Autumn Budget brings sweeping tax changes – what business owners and entrepreneurs need to know

The Autumn Budget has introduced a series of measures that will reshape the financial landscape for entrepreneurs and business owners. While designed to raise revenue and rebalance the tax system, these changes will have significant implications for exit planning, remuneration strategies and long-term wealth management. 

Arguably one the biggest changes that will affect potential exit planning is the immediate change to how EOTs are taxed.  Capital gains tax (CGT) relief on transfers into EOTs has been cut from 100% to 50%. Business owners considering EOTs should review how this impacts any exit strategies planned. Halving of relief and tighter compliance rules could materially reduce net proceeds.

The Chancellor also increased the tax on dividend payments from 2026, for both the basic and higher rate to 10.75% and 35.75% respectively. She has left the additional rate of tax unchanged. These changes alongside some of the other personal tax changes that have been made signal a good time to make sure that both from a personal and corporate point of view, you are reviewing the best way to be structuring how to provide you and your families with the income needed.

One of the more significant tax takes from the Chancellor that is expected to raise £4.7 billion in year one, is the implementation of NI contributions to salary sacrifice pensions above £2,000 a year. These costs should be modelled into any cashflow planning scenarios that businesses use for the foreseeable future. 

A good news story from the Budget is that the Chancellor has addressed one of the unfairest elements of the legislation that will limit inheritance tax relief on businesses, farms and agricultural land from April 2026. 
From April 2026 only the first £1 million of any business or agricultural assets will qualify for 100% relief.  The remainder will get only 50% relief. The government’s estimates about how many farms would be affected seemed to assume that both husband and wife would be able to use this £1 million allowance.

However, many farms and businesses are not owned by both spouses, they are often in a single name, and under the original draft legislation the allowance was explicitly not transferrable between spouses.  This was odd as the nil rate band and residence nil rate band, the other big allowances against inheritance tax, can be transferred to the surviving spouse after the first spouse’s death.

To benefit from the allowances the ownership would need to be changed so that both spouses owned a share of the farm and their will would need to be redrafted to leave that share to someone other than their spouse on the death of the first spouse.

This has been addressed in the budget allowing the unused £1 million allowance to be transferred to the surviving spouse on death, benefitting those who were unaware of the need to amend their wills, or weren’t able to amend their plans in time. This now brings estate planning more into focus to make sure that the businesses you own and the wealth you have worked hard for, goes to the people you want it to go to.

There were of course some things that didn’t change, including business asset disposal relief (BADR), but we are all aware that from April 2026 the CGT rises to 18% on disposals and the lifetime limit of £1m per individual still applies. There were also no changes to Corporation Tax which is currently the lowest in all the G7 Countries.

The Budget signals a clear shift toward taxing wealth, savings and investment rather than consumption. For entrepreneurs and small businesses, flexibility now comes at a higher cost -impacting decisions on hiring, rewarding staff and planning exits.
Now is a crucial time to make sure that you are reviewing your current personal and business planning objectives.

Proactive planning is essential. Reviewing remuneration strategies, investment approaches, and succession plans now will help protect long-term goals.

How your business links to your personal wealth has never been more important – we understand how to help you navigate the minefield and work with you to create a plan that will help you make better, informed decisions.

Book an appointment to discuss what the changes mean for you, and how to navigate what’s next.