TLDR (too long didn’t read): What you need to know
Most major Autumn Budget 2025 changes affecting SMEs in Cornwall take effect from April 2026. The big issues are rising employment costs, higher dividend tax, a frozen VAT threshold, and tighter digital compliance, alongside new opportunities through capital allowances, apprenticeship funding and expanded investment schemes. Below, we break down the five changes likely to have the greatest impact, with real-world examples of how Cornish businesses are preparing.
As we move past the headlines and into the detail of the Autumn Budget 2025, many business owners in Cornwall are beginning to ask what the measures actually mean for 2026 and beyond. While some have an immediate effect, the biggest changes start from April 2026, giving businesses time to plan rather than react in a rush.
This guide explains the five changes most likely to affect SMEs in Cornwall, with practical steps and local examples to help you make informed decisions.
If you’d like a detailed technical breakdown, you can also read our full guide to the Autumn Budget 2025 Cornwall.
The next increase to the National Living Wage takes effect from April 2026. Although employer NIC was addressed in a previous Budget and does not change here, the combination of rising wage levels and tightening compliance will continue to put pressure on payroll budgets.
What’s changing
• National Minimal Wage and National Living Wage increases from April 2026
• Payrolling of all benefits in kind becomes mandatory from April 2026
• Existing NIC and payroll costs remain elevated from previous Budgets
What this means
Labour-intensive sectors, including hospitality, retail, care, construction, clean energy and manufacturing, will need to plan carefully for the next uplift. Even small hourly increases can materially affect total wage bills.
Where to focus next
• Model wage costs for the 2026/27 year
• Review rota, shift and role efficiency
• Analyse profitability by service line or site
• Consider whether hours, roles or staffing structures need updating
How Harland can support
• Cashflow forecasting
• Scenario planning
• Management accounts to track staffing impact
Dividend tax rates rise from 6 April 2026, which will affect most owner-managed businesses across Cornwall.
What this means
Director take-home pay will reduce without forward planning, which can affect personal finances, pension planning and business cash reserves.
Where to focus next
• Revisit your salary/dividend strategy
• Review whether dividends should be timed differently before or after April 2026
• Factor higher rates into pricing, cashflow and profit-retention plans
How Harland can support
• Director Salary Review
• Personal tax planning
• Year-end strategy and forecasting
The VAT registration threshold stays frozen at £90,000, increasing the likelihood that growing or seasonal businesses will cross the limit in 2026.
What this means
Tourism, hospitality, retail, motor trades, construction and creative services are particularly exposed. Managing around the threshold becomes harder each year.
Where to focus next
• Forecast turnover for 2026 and assess likelihood of crossing the threshold
• Review pricing and margins under VAT-inclusive scenarios
• Consider whether voluntary registration provides more stability
• Plan VAT payments into your cashflow model
How Harland can support
• VAT strategy and registration advice
• Pricing and margin analysis
• Cashflow forecasting
The Budget confirms continued movement toward a fully digital compliance system.
What’s changing
• Full payrolling of benefits in kind required from April 2026
• Mandatory VAT e-invoicing from April 2029
• Expanded HMRC use of real-time and third-party data
• Strengthened penalty regimes under Making Tax Digital
What this means
Businesses relying on spreadsheets or manual bookkeeping processes will face increasing risk, inefficiency and administrative burden.
Where to focus next
• Review accounting and payroll systems
• Identify manual processes that should move to digital workflows
• Plan a phased transition to modern cloud accounting
• Ensure staff have the right training for new systems
How Harland can support
• Xero setup and migration
• Digital transformation planning
• Payroll and benefits support
While the Budget brings added pressure, it also provides opportunities for businesses that plan ahead.
What’s available
• Full expensing continues for qualifying equipment
• New 40% First Year Allowance applies to certain assets from January 2026
• Writing-down allowances change from April 2026 (special rate drops to 6%)
• Improving apprenticeship funding supports recruitment of younger staff
• EIS, VCT and SEIS investment limits expand from April 2026
• Clean tech, digital and manufacturing grants remain active
What this means
Well-timed investment can help offset some of the cost pressures introduced elsewhere in the Budget, and support business growth, skills development and productivity.
