Rachel Reeves has used her second Budget to lock in a new phase of tax-heavy, stability-first economic policy, raising the overall tax take while promising to protect public investment and ease pressure on household bills.
The mood heading into today’s statement was already tense. Hours before the Chancellor rose to speak, the Office for Budget Responsibility accidentally published its full Economic and fiscal outlook on its own website via an unadvertised public link, revealing plans to raise taxes by up to £26bn a year by 2029–30, mainly through freezing personal tax thresholds and a suite of smaller measures. The watchdog removed the document, apologised for what it called a “technical error”, and launched an investigation into what it admitted was an unprecedented breach.
Politicians on all sides condemned the leak of what deputy speaker Nus Ghani described as market-sensitive material, with shadow chancellor Mel Stride calling it “utterly outrageous” and suggesting it could amount to a criminal act, while Reeves herself labelled it “deeply disappointing” and a serious error.
Parts of the business and cybersecurity community were equally blunt. Kenny MacAulay, CEO of accounting software platform Acting Office, said “It’s truly astonishing that such a market sensitive document could find its way online via official channels in advance of the Chancellor’s speech. Basic compliance requirements should be in place to prevent this from happening, and a complete review is required about how and why such a major breach would take place.”
Graeme Stewart, head of public sector at Check Point, went further, describing it as “a major security breach which warrants a full investigation”.
“This incident should underline the risks associated with sloppy document management, which could lead to hackers and fraudsters exploiting data leaks to play the markets. There are no excuses for such incidents to occur, and the government needs to initiate a complete rethink of its publication strategy.”
In the event, markets broadly took the eventual Budget in their stride. Sterling ticked up, gilt yields slipped back after a brief rollercoaster around the leak, and UK equities gained ground, as investors signalled cautious approval for a package that delivers more fiscal headroom without an immediate shock to borrowing costs.
The show goes on —
For business, this was not a ‘big bang’ giveaway. The Chancellor left the main rate of corporation tax at 25% and protected large-scale capital spending, but confirmed an extended freeze on income tax and National Insurance thresholds to 2030–31, higher taxes on dividends, savings and property income, and new levies including an EV mileage charge and a high-value property ‘mansion tax’ from 2028.
A fuller breakdown of the measures for boardrooms — from capital allowances and business rates to the EV mileage charge and changes to investment income — is available on Business Quarter Executive.
Against that backdrop, early reactions from across the business community reveal distinct camps emerging on whether this Budget backs enterprise or merely reshuffles who pays.
Among growth investors, the main concern is whether the Budget keeps the UK attractive for scaling companies. Jamie Roberts, managing partner at YFM Equity Partners, argues that the statement “reflects the economic pressures the UK is facing, but the UK’s long-term growth story ultimately depends on backing the entrepreneurs building and scaling businesses. With weaker productivity and higher operating costs already challenging founders, sustained investment in the people driving innovation is essential.”
He is upbeat on the shift in Venture Capital Trust qualifying rules to include more established businesses, calling it “a real game changer” for regional companies. “Regional businesses often scale over a longer timeline and the previous requirement to secure a first VCT-qualifying investment within a fixed window meant too many strong companies missed out on essential early growth capital. This change means investors can support high-growth businesses for longer, helping ambitious management teams scale across the UK.”
At the same time, Roberts cautions that while the UK “remains one of the strongest environments in the world to start and grow a business”, that competitive edge cannot be taken for granted without a policy framework that gives growing companies the confidence to invest, hire, and innovate.
Meanwhile, clean transport voices welcomed tangible EV support, while questioning the wider net-zero plan, Thom Groot, chief executive of The Electric Car Scheme, calls the Chancellor’s £1.5bn commitment to electric vehicles something that “should be applauded.”
He says: “Further provisions for the Electric Car Grant, investment in electric charging points, and the retention of electric vehicle salary sacrifice in its current form, will help more middle-income working families to access cleaner transport they otherwise couldn’t afford, delivering positive health and societal outcomes that benefit everyone.”
Groot sees salary sacrifice as rapidly becoming the largest catalyst of EV adoption in the UK, but describes the Budget as a missed opportunity to extend similar support to solar panels and heat pumps to help households with rising energy bills.
Short-term views —
Property and wealth-focused commentators were more critical, and unsurprisingly so. The new high-value property levy — widely branded a mansion tax — is one of the most contentious measures among property voices. Specialist property expert Mark Hughes at Pure Property Finance describes taxing homes over £2m from April 2028 as “extremely short-sighted”, warning it “risks creating liquidity issues for owners who are asset-rich, but when it comes to cash, actually don’t have that much freedom, forcing sales and destabilising the upper end of the market.”
On the decision to tax investment income more heavily than wages, Lee Murphy, managing director of The Accountancy Partnership, said: “It was something that had been predicted for a while, but the announcement from Reeves that investment income will now be taxed more heavily than wages will mean that property investors will face a huge shift in landscape. This change will increase the cost of holding and profiting from a property, and many landlords will need to review their portfolios and consider restructuring to remain tax-efficient.
“It’s another clear signal that the government is prioritising earned income over passive returns, which is likely going to dampen investor appetite in the property market.”
Murphy also warned that the introduction of a £2,000 salary sacrifice threshold from April 2029 will remove a key advantage for employees and directors using pensions to manage tax, saying “it’ll mean higher NI bills on pension contributions that’re above the thresholds, and for employers, it’ll increase payroll costs at a time when many businesses are already feeling let down, especially after last year’s budget.”
Not all near-term decisions were viewed quite as critically, however. From a succession perspective, Christian Carr, partner at law firm Spencer West LLP, said: “Halving the capital gains tax relief on sales to employee ownership trusts will likely cool momentum in the short term. It raises founder tax costs, squeezes headroom for deferred consideration and is likely to bring seller price expectations closer to independent valuations.”
Questions around execution —
Technology and labour market experts focused on execution. Ash Gawthorp, CTO and co-founder at Ten10, said that while the Budget sets out a wide range of revenue-raising measures, “the UK still risks relying too heavily on tax changes to close fiscal gaps at a time when businesses continue to face rising costs and strained operating conditions.”
Gawthorp paid particular attention to the chancellor’s talk of AI investment for efficiency improvement. “There is still no clear strategy for how departments will build the technical capability required to deliver these gains,” he added. “AI can remove manual processes, accelerate decision-making and support organisations in achieving more without increasing cost, but these outcomes depend on structured planning, the right skills and consistent adoption.”
On the labour front, Naomi Clayton, chief executive at the Institute for Employment Studies, welcomed the focus on youth employment but was eager for the government to outline a detailed plan. “Nearly a million 16-24-year-olds – 1 in 8 young people – are out of work and not in any form of education or training, and the government should aim to ensure that every young person can access the support they need,” she said.
“Meanwhile, the OBR assesses that the government’s new Pathways to Work support offer for disabled people and people with health conditions will only have a modest impact on employment, and there appears to be no plans to fast track this investment. With unemployment rising and health-related economic inactivity at a record high, it is critical that the government sets out more details on its plans, accelerates progress where it can and scales up what works.”
It is still the early hours after the Budget, and many of today’s measures will take years to work through company accounts and household finances. These are the first responses in the hours after the Chancellor took to the box; in the days ahead, boardrooms, founders, and investors will be working through the small print — and trying to make sense of what this Autumn Budget really asks of them next.
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