Experts react to long-awaited Autumn Budget

The UK government has announced its latest raft of fiscal rules which look to improve the state of the economy and address issues like the cost of living, energy costs, and NHS waiting lists. Several business experts, including figureheads in print and its associated industries, have given their reactions.

PwC, a provider of professional services including auditing and business advice, has described the Budget as a “tax and save budget” rather than a “tax and spend” budget.

PwC chief economist, Barret Kupelian, comments: “Every budget is about choices, and this one comes with unusually tough trade-offs,” adding: “This finishes what last year's budget started – with a starting fiscal headroom much smaller, the chancellor decided to tighten the purse strings.”

In its analysis of the latest budget, the British Printing Industries Federation (BPIF) pointed to comments from Kemi Badenoch, leader of the Conservative party, and Sir Ed Davey, leader of the Liberal Democrats.

Badenoch said the Budget was a “smorgasbord of misery” while Davey said the chancellor can’t “tax her way to growth”.

Coverage of the Budget on television and radio was largely showcasing the concern and disappointment from the public and businesses, as many believe Reeves did not make enough bold choices, backtracked on previous commitments, and continued to tax working people.

The Institute for Fiscal Studies (IFS) says Britain's households are facing a "dismal" rise in spending power as disposable income is expected to grow by just 0.5% annually over the next five years (historically the average is more than 2%).

Helen Miller, director of IFS says we should expect a period of greater stability following the Budget, but does believe Labour breached its manifesto pledge by freezing income tax thresholds.

Charles Jarrold, chief executive officer of the BPIF, comments: “While this year’s Budget may not have the catastrophic impact of last year’s employer NIC hike, there were some measures which will nonetheless raise the cost of employment and squeeze businesses further. The increases to National Minimum Wage (NMW) and National Living Wage (NLW), though smaller than in recent years, continue to cause real anxiety and concern for our members.”

Budget announcements from the government regarding business investment include a service providing advance tax certainty for large UK inbound projects, the retainment of full expensing for main-rate plant and machinery, and an extension to Small Business Rates Relief (SBRR).

When it comes to business tax, the government has kept the rates of Corporation Tax (CT) the same while dividend tax will increase by 2% on Basic and Higher rates. The thresholds for NICs will all be maintained from April 2028 until April 2031.

From April 6^th, 2029, employee and employer NICs will apply to salary-sacrificed pension contributions above £2,00 per employee per year, while income tax relief on pension contributions will remain unchanged.

The government also announced a number of changes such as homeworking expenses, car ownership schemes, and new enforcement measures which will be undertaken more closely with trade unions and local business groups.

The government says it is not raising taxes on businesses overall, pointing to the fact it maintains the lowest CT rate in the G7 (25%) and is introducing targeting relief for SMEs and high street firms.

The government also says that doubling eligibility for enterprise tax incentives along with UK list relief and ISA reforms will help businesses grow and attract investment.

Jarrold adds: “This Budget was always going to be tough for the Chancellor, but the business community has made it abundantly clear that loading more costs onto business will lead to lower investment, hampered productivity, and fewer jobs.

“Taxing salary sacrificed pension contributions will see NI bills rise yet again, and the new levy on electric cars will either add costs or simply disincentivise the switch to EVs, with EVs the leading area of investment reported in our member surveys.  We’re also concerned about the potential hit to members with a muted increase on rates for buildings valued at more than £500,000. We’ll keep a close eye on what the indicated 'transition support' measures will actually comprise of.”

Jarrold highlights that the print industry has called on policies which promote investment and growth, pointing to the full expensing of leased assets as a welcome policy, but one that could have been broadened to include second-hand assets.

"The Government’s vision to grow the economy is the right one. But businesses of all sizes, in all sectors, need a coherent roadmap – not a patchwork of tax rises and partial incentives,” says Jarrold, who adds: “Without bolder reforms to lower employment costs and encourage investment in people, skills, and equipment, it will remain challenging for businesses to contribute to the growth we all want to see.”

Commenting on the Budget, Marco Amitrano, senior partner of PwC UK, comments: “The extent of pre-Budget speculation had been particularly unhelpful,” adding: "It’s encouraging that some of the anticipated tax rises on business didn’t materialise.

“While measures like the freeze in income tax thresholds will ripple across the economy, companies now have a clearer line of sight to plan, invest and get moving at pace again.” In defence of the Budget, Amitrano says that businesses are keen to move forward and that the headroom revealed in the Budget means clarity must now turn into momentum.

Kupelian concludes: “With headroom now rebuilt and the proposal to assess the fiscal rule annually rather than twice a year, medium-term fiscal policy looks more predictable. Headroom is like oxygen: you do not notice it until it runs thin. We therefore think that this will give businesses and households greater confidence to start investing and spending over time.”