A Budget Sandwich – Our Feedback on The Autumn Budget 2025

Many of our readers will be aware that there is a particular feedback technique that’s often referred to as a sandwich. This feedback technique involves starting with positive news, delivering the negative feedback, and then finishing on something positive.

At The Uncommon Practice we always try to be positive, so this year we’ll be giving our thoughts on the Chancellor’s statement in the form of a Budget Sandwich.

Unfortunately, for most of our SME business clients, in this year’s sandwich, there is a bit too much filling.

Firstly, some positives.

Businesses dodged a tax bullet. There had been some concern that businesses would be hit by significant increases in business taxes. Thankfully, this didn’t materialise, although there were several smaller tax changes which will increase the burden on SME businesses.

The argument that “It could have been worse” will not be much relief for business owners.

Some more positives. Permanently lower business rates for retail, hospitality, and leisure are welcome, but the benefits could be offset by other rising costs.

Making the 40% First Year Allowance for main rate assets permanent is a good thing.

Expanding the Enterprise Investment Scheme and Venture Capital Trust scheme is positive for startups and businesses who are ready to scale up.

And reforms to apprenticeships for under 25s is also good news for SMEs.

We also believe that the outlined measures which support the most vulnerable in our society are a good thing.

Now for the filling.

At The Uncommon Practice, we’re 100% on the side of ambitious SME business owners who want to grow and succeed. Unfortunately, there was very little in the Budget that will support this growth ambition.

Business confidence is very low, and there was very little in the Budget that will improve this situation. In fact, an even greater tax burden was put on business owners.

The 2% rise in dividend tax would appear to many business owners to punish success and risk taking, and could even deter entrepreneurs from setting up limited companies. The increase in dividend tax could also deter people from actively investing in companies.

Applying National Insurance to salary-sacrificed pension contributions, on top of the recent rise in employer NICs, also creates another cost for employers.

And while we believe that increasing the minimum wage is a good thing for workers, and the right thing to do to as the cost of living continues to rise, there is no doubt that this is yet another significant additional cost for small businesses.

As we outlined previously, the change to business rates should help retail and hospitality businesses, but this rise in the minimum wage and other costs might offset any benefits.

The reality is that many small businesses, particularly retail and hospitality, will simply take on fewer staff, which will hinder their growth, or raise prices themselves to offset the cost.

We would have liked to have seen more reliefs and incentives for small businesses to offset the rise in wage costs. This would enable them to pay people more and keep them in work. There’s no point having the former, if you can’t have the latter.

The freezing of tax thresholds until 2030/31 is a continuation of fiscal drag, stealth tax, or as we have previously called it: ‘boiling the frog’ taxation: putting up the effective tax rate on growing businesses, owners, and their employees and hoping that they won’t notice until it’s too late.

The problem is that people are now noticing and they’re not happy about it! And when consumers feel poorer, they spend less. Not good news for many SMEs who rely on consumer confidence.

According to figures from the UK government published in October 2025, there are about 5.6 million businesses with under 50 employees in the UK. That represents about 99% of all UK private-sector businesses, employing about 47% of the workforce. If you include businesses who employ up to 250 people, the number employed rises to 60% of the workforce.

That’s why SMEs are the engine of our economy. This budget could have provided rocket fuel to the engine by introducing some brave new policies and changes. Instead, while it didn’t poor water on the fire, it left the embers to burn on their own. Hopefully they won’t go out.

It takes guts and supreme effort to start and grow a business, and many ambitious owners and entrepreneurs will now be questioning whether the risk and effort is worth it.

Finally, some more positive news to complete our sandwich.

As a business that recognises the positive benefits of AI to our economy, and who are developing our own AI solutions, we’re pleased to see support for AI infrastructure and initiatives, particularly the new AI growth zone in North Wales.

We’re also proud to be based in Wrexham, and we’re really pleased to see that the new Flintshire and Wrexham Investment Zone has been given the green light in this Budget.

This initiative should bring high quality jobs, research and technology to our region, along with new skills development opportunities to support and develop our local businesses and communities. This is definitely a good thing.

We have tried to be positive with this year’s Budget Sandwich.

Hopefully, for our SME clients’ sake, the chef will take on our feedback so there’ll be more bread next year, and much less filling.

Contact Us

If you’re an SME business owner and you’d like to find out how our strategic accountants can help you to achieve your ambitions and make data-driven decisions, please email: support@theuncommonpractice.com or fill in an enquiry form and we will be happy to speak with you.