The UK Autumn Budget 2025: Strategic Analysis for The Deal Room | Club (TDRC)

The Opportunities: Investment & Skills Growth
Long-Term Infrastructure Certainty: The commitment to maintain multi-year capital budgets to 2029-30 provides much-needed stability, a factor the Institution of Civil Engineers (ICE) highlighted as crucial for reducing the risk of "stop-start investment cycles"

Read more:
https://www.ice.org.uk/news-views-insights/inside-infrastructure/uk-budget-2025-takeaways).

Accelerated Capital Investment Incentives: The focus on Capital Allowances, including the new 40% First-Year Allowance (FYA) and Full Expensing, allows businesses to deduct a significant portion of the cost of new plant immediately. This offers "immediate tax relief and improved cash flow," according to analysis from Property Capital Allowance

Details:
https://www.propertycapitalallowance.com/autumn-budget-2025-changes-to-capital-allowances/).

Apprenticeship & Skills Support for SMEs: To tackle the critical skills gap, the Chancellor announced that training for under-25 apprenticeships will now be completely free for small and medium-sized enterprises (SMEs). This removes a "significant barrier for businesses looking to develop young talent," as observed by Wise

View analysis:
https://wise.com/gb/blog/autumn-budget-what-it-means-for-your-business).

The Challenges: Rising Tax & Retrofit Gap
Higher Tax Burden for Owner-Managed Firms: The increase in both the basic and higher rates of dividend tax by two percentage points from April 2026 directly impacts limited company owners. ByteStart noted this change "affects millions of small limited company owners" who rely on dividends as part of their income

Tax implications:
https://www.bytestart.co.uk/news-insights/dividend-tax-april-2026/).

The Missed Retrofit VAT Opportunity: Despite significant industry calls, the Budget failed to introduce comprehensive VAT reform for residential retrofit projects. The Chartered Institute of Building (CIOB) views the current 20% VAT imposition as making the more sustainable retrofit option "far less financially attractive" than new-build or demolition

Industry reaction:
https://www.pbctoday.co.uk/news/planning-construction-news/industry-bodies-react-autumn-budget-2025/157397/).