Beyond the budget: A 5 Year Plan for UK business owners – What Budget 2025 means for you

Chancellor Rachel Reeves’ speech on Budget 2025 outlines a five-year fiscal roadmap to raise taxes through fiscal drag and wealth extraction measures rather than headline income tax hikes. Business owners need to act now to mitigate future risks. This article provides practical actions for immediate tax planning and long-term strategies through 2030.

The Autumn Budget 2025 has been presented as “stability,” but the underlying direction is clear. Tax thresholds are frozen, business property will be revalued, and the Chancellor has signalled that higher earners and wealth extraction will be “part of the story.” Taken together, this is not a one-off adjustment. It’s a five-year roadmap to raise more from businesses and business owners through fiscal drag, property revaluation and a renewed focus on how owners extract, retain, and pass on wealth. This is without lifting politically sensitive headline rates.

Oldfield Advisory has worked with owner-managed businesses for nearly 50 years. We’ve seen these cycles before. The most successful business owners are those who plan several years ahead, treating fiscal policy as a strategic consideration, not a year-end compliance event. This article explains what that roadmap looks like for UK business owners and directors. It also invites you to our free Autumn Budget 2025: Rapid Reaction webinar on Wednesday 26 November 2025 at 4:00 PM (London), where our specialists will translate the announcements into actions for your business and personal finances.

Threshold freezes. Stealth pressure on drawings

What is happening:

In line with the Chancellor’s speech, the 2025 Budget has frozen key tax thresholds (e.g., the personal allowance and higher rate tax thresholds) until at least 2028. This means that rising income will gradually push business owners into higher tax bands, creating a stealth tax increase without explicit rate hikes. Reeves hinted at this in her speech, explaining that the government's aim is to raise more through fiscal drag rather than direct tax increases.

Why it matters:

For UK business owners and directors who are accustomed to the traditional modest salary plus dividend model could find themselves facing higher marginal tax rates due to frozen thresholds. For example, earnings above £100,000 cause the personal allowance to taper off, resulting in a high marginal tax rate of 60%.

Actions to take

• Run simulations for drawings, factoring in living needs, inflation and maybe family requirements.
• Model salary and dividends over the next two years in relation to these drawings, factoring in fiscal drag.
• Plan multi-year remuneration strategies, including pension contributions and dividend timings, to optimise net income.
• Treat your own package like you would treat a key hire. You need a structured plan for how value moves out of the company and into your hands, and you need that plan to run for more than one tax year.

Property. Business rates revaluation lands in April 2026

What is happening:

Business rates will be revalued based on April 2024 rental values, affecting businesses with physical premises starting in April 2026. This aligns with the government’s strategy to raise more revenue from businesses reliant on real estate.

Why it matters:

If your operating model depends on a physical footprint in England or Wales, the cost of that footprint could increase as the new valuations take effect. If you sign a long lease, buy premises or hold underused space, you may be locking in a higher cost base for several years. Specialist and high-value premises such as labs and advanced engineering space are already warning that their next rates bill could rise sharply, although final multipliers and any relief packages will not be confirmed until closer to April 2026.

Actions to take

• Run a business rates exposure review for every site you operate. Build those numbers into budgets for the next 12 to 24 months.
• When you look at relocation, expansion or acquisition of additional space, use a post-April 2026 cost model, not today’s bill.

Profit extraction, succession and exit are under the spotlight

What is happening:

Wealth extraction strategies - dividends, capital gains, and inheritance reliefs - are likely to face higher taxes, as the government looks to target wealthier individuals. The Chancellor emphasised this in her speech as part of a wider plan for long-term fiscal sustainability.

Why it matters:

The government is increasingly focused on how owners extract wealth, with potential changes to Business Asset Disposal Relief (BADR) and capital gains tax. For example, a share sale or management buyout could face a higher tax bill if reliefs are tightened.

For business owners planning to sell, exit, or transfer wealth, the potential changes to tax reliefs and rules on profit extraction could increase tax liabilities. With the freeze on inheritance and capital gains thresholds, delaying these plans could cost more in the future.

Actions to take

• Accelerate succession planning: If planning an exit or sale, start now to align with current rules. If you are considering an exit or partial exit in the next 12 to 24 months, prepare now so you are not reacting after the announcement.
• Revisit profit extraction strategies: look at all options for tax-efficient extraction
• Update shareholder agreements and estate planning: Ensure your shareholder agreements, wills, and trust structures are updated to reflect current rules and to protect against future tax increases

The long-term signal. 2025 to 2030

• Frozen thresholds: Continuing to pull business owners into higher tax bands.
• Business rates revaluation: A change in property taxes with significant implications for businesses reliant on physical premises.
• Wealth extraction under scrutiny: With a growing focus on dividends, capital gains, and succession planning, taxes on wealth extraction are likely to rise.

This five-year fiscal roadmap signals a need for long-term business strategy and tax planning. Business owners can no longer afford to react only at year-end. Instead, adopting a five-year horizon for tax planning, property decisions, and succession planning will help mitigate future risks and optimise growth. These discussions now sit at board level and should not be downplayed.

Quick actions checklist

1. Register for our Autumn Budget 2025: Rapid Reaction Webinar (Wednesday 26 November, 4:00 PM London). It’s on Zoom!
2. Map out your succession and inheritance exposure with our expert guidance. We have a guide for that, Download yours here.
3. Run updated drawings and remuneration simulations for 2025 - 2027.
4. Review 2026 business rates exposure and factor these into property strategies and forecasts.
5. Review exit or succession plans against future tax changes.
6. Treat Budget 2025 as a five-year planning framework, not a one-off announcement.

Why plan with Oldfield?

Oldfield Advisory has guided owner-managed businesses for nearly 50 years through fiscal cycles, restructures, exits, and succession events. Our experience ensures that clients translate every policy change into actionable, holistic strategies that protect both the business and your personal goals. If you’d like to discuss what Budget 2025 means for your company’s next five years, contact your adviser to explore a strategic planning review; otherwise, use the form below. 

Please note: This article is for general information purposes only It does not constitute financial or tax advice. Tax rules can change, and the correct approach will depend on your specific circumstances. You should seek advice from a suitably qualified professional before taking action.