The Autumn Budget: why uncertainty is now the biggest cost for business

With John Healey’s first Budget due on 28 October 2026, speculation is already shaping decisions. The Institute of Directors’ latest confidence index found that seven in 10 business leaders plan to freeze or cut investment in the coming year, citing tax levels and policy uncertainty.

From where we sit, advising businesses, investors, landlords and families, that hesitancy is understandable. But waiting is a strategy too, and it carries its own cost.

Transactions: build in flexibility

Capital gains tax has been described as the ‘front runner’ among the revenue-raising options, with proposals circulating to align it with income tax. For anyone selling a business or a significant asset, that is a live concern.

Our advice is not to rush. Deals done in haste tend to be done badly, and Budgets often include anti-forestalling rules designed to catch transactions pushed through beforehand.

Instead, make sure live deals can absorb a change. That means knowing whether exchange or completion fixes the tax position, checking that price and completion mechanics can cope with a mid-deal rate change, and agreeing now who bears that risk.

Business owners are also still absorbing April’s changes to inheritance tax reliefs, with unused pensions coming into the inheritance tax net from April 2027. Succession plans drawn up even two years ago need a fresh look.

The arithmetic behind the rumours

The Chancellor’s room for manoeuvre is narrow. Thirty-year gilt yields hit 5.89% in September, their highest level since 1998, and borrowing in the year to August was £8.1bn above the Office for Budget Responsibility’s March forecast. Some reports put the remaining headroom as low as £5bn.

With the Prime Minister holding to the manifesto pledges on income tax, National Insurance, VAT and the 25% corporation tax cap, any new revenue must come from elsewhere. Assets, property and selected sectors are the obvious candidates.

Property: plan for more, not less

Real estate is firmly in the Treasury’s sights. The Times reports that lowering the high-value council tax surcharge threshold from £2m to £1.5m is a ‘live discussion’. That would roughly double the number of homes caught before the charge even starts in April 2028.

Holiday lets could be treated as second homes for council tax. Stamp duty abolition appears to be off the table, but advisers expect scrutiny of structures that hold commercial property in offshore companies to sidestep it.

There’s better news for the high street. The Prime Minister has promised to go further on business rates, and the small business rates relief threshold, frozen at £12,000 for a decade, could rise towards £17,000.

Landlords and tenants should check how their leases allocate rates and service charge costs before any change lands.

Distress: the quieter story

The headlines focus on tax rates, but the more pressing risk for many businesses is cash. Energy costs, higher borrowing and late payment, with an estimated £26bn outstanding at any one time, are squeezing working capital.

The Insolvency Service is also stepping up action against abusive phoenixing. Directors of businesses under pressure should remember that their duties shift towards creditors as financial difficulty deepens.

Early, candid conversations with lenders, landlords and HMRC almost always widen the options available. Late ones narrow them.

Expect more disputes with HMRC

Every Chancellor relies on anti-avoidance measures and investment in HMRC to close the gap. HMRC is consulting on an explicit ‘duty to correct’ errors in tax returns and on bringing forward self-assessment payment dates from 2029.

More enquiries, and more disputes, are likely to follow. Good records and early advice remain the best defence.

What to do now

Our message to clients is simple:

• Map your exposure to the measures most discussed
• Don’t restructure or sell on the strength of rumour alone
• Build flexibility into documents already in negotiation
• Be ready to act quickly once the detail is published.

The Budget speech is only the start. The fine print in the accompanying documents and draft legislation often matters more.

Budgets reward those who prepare and penalise those who panic. The businesses that come through 28 October best will not be the ones that guessed right. They will be the ones that planned for several outcomes and kept their options open.