget 2025 might never make it to Parliament (though stranger things have happened), but perhaps it should. Between the sausage rolls, trampoline potholes, and cat-led morale programmes, it’s at least a plan that puts people, and a bit of fun, at the heart of the economy.

After all, if laughter truly is the best medicine, it might just be the most cost-effective national investment.

Why Your Business Should Start Planning Ahead for Christmas as Early as Possible

At Christmas businesses of all sizes face one of the busiest and most profitable times of the year. 

However, the key to making the most of Christmas isn’t just about turning up on the day; it’s about planning well in advance. 

Here’s why your business should start preparing now and how you can support your customers during this crucial period.

1. Stay Ahead of the Competition

Starting your Christmas planning early gives you a competitive edge. 

While others are scrambling to finalise their strategies in November, you’ll already have your campaigns, stock, and logistics in place. 

Customers notice businesses that are organised and prepared, and they’re more likely to choose you over competitors who appear rushed or underprepared.

2. Ensure Stock Availability

Christmas is synonymous with increased demand. By planning ahead, you can forecast sales more accurately and ensure you have enough stock to meet customer needs. Avoiding last-minute shortages not only keeps customers happy but also prevents the stress and expense of expedited orders.

3. Optimise Marketing Campaigns

Effective marketing requires time to plan, create, and execute. By starting early, you can design compelling Christmas campaigns, schedule promotions, and build excitement among your audience. Whether it’s through social media, email newsletters, or in-store displays, a well-thought-out campaign will maximise your reach and impact.

4. Enhance Customer Experience

The Christmas season can be overwhelming for some of your customers. By preparing early, you can offer a smoother, more enjoyable shopping experience. This might include extended opening hours, gift-wrapping services, or personalised recommendations. When customers feel valued and cared for, they’re more likely to return and recommend your business to others. Also, remember that Neurodivergent customers (including those who are ASD) have difficulty coping with loud sounds including music. You might need to address this in your pre-season planning.

5. Manage Resources Effectively

From staffing to delivery logistics, Christmas puts extra pressure on resources. Early planning allows you to identify potential bottlenecks and address them before they become issues. This ensures your team is well-prepared and your operations run smoothly, even during peak periods.

How You Can Help Your Customers This Christmas

While planning for your business is crucial, it’s equally important to consider how you can support your customers during the festive season. Here are some ideas:

Offer Early-Bird Discounts

Encourage customers to shop early by offering special discounts or promotions. Not only does this help spread out demand, but it also allows customers to avoid the last-minute rush.

Provide Helpful Gift Guides

Create curated gift guides tailored to different audiences, such as “Gifts for Him,” “Gifts for Her,” or “Top Stocking Fillers.” This makes shopping easier and more enjoyable for your customers.

Streamline Online Shopping

If you have an e-commerce platform, ensure it’s ready for increased traffic. Offer features like wish lists, quick checkouts, and reliable delivery options to enhance the online shopping experience.

Focus on Sustainability

With many customers prioritising eco-friendly choices, consider offering sustainable products and packaging. Highlight these options in your marketing to appeal to environmentally conscious shoppers.

Create Memorable Experiences

Host festive events, such as Christmas markets, workshops, or charity drives, to engage with your community and create lasting memories. These experiences not only boost brand loyalty but also position your business as a central part of the holiday spirit.

Final Thoughts

Christmas is a time of joy, generosity, and connection—but it’s also a time of immense opportunity for businesses. By starting your planning early, you can ensure a successful and stress-free festive season while delighting your customers in the process.

Don’t wait until the last minute; take action now and make this Christmas your best one yet!

Localis response to Budget 2024

Localis CEO Jonathan Werran, said: “This epochal Budget, the first by a Labour Government in fourteen years, should give place-based policy a role from central casting in delivering the chancellor’s priority calls for economic growth, new infrastructure and the restoration of public services.

“The increased powers and setting of trailblazer deals as default to the combined authorities of Greater Manchester and the West Midlands as first tier stars of devolution further impresses the desired mayoral-led direction of travel for marshalling local growth and reshaping local public services in line with the government’s national missions.