Where to focus next
• Map investment needs for the 2026–2028 period
• Review asset purchases in light of the new First Year Allowance
• Assess where apprenticeships may support workforce development
• Identify tasks that could be automated or digitised
How Harland can support
• Capital allowances modelling
• Investment and cashflow planning
• Apprenticeship and workforce cost analysis
Sector specific: How the Autumn Budget 2025 affects your businesses in Cornwall
These fictional examples reflect the real concerns and conversations we’re having with clients in different sectors and industries across the county, as they prepare for April 2026.
Agriculture, forestry and fishing
A farm in Helston: A mixed arable–livestock farm run by two generations
Budget impact:
Tighter agricultural and business property relief rules from April 2026 affect succession planning, while rising wage levels increase seasonal labour costs
Their focus: Early estate planning, diversifying revenue through natural capital schemes and improving machinery planning under new capital allowance rules
Harland support: Estate planning, forecasting and capital allowances
Clean energy
Renewables installations in Camborne, specialising in heat pumps and solar
Budget impact:
Wage increases, supply chain pressure and tighter reporting criteria impact project costing from 2026
Their focus: Investment timing, quoting accuracy and grant eligibility
Harland support: Cashflow planning and capital allowance guidance
Construction
A 12-person building firm in Falmouth, focused on extensions
Budget impact:
Higher wage levels from April 2026 and subcontractors
being pulled into VAT earlier will put pressure on project margins
Their focus: Debtor control, VAT planning and timing equipment purchases for 2026/27
Harland support: Management accounts, cashflow and full expensing modelling
Creative and Digital
Creative Studio in Newquay with 14 staff and external freelancers.
Budget impact:
Dividend tax rises from April 2026 and tighter digital compliance rules are influencing planning for the next two years
Their focus: Remuneration strategy, creative reliefs and digital transformation
Harland support: Personal tax planning, R&D and systems advice
Data and space
Satellite data and environmental analytics firm based in the Newquay Space Cluster
Budget impact:
Salary pressure for high-skilled staff continues, and digital compliance changes shape internal systems planning
Their focus: Retention schemes (including EMI), workforce planning and accessing innovation funding
Harland support: R&D support, EMI review and digital systems planning
Health and social care
Home Services provider in Truro with 46 staff
Budget impact:
Higher staffing costs from April 2026 tighten margins in a sector with constrained fee structures
Their focus: Reducing agency reliance, rota stability and service-line profitability
Harland support: Workforce planning and profitability analysis
Landlords and property investors
Cornwall Lettings Group with a mix of long-term rentals and holiday lets
Budget impact:
Dividend tax rises from April 2026 and tightening IHT rules affect long-term strategy
Their focus: Structure review, timing of disposals and dividend planning
Harland support: Property structuring and long-term forecasting
Manufacturing and engineering
Engineering firm in Redruth, serving marine and renewables clients
Budget impact:
Wage increases from April 2026 and equipment investment timing under new capital allowance rules are shaping their roadmap
Their focus: Pricing long-lead contracts and planning a two-year investment cycle
Harland support: Capital allowances modelling and management accounts
Visitor economy (accommodation, hospitality, leisure)
Family-run café and restaurant group in St Ives with 28 staff
Budget impact:
The April 2026 National Minimum Wage increase will significantly impact payroll costs, while the frozen VAT threshold challenges seasonal revenue management
Their focus: Rota efficiency, menu margin analysis and strengthening off-peak trade
Harland support: Pricing support and forward cashflow planning
Wholesale, retail and motor trades
Independent retail group with homeware shops in Truro and Falmouth
The frozen VAT threshold and wage increases coming in April 2026 tighten margins, particularly during tourist peaks
Their focus: Stock planning, margin reviews and developing more stable year-round income
Harland support: Cashflow forecasting and pricing strategy
