Fall 2025 Budget – a big deal for accountants and their clients

This year’s budget was presented after much media speculation, an initial “leak” of the OBR report, and some controversy in the House of Commons as a result.

However, the most important thing is the details of the budget itself.

What does Chancellor Rachel Reeves think is important to accountants and the business communities they serve?

Top 4 announcements that will impact your clients

The budget has several important announcements. Of these, there are four areas that will worry some business leaders.

1) Salary sacrifice limit

Salary sacrifice pension contributions above £2,000 will be taxed from 2029, in a bid to raise £4.7 billion annually.

Ahead of the budget, REBA surveyed businesses and found that 99% said they would be impacted if this happened.

Former pensions minister Steve Webb, now a partner at LCP, said: “The decision not to implement these changes until 2029 creates a huge opportunity for companies to restructure the way they offer pay and pensions to mitigate or eliminate these new costs,” Webb said.

“There is a strong possibility that this policy will only deliver a fraction of the amount the chancellor hopes.”

What to do?

To overcome this problem, the business world must seek advice from accountants regarding tax planning. The question is whether the salary sacrifice scheme is still good for them. It is important to review and, if necessary, restructure pension arrangements and benefit schemes.

In light of this announcement, many accountants will be in a position to act as long-term advisors. Where should a client’s business invest now? Keeping things as they are may no longer be tax efficient.

2) Dividend taxes increase

The base dividend income rate has increased from 8.75% to 10.75%, and the higher rate has been adjusted from 33.75% to 35.75%.

These rates will put UK rates among the highest in the world, and will impact many business owners served by accountants. An accountant’s role here is to help them with financial planning – is it still worthwhile for owners and entrepreneurs to earn dividends if they are now subject to higher taxes?

3) Freezing of income tax thresholds

Income tax thresholds will not change until April 31, so there will be no increase in personal allowances. As a result, those with the same income may experience a reduction in net income. These changes are likely to have a greater impact on sole traders on lower incomes.

This is another burden for this client. Of course, they will also struggle with the added burden of Making Tax Digital during this time and, as we will see in the next section, higher wages if they choose to hire and share responsibilities.

4) Wages rise

From 1 April 2026, the UK National Living Wage for those aged 21 and over will rise to £12.71 per hour, an increase of 4.1%. Meanwhile, the minimum wage will rise by 8% to £10.85. affects ages 18-20 years). Additionally, 16 and 17 year olds, as well as those on apprenticeships, will see a 6% increase to £8 per hour. The question for clients is how they will get the extra money, as this is the second year in a row that a minimum wage increase has been introduced (and in addition to the increase in Employer National Insurance contributions from April 2025).

A new era of collaboration

Now, more than ever, accountants need to build collaborative partnerships with clients. Long gone are the days when financial experts could only help with compliance, not provide advice.

The challenge is to prove value now, while leaders are already worried about costs. Your advice will save them money and help them grow, and is worth paying for – but clients need to realize how important your company will be.

Digital systems will help your clients understand live data, capturing critical information and enabling quick decision making. With such a system, accountants can be proactive, see information in real-time, and clients can understand the bigger picture.

It’s time for greater efficiency

My colleague, Jenny Strudwick, IRIS Accounting Director, said, “The current budget delivers a wave of significant tax changes at a time when most practices are already stretched thin in managing Companies House reform, MTD compliance and busy season pressures. “The immediate question for company leaders is not whether clients need guidance – they will need guidance – but how to deliver without being overwhelmed by demand.

“This budget will test the resilience of businesses across the country, and accounting firms have an important opportunity to demonstrate foresight and provide clarity, as clients will look for guidance, reassurance and in some cases help navigating actions they don’t like.”

He added, “The companies that are able to navigate this successfully will be those that are able to resist the urge to react to everything at once and remain flexible enough to react quickly to the most pressing changes. Intelligent segmentation is essential: identify which clients are truly impacted by today’s announcements, for example, entrepreneurs facing increased National Insurance burdens, high net worth individuals or property-rich clients and focus on those first. Proactive and targeted communications to these groups signal that you are thorough and ready to support them Combining scenario modeling, proactive remuneration review, accelerated succession planning and clear client communications can help clients navigate uncertainty while strengthening their advisory role and protecting revenue.

“The more difficult challenge is creating the capacity to have these conversations right. For most companies, this means working more efficiently and reducing administrative burdens through technology, automation or outsourcing. It also means making intentional choices about priorities and accepting that some things will need to wait. Practices that can strategically create that space, rather than letting urgency dictate everything, will safeguard the quality of service and the well-being of teams as they face the future.”

Expand your team and deploy solutions that help you concentrate on advising

Check out our outsourcing options, which can help you take care of the admin and focus your efforts on what matters most.

Also look at digital tools and see what can drive efficiencies – including Dext and solutions like IRIS Elements and IRIS Cloud Accounting.

Get insights from experts in our Budget 2025 webinar

Join me as I discuss the latest budget findings with experts Paul Lodder FCCA – Vice President of Product Strategy and Accounting Expertise (Dext), Paul Aplin OBE – Tax Expert.

Together, we’ll explore the potential impact on tax, compliance and business planning and help you prepare for the year ahead.

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