“What would make all the difference from the previous government’s levelling up agenda is the degree and extent to which the expenditure of political capital will realise this government’s vision of English devolution in this parliament, and how local growth plans are made to fit like a Russian doll within a modern national industrial strategy and wider constitutional reform.

“The Budget offers an anticipated triage of immediate resourcing crises facing councils with real terms funding increases of £1.3bn in grant funding and £600m extra money earmarked for social care. A 1.5% real terms uplift from this year in day-to-day spending suggests a tight outlook for local public finances, however, and for surety of local government’s revenue financing we will have to look beyond to the next set of spending reviews, and the chance to realise at long last the promise of multi-year settlements.

“By contrast, capital funding is an easier topic for chancellors to debate, and although the end to ‘tournament financing’ of individual bidding pots in favour of single place budgets is much to be welcomed, questions may well remain over how measures in this year’s Budget will unlock the sizable private and institutional investment in all types of infrastructure - digital, energy, housing and transport - required to deliver radical place transformation.

“In this sense too, the £500m announcement to top up the Affordable Homes Programme in 2025/26 to £5bn and full council retention of right to buy revenues are good totemic announcements, but addressing the scale of the financing and resourcing for the volume and pace of new builds we urgently need is as important as any planning reforms and support to the planning profession.

“Finally, is this a Budget for high streets? Our town and city centres openly display the strength of the links between economic and social prosperity in our localities. The promise of permanently lower business rates from 2026/27, and more immediately from next year 40% relief as support for the retail, leisure and hospitality sectors is one step in the right direction for securing the foundational local economy, as is support against the scourge of shoplifting and anti-social behaviour.”

www.localis.org.uk

What can businesses expect to hear about inflation in the autumn budget?

In the last few weeks and months, a steady wave of business leaders has written to the government calling on them to scrap the inflation-linked increase expected. 

With the 2023 autumn budget right around the corner (22nd November), this only becomes more relevant for commercial property owners and tenants.

Anthony Hughes, Managing Director at RVA Surveyors, expressed his concerns for the upcoming autumn budget.

“This is something everyone in the rating industry has been following for a while,” Hughes said, “It could quite easily spell disaster for many. Spending is decreasing for businesses and consumers alike. The knock-on effect being that even with the typical spike in holiday trading, this won’t necessarily equate to keeping businesses afloat. Clarity is needed here, and the government need a strong plan going forward that gives businesses the support they need – not a bill worth more than £1.5 billion looming over their heads.”

Kate Nicholls, CEO of UKHospitality said: “The freezing of rates and extended relief could be the ‘lifeline’ needed for the hospitality sector.”

Business rates are often the third or fourth biggest expense for any commercial property owner or tenant. At the beginning of the 2023 revaluation, the average national increase for rateable values (RV) in England and Wales was 7.1%. Now, business rates payers face another increase. One almost as large as the national average increase that came into effect earlier this year; even before the upcoming proposed end date for the Retail Hospitality and Leisure (RHL) relief.

Unchanged inflation means higher costs for businesses

While inflation estimations saw it fall to around 6% for September, it in fact stagnated at 6.7% before dropping to 4.6% for October. This means that the significant rise in business rates predicted for 2024, will be even higher. This inflation, measured against the Consumer Price Index (CPI), indicates to government by how much they should raise business rates by, in the next financial year.

However, this is an unprecedented inflation. Beset by two factors in particular: multipliers are at the currently highest level since they were introduced (1990), and that RHL relief is currently set to end at the same time. The multiplier determines the amount of pence in the pound you pay against your rateable value. It is this figure that projected increases (calculated by CPI) will be directly impacted by.

RHL was expanded to cover 75% of the rates payable per property (up to £110,000) for 2023/2024. This was part of the business support package introduced in the 2022 autumn budget. While not directly influenced by the inflation-linked rise, it is currently set to end at the same time business rates are supposed to increase. With no backup or next stage yet to be announced. The government have been strangely tight-lipped considering. With nothing forthcoming, it leaves business rates payers wondering just what exactly to expect.

UKHospitality has projected that the jump in tax bills paid by pubs, restaurants, and hotels alone will be around £234m. If the expected end of RHL and other support goes ahead as currently predicted, they estimate this will add a further £630m to businesses outgoing costs.

