In KPMG’s recent private enterprise barometer survey 32% of private business leaders were concerned with taxation increases, and the headwinds that such increases create for further growth.
So as a private business leader, how do you approach the budget on 26 November? What is the tax landscape for private business looking like? Are there green shoots of optimism? And what, if anything, can be done in the run up to the next budget?
In the last budget, private business was significantly impacted through increases in Employers National Insurance and capital gains tax which have added to pressure on the cost base, in addition we have the planned changes to inheritance tax due to come into force in April 2026 which is significant for many. On the assumption that there aren’t further increases in these areas, and that headline rates on the big three of income tax, national insurance and VAT will remain unchanged, what is left for the Chancellor to focus on to balance the books?
Essentially, I see this as boiling down into three areas being raising, growing and collecting.
Firstly, raising taxes through a combination of freezing current thresholds, reducing some: think of VAT, pensions and personal allowances, as well as potentially expanding the scope of tax in certain areas like National Insurance on rental income or maybe even VAT on private healthcare.
Secondly, using the tax framework to stimulate economic growth and generate more tax, so alongside more general government investment, using incentives like capital allowances, R&D and patent box, providing preferential tax treatment for certain types of investments, and reforming existing regimes such as Stamp Duty Land Tax.
And thirdly, by the government investing more heavily in HMRC, both people and technology, in order to maximise tax collection through increased audit activity and greater use of analytics and AI.
So are the concerns expressed by 32% of private business justified? Yes, I think they are, and whilst these will vary on a case-by-case basis, as a business leader, you need to be ready to assess the impact of the November 2025 budget on your businesses and to react quickly to manage the impact of those changes.
In light of almost certain tax rises it is important for you to ensure that you are maximising tax efficiency, such as maximising tax cash levers, and making use of all the incentives and reliefs available to you. In addition, now is a good time for you to reflect on whether the processes, controls and governance used to manage tax compliance are working effectively or whether improvements can be made before HMRC, with potentially more people, improve technology, and even AI capability, come calling.
If you want help with any of these actions, please reach out for a conversation with our experts. Or simply follow our Autumn Budget webpage for the latest updates.
