The UK Autumn Budget 2025 delivered a mixed bag for consumer-facing industries.
While small businesses in retail, leisure, and hospitality welcomed targeted relief, larger operators warned of rising costs and missed opportunities for growth.
The Business Rates Reform will offer relief for some, and pain for others. From April 2026, more than 750,000 retail, hospitality, and leisure properties with a rateable value under £500,000 will benefit from permanently lower business rates multipliers.
A £4.3 billion transitional support package will cushion steep increases after revaluation.
However, the reform is funded by a higher multiplier (+2.8p) on properties over £500,000, hitting supermarkets, hotels, and leisure complexes hardest. Industry bodies fear this could lead to store closures, job losses, and reduced investment.
Wage pressures and employment costs is another area of complexity. The National Living Wage will rise to £12.71/hour for workers aged 21+ and £10.85/hour for 18–20-year-olds from April 2026. Apprentices and under-18s will earn £8/hour. Hospitality alone faces an estimated £1.4 billion extra cost, with similar pressure on leisure venues and retail chains.
Employers also face frozen tax thresholds until 2031, higher dividend taxes, and capped salary-sacrifice NIC exemptions from 2029, adding to payroll complexity.
It was also announced in the Budget that English mayors will gain powers to introduce tourist taxes, raising concerns about competitiveness compared to EU destinations. A new National Licensing Policy Framework promises modernized rules, including “hospitality zones” for alfresco dining and extended hours, a welcome move for operators seeking flexibility.
In terms of investment incentives, businesses can claim a 40% First Year Allowance for plant and machinery, alongside full expensing for qualifying assets – supporting investment in kitchens, leisure facilities, and retail fit-outs.
Amanda French, Head of Retail & Leisure at national law firm, Clarke Willmott LLP said, “The Budget offers short-term relief for smaller operators but leaves structural challenges unresolved. Wage pressures, fiscal drag, and tourist levies risk dampening demand and profitability across all sectors.
“For larger businesses, the combination of higher rates and delayed import duty reforms could mean tough decisions ahead.
“However, hopefully, the certainty now that the budget has been delivered, will reinstate some consumer confidence and entice customers to spend their disposable income over Christmas in our shops, pubs, restaurants and hotels, providing trading resilience.”