UK consumers react to the budget

- 8% say that the recession is building a community spirit and a “we’re all in it together attitude”
- 52% of consumers agree that division in society between the haves and have-nots is getting wider
- Only 9% feel they will be better off and 38% are worried about their finances
- 58% say that they are negatively affected by the decision not to reduce petrol prices
- 54% feel negatively affected by road tax increase
- 31% cutting back on charitable donations

UK consumers are feeling more worried about their finances as a result of Wednesday’s budget, with cutting back on charity giving, eating out and turning to the Black Market among the measures they are considering to help ease their financial situation.

Restaurants and food outlets will be hit hard, as the most popular cutback is on buying takeaways (41%) followed by eating out (34%). Charities will also lose out as 31% plan to cut back on charitable donations.

Magazines and newspapers are also under fire with 33% of the population saying they will consider giving up buying them.

However, there is still some optimism in the air as playing the lottery remains a part of life that almost two thirds of UK consumers (59%) are unwilling to give up, while 3% said they will increase their spend on lottery tickets.

When thinking about their financial situation and about how they manage their money between pay or pension days, UK consumers appear to be quite a sensible bunch with more than two thirds (69%) saying that they would never be tempted to use payday loans such as Wonga.com and Quickquid. However, 8% say they are already using these facilities and 10% say that they are considering this option.

More than half (52%) agree that the cuts as outlined in Wednesday's Budget are creating great divisions in society between the haves and have-nots, with only 8% saying that a silver lining of the recession is that it is building community spirit with a “we’re all in it together” attitude.

However, this sentiment increases among lower income earners with 63% thinking it’s causing a divide compared to 47% of middle income earners.

When asked to think about their financial situation and whether the Budget will make it harder to stretch their money further, we asked consumers if they would be tempted to buy certain products on the black market, buy fake brands, or go over their duty limit on things like alcohol or cigarettes when travelling back from abroad.

More than a quarter of the UK population said they would consider purchasing in this way for clothing and accessories (27%), closely followed by perfume and cosmetics, household items such as washing powder and alcohol (all 22%).

Surprisingly only 18% said they would consider buying cigarettes by any of these means and 20% for petrol. However, it is important to note that the majority of consumers are a pretty moral crowd with most saying they were not likely to go down this route in order to save money.

Among smokers, however, there is a greater tendency to search out the black market or stretch the duty limits in order to get cheap booze and fags.

And those that are worried about their finances in light of the budget are also more likely to search out alternative routes to getting their hands on products including the black market, stretching duty limits or buying fake products.

Half of those worried about the budget (49%) also said they planned to cut back on holidays.

“These figures provide interesting insight into the way the general population is feeling as a result of the Budget,” said Marco Scognamiglio, CEO of RAPP UK.

“While reports have suggested that some people will be better off, there are large numbers of people who will be worse off or who at least feel they will be worse off.

“It is critical to listen to consumer conversations and sentiment following the budget and to respond in relevant ways as the power and influence they can have on brands and society is not to be underestimated.”

Of the issues that affected them most, the table below shows the number of UK consumers who felt they would be negatively affected by each one:

Issue / % of population who felt a negative impact

Petrol / 58%
Road Tax Increase / 54%
Flight Tax / 41%
Alcohol / 40%
Lunch time hot snacks tax increase / 30%
Granny tax / 22%

[RAPP Proprietary Research using Toluna. Sample: 500 UK consumers.]

No 'Robin Hood' Budget: Over Half Of Brits (53%) Say They Will Be Worse Off

Hopes of a so-called Robin Hood Budget were dashed, as many say the Budget has helped high earners more than low and middle income families, according to new research from uSwitch.com, the independent price comparison and switching service. While a third (36%) say that the Budget helps low and middle income families, many more (70%) believe that high earners got a reprieve. And the elderly appear to have been forgotten - less than one in ten (8%) say that George Osborne has helped pensioners.

It is clear that the Budget Day Blues are setting in - over half of Brits (53%) say they are worse off following Wednesday's Budget[. Far from easing the pressure on squeezed consumers, over half (55%) now feel less confident about their finances - just one in ten (11%) now feel more confident.

