Budget & Beyond event 2025: What business owners need to do next

A Budget that tinkers, but still bites

This year’s Budget wasn’t dramatic, but that doesn’t mean it was painless. Many of the changes are small on their own but significant in combination.

• Limited companies face rising tax on dividends and investment income, plus increased Companies House fees and penalties.

• Self-employed business owners may now be more tax efficient where all profits are drawn personally.

• Landlords and investors face higher tax and tighter interest relief restrictions from April 2026.

• Every individual is affected once you factor in the changes to IHT and how pensions will be treated from 2027.

The message was clear: understanding your structure and planning early will matter more now than at any point in the last decade.

What this means for business owners:

1. Structuring your business

The traditional advantage of limited companies is narrowing.
Where profits are retained, a company can still be efficient but where owners draw most of the profit personally, self-employment or an LLP may now deliver better outcomes.

2. Dividend timing and drawings

With dividend tax rising in April 2026, some business owners may benefit from bringing forward additional drawings this year. This needs careful modelling based on your income levels and future plans.

3. Business exits and succession

Reduced reliefs for EOTs and the continuing cap on BADR mean exit strategies need revisiting. Owners considering a sale in the next three years should review timing, structure and tax exposure now, not later.

Inheritance Tax changes

Emma covered the area with practical examples that showed how:

• Business assets may lose exemption from 2026

• Pensions enter the estate from 2027

• Even “normal-sized” estates can see their IHT bill increase sharply within a short timeframe

The message was simple: IHT planning cannot be left until retirement, a sale, or ill health. Early action creates the greatest scope to reduce long-term tax. 

Family Investment LLPs and long-term planning

For families with property or investment portfolios, Family Investment LLPs remain one of the most effective long-term planning tools:

• Freeze today’s value inside your estate

• Allow future growth to pass to the next generation

• Retain control and income through profit-sharing arrangements

• Reduce exposure to IHT over time

These structures are not overnight solutions but for the right family, they can deliver significant long-term protection.

Making Tax Digital: A new reality 

From April 2026, landlords and self-employed individuals with a combined turnover above £50,000 will need to make quarterly digital submissions to HMRC.

Thresholds are reducing to:

• £30,000 in April 2027

• £20,000 in April 2028

What was once an annual process will become an ongoing reporting cycle.

Our advice: Get separate bank accounts for self employed and rental income, and start looking at software now. Speak to us for advice.