1. Encouraging investment: enhanced capital allowances &‘full expensing’stay 

The government has reaffirmed its commitment to preserve ‘full expensing’ for plant and machinery – allowing businesses to write off the cost of qualifying assets in the year of purchase.  

From 1 January 2026, there will also be a new 40% first-year allowance for main-rate assets (though standard writing-down allowances for depreciation will fall from 18% to 14% from April 2026).  

What this means for your business: 

Investment in machinery, equipment, or other capital assets becomes more financially attractive, as the upfront tax relief improves cash flow in the year you spend. 

If you’ve been delaying expansion, equipment upgrades, or scaling operations due to uncertainty about tax treatment, this provides clarity. For businesses looking to expand, invest in premises, tech or machinery, now could be the right time to act. 

2. Lower costs for retail,hospitalityand leisure – and a more level playing field 

The Budget sets out permanently lower business-rate multipliers for eligible retail, hospitality and leisure (RHL) properties from April 2026. Around 750,000 such properties will benefit – a measure worth nearly £900 million a year.  

The small business RHL multiplier will be set at 38.2p and the standard RHL at 43p in 2026–27.  

Why this matters: 

If your business operates in retail, hospitality, leisure – or relies on physical premises – lower business rates reduce fixed overheads long term, improving margins. 

It helps high-street and brick-and-mortar businesses remain competitive against large online retailers and distribution-heavy firms, especially since the government plans to shift more burden toward high-value properties, citing “warehouses used by large online retailers” as an example. But watch out, these higher rates could impact you if your premises are valued at more than £500,000. 

3. Better conditions for scale-ups and capital raising via public markets

The Budget strengthened incentives for growing companies to attract outside capital or plan for a public listing. There’s a new three-year stamp duty reserve tax exemption for newly listed firms, with details laid out in the government’s business-tax support fact sheet.  

Additionally, existing enterprise tax incentives for scale-ups and fast-growing firms are being enhanced to encourage investment and expansion.  

Why this matters: 

If you’re seeking growth capital – via private investors, venture capital, or considering listing – the improved tax environment reduces barriers and improves the value proposition for investors. 

It makes exit strategies or expansion via capital markets more realistic than before, especially for firms on a growth trajectory. 

4. A stable corporatetax baseline 

The Budget confirms that the corporation tax main rate will remain at 25%, aligning with the government’s corporate tax roadmap.  

That provides a degree of certainty for businesses planning profits, reinvestment or capital structure ahead. 

But there are trade-offs: the government has also increased taxes on income from assets – including planned increases to dividend, savings and property-income tax rates. From April 2026, ordinary and upper dividend tax rates will rise by 2 percentage points.  

Why this matters: 

Medium-sized business owners who rely on dividends as part of their returns will see reduced take-home income; that might influence decisions about extraction of profits versus reinvestment. 

For businesses with substantial property or savings income, or plans involving asset disposals or distributions, the higher tax burden may reduce flexibility. 

If owners choose to retain profits for reinvestment instead of extracting, that could benefit growth – but distribution strategies will need careful review. 

Increased complexity and shifting burdens 

While we’ve focused on the upsides, the Budget will undoubtedly create challenges. Here’s a breakdown: 

Business-rates revaluation and high-value properties: As mentioned above, there will be higher multipliers for large properties (e.g. rateable value above £500,000). For firms occupying or acquiring high-value premises, business rates could increase.  

Transitional relief caps and revaluation effects: For those subject to revaluation, transitional relief (to cushion sharp increases) will be phased over several years – but may still mean rising bills.  

Dividend and income-from-assets tax hikes: This may reduce the attractiveness of extracting profits, especially if the business owner’s personal tax burden rises. 

Investment timing: The first-year allowance is generous but the standard writing-down rate will fall. That may complicate long-term depreciation planning. Assets excluded (e.g. cars, second-hand items, overseas-leased assets) will not qualify for first-year allowance.  

Regulatory complexity and compliance: As reliefs, thresholds and valuation bands change, compliance burden may increase – especially around business rates and reporting requirements tied to property valuations, expansions, or changes in occupancy.  

Increased wages: The Chancellor confirmed her pre-Budget announcement that the national minimum wage and living wage will rise. From 1 April 2026, the rate for over-21s will increase by 50p, a 4.1% uplift, to £12.71 per hour. Workers aged 18 to 20 will see an 85p rise – an 8.5% jump – to £10.85 an hour. Those under 18, along with apprentices, will receive a 45p increase, taking their minimum rate to £8 per hour, up 6%. 

We’re here to help 

If you’d like to discuss how the Budget may have created opportunities to invest in the growth of your business, please get in touch. 

This analysis is based on the official Budget 2025 document published by HM Treasury on November 26, 2025, and reactions from Capify experts and trusted business sources. While we strive for accuracy, tax and policy details may be subject to further clarification. Always consult your accountant or tax advisor regarding your specific circumstances.