But things seem even worse for those in Scotland and Wales as well as the over 65s are feeling the least confident about their finances. Just 8% of those aged over 65 feel more confident about their finances, while 8% of those in Wales and 10% of Scots feel the same. However, the young and those in the South seem to be the Budget winners - 16% of those aged 25 - 34 feel more confident, while 13% of those in the South East and South West are feeling positive.

But despite the lack of confidence, some of the Chancellor's measures were an overwhelming success. The vast majority of Brits (92%) welcome the move to increase the income tax threshold to £9,205 from April 2013, while increasing the stamp duty on £2 million properties has gone down well with more than eight in ten (83%). The changes to how child benefits will be withdrawn - by making the removal gradual and only after consumers earn £50,000 - has pleased almost six in ten (59%) while almost half of Brits (49%) agree with extending Sunday trading hours during the Olympics.

However, the controversial decision to cut the higher rate of tax from 50p to 45p seems to have let many down - almost six in ten (57%) disagree with it, with a third (35%) -strongly disagreeing. It seems that the boost given to high earners has dashed the hopes of a Budget that serves to rob the rich to give to the poor.

However, the Budget has acted as a wakeup call to almost half of Brits (45%) who will use the announcement as an opportunity to review their own finances, while a quarter (25%) plan to cut back on retail spending. And with tax increases hitting fuel and tobacco, 15% will change their personal habits, such as cutting back on smoking and driving in an attempt to save money.

Ann Robinson, Director of Consumer Policy at www.uSwitch.com, said: "Many consumers are feeling the Budget Day Blues following George Osborne's announcement. Three months into another tough year, far from creating a sense of hope and optimism, the Budget has left consumers feeling less confident about their own financial situation. While all workers will be better off following the popular increase to the income tax threshold, many more will feel it doesn't go far enough to combat the rising cost of living and the squeeze on their finances.

"However, it's good news that some households will try to take matters into their own hands by taking the opportunity to review their own Budget, as well as changing habits which could save them money while improving their health.

"This could go some way to helping relieve the pressure on family finances, so I would urge others to join them in reviewing their finances and cutting back on household utility bills where they can. For those worried about tax increases wiping out the extra money they may have gained from the higher income tax threshold, taking time to shop around for the best deals on household bills could save as much as £1,800."

Budget News and Views of the business Community

Budget Impact On SMEs - Sage Comment
Lee Perkins, Managing Director, Sage's Small Business Division "The Chancellor introduced his Budget as one which "unashamedly backed business" and through cuts to Corporation Tax, simplifying the tax system for small businesses and providing increased support for start-ups and enterprise, the Government's rhetoric was justified."

"Commitments to developing world-beating broadband and making Britain Europe's technology centre makes the UK an incredibly attractive place to set-up and do business and will support sustained long-term growth that gives small businesses the confidence to expand."

"We wanted a pro-business budget. We needed a pro-business budget. What we've got is a series of measures that should see the small business "engine room" of our economy shift up a gear, providing the Government delivers on its announcements."

FSB Budget Reaction: Welcome Measures But Still A Missing Link
The Federation of Small Businesses (FSB) has welcomed the Chancellor's Budget speech. Commenting on the speech, John Walker, National Chairman, Federation of Small Businesses, said: "We asked for a Budget with long-term measures to help to instil confidence, rather than a barrage of micro-measures that have a limited impact on the ground. We are pleased with some of the actions to cut the burden of red tape, help to get our young workers into employment, and measures to improve access to finance. Especially welcome are the proposals to simplify the tax system for the country's smallest companies. However, petrol prices remain a major concern for small businesses and we would have liked some further action on reducing the level of fuel duty to help struggling small firms.

"The key to nurturing the economy back to full health is by tackling the budget deficit and the FSB continues to support the Government's debt reduction plan. The FSB welcomes the fiscally neutral budget and is pleased with the OBR's positive revision to growth forecasts this year, along with forecasts for falling inflation.

"But, to ensure that businesses can be properly supported and to bring together the measures that have been announced, we are disappointed that there were no plans to look into setting up a Small Business Administration - a department to champion small firms at the heart of Government with a cabinet level minister. This is the missing link to ensuring that all initiatives have the maximum impact for small firms."

