Autumn Budget: What Bookkeepers and SMEs Need to Know

The Chancellor’s latest Budget arrived under unusual circumstances. After weeks of hints, the Office for Budget Responsibility (OBR) was forced to apologise after accidentally publishing its forecasts ahead of the speech, an embarrassing leak that briefly overshadowed the formal announcement.

Once in Parliament, the Chancellor confirmed a package of measures that collectively raise around £26 billion a year by 2029/30. The Budget introduced a series of structural and “stealth” tax shifts that will significantly affect personal finances, payroll, and compliance for SMEs.

So, what do the key announcements mean for bookkeepers and their clients?

Key Budget Announcements

1. Income Tax & National Insurance Thresholds Frozen to 2030–31

Thresholds will now remain fixed for another five years. It means as wages rise with inflation, more taxpayers will drift into higher bands, increasing the tax take without changing headline rates. This is one of the biggest revenue-raisers in the Budget.

2. Pension Salary-Sacrifice Reform

Only the first £2,000 of salary-sacrificed pension contributions will remain exempt from National Insurance. Anything above will incur National Insurance, which is expected to raise £4.7bn, and it significantly reduces the attractiveness of salary sacrifice for higher earners and directors.

3. Council Tax Surcharge on £2m+ Properties

A new “mansion tax” of £4,500 will be levied on all properties worth over £2 million generate around £400m per year by 2029/30.

4. Higher Taxes on Dividends, Savings & Investment Income

Dividend tax rates will rise by 2 percentage points from April 2026, which means that company owners who rely on dividends, and individuals with investment portfolios, will feel this immediately.

5. ISA Reform: Cash ISA Limits for Under-65s (from April 2027)

The £20,000 total allowance remains, but only £8,000 can now be held in cash unless the saver is over 65.

6. Mileage Charge for Electric & Hybrid Vehicles

Owners of electric vehicles will be charged 3p per mile and hybrids 1.5p per mile from April 2028.

7. Abolition of the Two-Child Benefit Cap

As expected, she has scrapped the two-child benefit cap, which will cost around £3bn annually by 2029/30.

8. Further Business & Capital Tax Adjustments

She also announced writing-down allowance for corporation tax, Capital Gains Tax, Inheritance tax and Employee-ownership trust (EOT) disposals.

9. Property taxes rise

The basic, higher and additional rates will each increase by 2 % taking them to 22%, 42% and 47% from April 2027.

As always with the Budget the devil is in the detail but for bookkeepers the work starts now. It means they will have to update payroll projections, warn clients about rising effective tax rates and adjust cashflow forecasts for both employees and owner-managers.

It also means clients using pension contributions as part of a remuneration plan may lose a significant NI advantage. Bookkeepers should look at re-valuating director pay strategies, model the post-2029 NI impact. It’s key that bookkeepers communicate changes early to clients to help them avoid unpleasant surprises.