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.
Autumn Budget 2025: the five changes most likely to affect your business in Cornwall
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.