Commenting on tax simplification plans John Walker, National Chairman, Federation of Small Businesses, said: "Plans to move to a simpler 'cash accounts' system will bring huge deregulatory benefits to small businesses, and is something the FSB has long been calling for. Many small firms will already use a 'cash accounting' system and so the moves to allow businesses with a turnover of less than £77,000 to use this system will be welcome. Research by the FSB for the Office of Tax Simplification found that on average 50 per cent of small firms spend between two and eight hours understanding, calculating and completing tax returns. This system will make it easier for those businesses. What we need to see now is HMRC develop a better relationship with business to ensure tax compliance. "

Fuel duty:
"We are disappointed the Chancellor has not announced a cut in the level of fuel duty and that the rise deferred to August is still to go ahead. This will still hit small businesses and households hard and so we need to see a long term solution to address high and volatile fuel prices. We remain concerned that the Government's Fair Fuel Stabiliser will not trigger an actual reduction in the price paid at the pumps."

On non-bank finance:
"With two in five small businesses still struggling to access finance through the banks it is vital for growth that there are alternatives they can go to. So the £1.1 billion Business Finance Partnership is welcome as it will open up non-bank lending for businesses. The further extension to the Enterprise Finance Guarantee will also be beneficial to small firms and the expansion of UK Export Finance will benefit businesses that want to export."

"Further to the publication of the Breedon report into alternative sources of finance last week, we hope that the Government will accept its recommendations into non-bank lending. Notably that it will look to put all its financial products under one umbrella organisation. This is a good first step to creating the Small Business Administration that we have been calling for.

Enterprise loans
"The announcement that the Chancellor will look at introducing Enterprise Loans for young people to start their own businesses is very welcome. More than three-quarters of 11-18 year olds would like to set up their own business so loans to help them do so will be a great help. The FSB has long said that Government should prioritise and support enterprise to young people in education so that setting up on their own is an option."

Broadband:
"The raised aspirations for broadband development to make 10 cities in Britain super connected are welcome, but we must not forget about rural Britain where a lot of small businesses are based. Digital services in some parts of rural Britain are still wholly inadequate, and that is where efforts should be focused to avoid a digital divide."

Infrastructure:
"We are pleased with the Government's renewed focus on the UK's road network. The poor state of roads costs small businesses £5,000 a year due to congestion and poor maintenance. However, it must be remembered that putting a cost on roads is yet another overhead for small firms, which could be damaging at a time when the price of fuel is having a negative effect on businesses.

"It is important that any money collected through tolls is used solely to fund the road infrastructure network. Many would argue that the water crisis in the south and the impending energy crisis show the limitations of the private sector in achieving a long term vision. We do not want to see this repeated on Britain's road network that is so vital to small businesses."

Karen Barrett, Chief Executive Of unbiased.co.uk, Comments On The Budget
Personal taxation
"The Chancellor's announcement to raise the personal allowance from £8,100 to £9,205 from April 2013 is a welcome pledge for everyone, particularly those on lower incomes. Whilst there are already plans to increase this allowance - the income that you can receive before you start paying any income tax - to £10,000 by April 2015, today's announcement will help fast track to the £10,000 goal. The further plan to provide people with an annual statement detailing where their tax payments are being used is a welcome move for consumers both in terms of educating them and providing them with some perspective on tax. The announcements made today will go some way to help basic rate taxpayers by giving them some extra money in their pocket. According to our research at the end of last year, 72% of Brits were concerned about their finances, so with this in mind we would urge consumers to seek advice from an independent financial adviser (IFA) to help them make the most of their money.

Changes to child benefit:
"From April 2013 child benefit was due to be abolished for those households with one parent earning more than £42,475. However, the new threshold limit changes announced today by the Chancellor will help families with one parent in employment and earning just over the threshold who would have lost this benefit under previous plans. The introduction of the gradual phase out of child benefit for those earning over £50,000 will also go some way to helping families cope. People often miss out on significant amounts by failing to claim the child tax credit and child benefits due to them. Our latest Tax Action report finds that consumers waste an estimated £401million by not making efficient use of these allowances. We encourage people to review their current situation today to ensure they aren't missing out on what is rightfully theirs. A discussion with an independent financial adviser is a great way to start this process, and you can carry out a free and confidential search at www.unbiased.co.uk.

