The latest Budget contained a wide range of policy announcements, yet the Office for Budget Responsibility (OBR) suggests these measures will do little to shift the UK’s overall growth prospects over the next five years.

When compared with the forecast produced in March 2025, the OBR has increased its growth expectation for the current year. However, this is followed by downward revisions in every subsequent year through to 2030. For anyone looking to the Budget for a clear indication of where the economy is heading, the outlook remains uncertain.

No Further National Insurance Rise

One of the more reassuring aspects of the Budget was what was left unchanged. Following last year’s substantial increase in employers’ National Insurance contributions, there were no additional significant tax rises for employers.

That said, the Budget also offered limited pro-business incentives, which may raise questions about how future business growth will be supported. Even sectors that received targeted assistance, such as retail and hospitality, have cautioned that their overall costs are still expected to increase.

Two particular cost pressures continue to stand out: business rates and wages.

Business Rates: Some Relief, But Higher Costs Possible

Business rates remain a key concern for many high street businesses, particularly with the 2026 revaluation leading to higher rateable values for a number of properties.

While many shops, pubs and hospitality venues will have their rates calculated using a lower percentage of property value, the combination of higher valuations means many businesses are still preparing for increased bills.

From a cash flow perspective, this is an area worth reviewing sooner rather than later.

Wage Costs: Positive for Employees, Challenging for Businesses

Increases to the national minimum wage will provide a welcome boost for workers, especially younger employees. However, for employers already operating on tight margins, this represents another layer of cost pressure.

As a result, some businesses may need to reconsider recruitment plans, staffing levels or pricing strategies to absorb the additional expense.

Pension Salary Sacrifice Cap

The £2,000 cap on pension salary sacrifice arrangements has also drawn attention. Contributions above this threshold will become subject to both employer and employee National Insurance contributions, significantly reducing the attractiveness of these schemes.

There are concerns that this change could negatively affect business investment and pension funding levels. It is important to note that these rules are not due to take effect until 6 April 2029, leaving time for both employers and employees to benefit from the current arrangements.

If you would like guidance on how pension salary sacrifice works, please get in touch and we would be pleased to offer personalised advice.

Broader Access to Investment Incentives

One longer-term positive for growing businesses is the expansion of the Enterprise Investment Scheme (EIS).

EIS offers tax incentives to individuals investing in smaller companies. From April 2026, investment will be permitted into businesses that have grown beyond the previous size limits, potentially opening up new funding opportunities.

What You Might Want to Do Next

Although the Budget’s growth forecasts may not be particularly encouraging at a national level, your business does not have to mirror the wider economic picture. Many organisations continue to grow by concentrating on factors within their control.

Practical actions to consider following the Budget include:

  • Reviewing your business rates valuation and confirming whether you qualify for transitional relief.

  • Updating financial forecasts to reflect wage increases coming next April.

  • Reassessing any pension salary sacrifice arrangements and ensuring employees understand how future changes may affect them.

  • If you are looking for investment, exploring the revised EIS rules to see if they create new opportunities for your business.

If you would like support in navigating these changes, or simply want a second opinion on how they impact your plans, please feel free to get in touch. We would be very happy to help.