The 2025 Autumn Budget and what it might include

Partnership tax reform may hit professional firms

The government is expected to revisit how partnerships are taxed, particularly mixed partnerships and LLPs in sectors like law, accountancy, and consultancy. While framed as a simplification exercise, any changes to how profits are allocated or taxed could accelerate liabilities and limit flexibility around partner remuneration.

Professional firms should monitor developments closely, as new rules could also bring added reporting demands and force reviews of profit-sharing or drawings policies. Reviewing partnership agreements now will help ensure they remain efficient and compliant if reforms take effect.

Possible changes to Stamp Duty Land Tax

Stamp Duty Land Tax rules may also change. Rates could increase and current reliefs could be restricted or removed. For example, the government could stop treating purchases of six or more residential properties or mixed commercial and residential properties as wholly commercial, instead requiring separate valuations for each part. This would raise tax charges and could affect both buyers and sellers, as buyers may lower their offers to account for higher costs.

Small and medium sized enterprise (SME) worries around payroll, rates and relief

SMEs are apprehensive, especially given last year’s rise in employer NI to 15%. Many expect further cost pressures through employer taxes or reforms to business rates – particularly as the current system remains widely criticised. While reforms could include regional reliefs or reduced multiples, the timing and scale must align with liquidity needs, not merely rhetoric.

High-net-worth concerns over CGT, IHT and property levies

For high‑net‑worth individuals, attention sits firmly on Capital Gains Tax and Inheritance Tax, and property levy rumours. CGT allowances may be reduced or rates increased, with inheritance thresholds potentially frozen or tightened. Additionally, a proposed annual property levy, applied on homes worth over £500,000 or £1 million is under consideration, potentially affecting privately‑held dwellings and homes used for business purposes.

Emerging opportunities in allowances and infrastructure

Despite the risks, there may be some relief. SMEs are lobbying hard to treble the trading allowance from £1,000 to £3,000. Discussions are also underway around VAT threshold uprates, capital allowances, and energy‑cost support for smaller firms. Meanwhile, the government’s agenda to invest in infrastructure, including digital transformation and grants for technology rollout, may present fresh opportunity windows.

Mitigation and planning considerations ahead of the Budget

Ahead of the Budget, we can help you review profit extraction methods, pre‑emptive CGT disposals and business structures, particularly for SMEs. High‑net‑worth clients should revisit succession planning, Inheritance Tax strategies, and align pension and ISA planning in case reliefs are altered. Early engagement now helps lock in current allowances and adapt to any sudden changes in thresholds.

Other possible measures to watch

The Chancellor has ruled out a formal wealth tax, though speculation continues around indirect ways of raising revenue from higher earners. Instead of a new property levy, reforms could focus on existing reliefs and income categories. One possibility is extending National Insurance to certain types of investment income, potentially targeting rental profits. Another is scaling back Principal Private Residence (PPR) relief on property sales above a threshold of around £1.5 million, which would particularly affect homeowners in London and the South East.

A rise in VAT on selected goods and services to 25% has also been floated as a targeted rather than across-the-board measure.

This Budget has the potential to redefine the cost base for you and your business. Being proactive now, with tailored tax, property, and succession planning will be essential to safeguard you against higher costs, and crucially, to help you seize any available relief or investment opportunities.