Simplification of state pensions
"The announcement to simplify basic state pensions is a welcome move for everyone as is the new single tier pension rate set at £140, based on contributions. The simplification is a step in the right direction in helping educate consumers on their pension contributions. Our latest stats reveal the majority of Brits (65%) continue to expect the state pension to provide them with an income in retirement and only 4% expect NEST to form part of their pension income. The start of auto-enrolment will also mark an important change in how we save for our retirement in this country. For the first time, almost the entire working population will automatically be part of a retirement saving scheme, with their employers making an active contribution to that scheme. We would encourage people to use the forthcoming auto-enrolment launch as a reason to think about their retirement options and to consult an independent financial adviser (IFA) to ensure they are making the right choices for themselves.

Help for small businesses:
"With the Chancellor announcing expansion on Enterprise Finance guarantees for small businesses, and corporation tax falling to 24% from 1 April 2012, there is more need than ever for small businesses to seek advice from an accountant or an independent financial adviser. In addition, the credit-easing programme the Chancellor announced yesterday will see £20 billion made available to small businesses over the next two years, marking further good news for small businesses. An accountant or IFA will ensure that small businesses make the most of their tax allowances and assist them in keeping up to speed on the impact of changes to current tax rules. Our recent research tells us there are currently over three in five small business owners using a professional adviser, such as an accountant or an IFA for their business and it is these professionals who can really make a difference to the amount of tax a business pays. With further reductions of 1 per cent per annum in corporation tax expected over the next two years, falling to 23 per cent, the future may be starting to look better for SMEs."

Response To Budget And Relaxation Of Sunday Trading Laws
Retailers could stand to increase sales by £220m thanks to the relaxation in Sunday trading laws during the Olympics, according to Verdict Research estimates.

The temporary change to the law announced in today's Budget will enable longer shopping hours and more opportunity for consumers to spend across eight consecutive Sundays. This will be particularly beneficial during the Olympic period when tourism levels will be high and it will enable increased spending from visitors that are only in the UK for a short time and who would have had their spending opportunities restricted.

While for retailers the costs of opening will have to be weighed up against any anticipated sales boost, some retailers already open their stores for browsing only, over and above the six hours they are limited to selling in, and these will already be staffed so the option of actually selling during that time will no doubt be beneficial. However, in some lower footfall locations it may not be profitable but at least the retailers will have the option to choose.

Smaller retailers that are not currently restricted will be hit though, as they will have to compete with larger retailers throughout the day's trading.

The increasing of the personal tax allowance, also announced in the budget today, will be welcomed by retailers whose customers' disposable incomes are under pressure. However, with fuel inflation still high and no changes to the planned 3p increase in fuel duty in August, consumers' wallets will still be feeling the pinch. Many retailers will be disappointed to see that there is no help in terms of business rates, or a reduction in VAT.

The Budget & Tax Issues By David Pegler, Divisional Director of Brewin Dolphin Brighton
The good news for people and businesses in Sussex is that all the main tax reliefs have been left untouched - so pensions and ISAs continue to be the important investment vehicles they are today. Uncapped tax reliefs generally used in aggressive tax avoidance schemes - that is except charitable giving - will be capped from 2013 at £50,000 or 25% of earned income, whichever the greater.

Brewin Dolphin, with offices in Invicta House, Trafalgar Place, Brighton welcomed the Government's investment and incentives for private sector investment in key industries such as oil, pharmaceuticals and technology that were announced - an especially good Budget for the regions - we expect these to go some way to rebalancing the economy both by sector and geographically.

The cut in corporation tax will benefit those companies with significant exposure to the UK. We expect earnings estimates for the mid-cap companies, which are not as globally diversified as their larger peers, to improve on the bottom line. Overall, a budget that is positive for business, positive for the regions and so should be supportive of equity markets. The gilt market has strengthened although this probably reflects the weakening of Spanish and Italian government bonds, rather than anything which was announced in Westminster today.

If you would like to know more about the Budget and your Investment opportunities , please contact David Pegler at Brewin Dolphin on 0845 213 1190 or email info@brewin.co.uk