Event Recap: Autumn Budget Breakdown

KPMG’s Matt Evans joined the Norwich BID Breakfast on 4 December 2025 to unpack the Autumn Budget. While Matt noted a generally steadier economic outlook, he also acknowledged the challenges certain measures may bring and set out practical steps for Norwich businesses on rising employment and business costs, new compliance risks and upcoming systems changes.

Matt opened with cautious optimism regarding the general economic outlook, stating that it is better than many headlines might suggest. More investment is coming into the UK, and greater stability should encourage that further. This could lead to a raft of positives over the coming years. With inflation easing towards the Bank of England’s 2 percent target, interest rates may step down over the coming period: there could be a move to around 3.75 percent in December, approximately 3.5 percent in 2026, potentially 3 percent thereafter and, in time, a little lower.

So, what should Norwich businesses be thinking about as a result of the budget? Matt recommended that it’s really important for local firms to plan as much as they can now around the budget changes.

A headline measure announced at the budget was the reform to pension salary sacrifice. From 2029, a new £2,000 annual cap will limit the value on which individuals receive National Insurance relief through salary sacrifice. This also creates a cost for companies. Currently, employers often benefit from around 15% National Insurance savings when individuals sacrifice salary into a pension scheme. That’s a cost that businesses will need to bear going forward. It’s important to ask what this change means for your company. Are there alternatives that you can use? Can you adjust how you provide pensions, so you do it through employer contributions rather than salary sacrifice? There may still be a saving to be had there, so a little planning now will help.

Secondly, the National Minimum Wage increases were broadly expected and will add pressure to payrolls from 1 April 2026. As a business, are you ready for the increases? What can you do around your staffing levels, scheduling and pricing?

Thirdly, changes are coming to umbrella company arrangements that could make end-users jointly and severally liable for PAYE and National Insurance that should have been paid by umbrella workers. If you are the end user of those services, Matt’s advice was to tighten due diligence, review your contracts and controls so that you’re protected as much as possible against those claims.

There were also positives for growth and participation. On Enterprise Management Incentive (EMI) relief, the qualifying thresholds for companies have been widened, the holding term for individuals has been increased, and the amount of shares that can be held within an EMI scheme has been doubled. You can also adjust existing schemes to fall within the new rules. Matt stated that this was a really positive move that will encourage employee engagement.

Similarly, the Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) schemes have been improved, with doubled thresholds for relief. That means more companies will qualify, helping to unlock investment at different levels if you were starting to butt up against the old limits. There’s good news there for local businesses.

Matt also discussed several other changes businesses should be mindful of. Compliance pressures are increasing. Initial late-filing penalties are rising, with several regimes seeing penalty amounts doubling. VAT e-invoicing is also expected to become mandatory by 2029 and HMRC will require more detailed digital reporting. Matt’s message for employers was clear: invest early so that finance and payroll systems can manage e-invoicing and new salary-sacrifice rules.

Business rates were also discussed. Although the headline multipliers have marginally decreased, the latest revaluation of commercial properties means many rateable values are rising. This is expected to result in a net increase in business rates liabilities for many sectors, particularly those in hospitality and retail.

When attendees were asked what they expect to be the most significant challenges arising from the Budget, business profitability ranked as the highest concern. Staff retention was second, followed by tax implications for shareholders.

For a more detailed economic analysis, businesses can read KPMG’s latest UK Economic Outlook report.