October 2025
Technical and Client Update
In this issue
Budget 2025 date - 26 November
How to save on childcare costs with the tax-free childcare scheme
New cyber toolkit helps small businesses strengthen their defences
Business rates: revaluations coming in 2026
Budget 2025 date - 26 November
The Chancellor will deliver Autumn Budget 2025 on 26 November 2025. The content of the Autumn Budget is anticipated to address significant fiscal challenges, including potential tax rises to address the public finance deficit.
Before turning to Autumn Budget 2025, we must note that some of the ramifications of Autumn Budget 2024 are still to come. These include:
- Capital Gains Tax (CGT) - in addition to the tax hikes that have already taken effect on 30 October 2024 and 6 April 2025, the rate of CGT where Business Asset Disposal Relief (BADR) applies is set to further increase from 14% to 18% from 6 April 2026.
- Inheritance Tax (IHT) - as initially announced in the last budget, IHT increases are already on the cards due to:
- Restrictions on 100% relief for business and agricultural property from 6 April 2026.
- The inclusion of unused pension funds and death benefits in IHT estates from 6 April 2027.
Now let’s consider some of the potential announcements in Autumn Budget 2025.
What’s unlikely to change?
Labour’s 2024 manifesto pledged that there would be no increases to National Insurance, the basic, higher or additional rates of Income Tax, or VAT.
The Corporate Tax Roadmap of October 2024 also included commitments not to increase the 25% main rate of Corporation Tax and to retain the small profits rate and marginal relief. The £1 million annual investment allowance for plant and machinery capital allowances is also due to be preserved, as is the system of permanent full expensing.
Despite the government saying that extending frozen Income Tax thresholds any longer would hurt working people, it now seems inevitable that the thresholds will remain at their current levels until 5 April 2030, mirroring the time period for which IHT thresholds are frozen.
What could change?
- The scope of National Insurance Contributions (NICs) could be widened to include landlords, levelling the playing field with those running their own trading business.
- Pension savings are currently afforded tax relief at the saver's marginal Income Tax rate (20%, 40% or 45%). The rate could be capped at, say, 30%.
- Salary sacrifice for additional employer pension contributions is currently exempt from the Benefit In Kind rules. Removing the exemption would make the contributions subject to NICs and Income Tax.
- The rates of CGT (currently 18% for basic rate taxpayers and 24% for higher/additional rate taxpayers) could be aligned with those for Income Tax, making the rate as high as 45%.
- There may be further restrictions to available IHT reliefs, possibly by introducing limits on exempt lifetime gifting.
- The VAT registration threshold, currently £90,000, may be lowered or abolished.
- The rate of VAT on domestic fuel is currently 5%. There are rumours that, in order to help with the cost of living crisis, such supplies will become zero-rated.
It isn’t possible to predict what the Chancellor will announce on 26 November, but it’s worth considering what may happen so you can be prepared. If you wish to discuss any of these issues in more detail, please get in touch – we’d be happy to help!
How to save on childcare costs with the tax-free childcare scheme
Running your own business often means juggling a lot - and for many, that includes childcare. With autumn and Christmas school breaks rapidly approaching, HMRC is reminding working families that the Tax-Free Childcare scheme can be a good way to make some savings.
What’s on offer
Through the scheme, you can get up to £2,000 a year toward childcare costs for each child up to the age of 11, or up to £4,000 (up to the age of 16) if your child is disabled. The government adds £2 for every £8 you pay into your childcare account - and you can use that money to pay for approved childcare, such as nurseries, wraparound childcare, after-school clubs, or holiday clubs.
Your childcare provider needs to be signed up to the scheme before you can pay them, so you do need to check with them to see that they’re signed up.
It’s completely flexible: you can pay in whenever you like, use it straight away, or leave it in the account until needed. If your plans change, any unused money can be withdrawn.
Who can use it
You don’t need to be on a payroll to qualify - self-employed parents can use the scheme too. Your family may be eligible if:
- Your child is 11 or under (or 16 if they have a disability).
- You and your partner (if you have one) earn, or expect to earn, at least the National Minimum Wage or Living Wage for 16 hours a week on average.
- You each earn less than £100,000 per year.
- You’re not claiming Universal Credit or childcare vouchers.
How to get started
You can apply online by visiting the Tax-Free Childcare section of GOV.UK. Each child needs their own account, and the government top-up is added to each one separately.
Once your account is open, you’ll need to reconfirm your details every three months to keep the top-up payments coming.
With school holidays around the corner, now’s a good time to check if you’re eligible and set up your account - especially if you’re self-employed or running a small business and need reliable childcare to keep work flowing smoothly.
New cyber toolkit helps small businesses strengthen their defences
Small businesses across the UK are being urged to take simple, practical steps to protect themselves from growing online threats - and a new free toolkit from the National Cyber Security Centre (NCSC) aims to make that much easier.
The Cyber Action Toolkit, launched this week at the NCSC’s Annual Review, offers tailored guidance to help sole traders, micro businesses and small organisations strengthen their cyber security.
NCSC’s latest annual review warns that every organisation with digital assets is a potential target for criminal cyber attackers. NCSC’s CEO, Dr Richard Horne, urged all businesses to ‘act now.’
A growing problem
Recent figures show that 42% of small businesses reported a cyber breach in 2024, while more than a third of micro businesses faced phishing attempts. Many small firms admit they simply don’t know where to start - often because cyber protection feels complicated or time-consuming.
The NCSC’s new toolkit aims to help with that. It breaks cybersecurity down into simple, achievable steps for businesses, with straightforward actions tailored to their size and needs.
What the new toolkit offers
The Cyber Action Toolkit is free to use and provides:
- Personalised cyber security guidance.
- Step-by-step actions tailored to business size.
- Progress tracking and rewards to recognise each improvement you make.
It’s structured around three levels - Foundation, Improver and Enhanced - so businesses can progress through the levels at their own pace and build their resilience gradually.
As you put in place the basic measures recommended by the toolkit, this can be a good starting point in later working towards Cyber Essentials certification.
Taking the first step
For busy business owners, cybersecurity can easily fall down the to-do list. But the reality is that small steps now can save a lot of time and stress later, and the Toolkit seems to be a useful tool in helping with that.
You can access the Cyber Action Toolkit free through the NCSC website.
Business rates: revaluations coming in 2026
How will your business be affected?
The Valuation Office Agency (VOA) is encouraging businesses to sign up for a business rates valuation account so they can find out their new commercial property valuation.
Every three years the VOA updates the rateable values of all business properties in England and Wales. The next revaluation will take effect on 1 April 2026, based on open-market rental values as at 1 April 2024.
Business rates are calculated from your property’s rateable value. This is not the same as your final bill, but it is the starting point. Local councils apply a multiplier and any relevant reliefs to arrive at what you actually pay.
The new valuations will be published a few months before next April. Signing up for a business rates valuation account will give you access to your property’s details and allow you to find out what your future rateable value will be as early as possible.
Your account will also allow you to:
- Check that the VOA has the right details for your property.
- Let the VOA know if something’s wrong.
- Understand how your property’s valuation was worked out.
- Tell the VOA if you believe your current property valuation is incorrect.
Having information as early as possible will give you extra time to plan for any changes to your business rates bill rather than having to react when it arrives.
To set up a business rates valuation account, see here: Business rates valuation account: sign in or set up - GOV.UK
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