Looking for a Fresh Economic Start?
Westminster’s calling this Budget a reset. When Rachel Reeves delivered her Autumn Budget, she promised stability, growth, and, dare we say it, a fairer shake for everyone. She’s aiming to tame inflation, spark investment, and drag our tax system into the modern age.
And after the weeks of intense speculation, the OBR published the Budget early, causing chaos in Westminster circles and adding an element of farce to a long-awaited event.
But what does all this drama mean for a typical Glasgow restaurant owner or Edinburgh manufacturer? Of course, it’s complicated, and every business is different, but they should find some welcome relief in places. Other areas? Maybe not so much…
But here’s the thing: Budgets aren’t just numbers on a spreadsheet. They can often reshape your entire operating environment, from what you pay the taxman to whether you can afford a new employee.
Where We Stand Right Now
As you will know, inflation’s been stickier than a Wetherspoons table. The government think this Budget will finally start the downward trend next year, but we’ve been hearing this line for quite a while now. It’s always next year… But interest rates have started creeping downwards. Slowly… Borrowing costs are still high and may not go back to the level they were at a few years ago for a very long time.
And productivity is lagging. That’s why the government keep banging on about skills training and supply-side reforms. In plain English, they mean that things aren’t as chaotic as they were, but real growth remains fragile.
The Headlines Worth Knowing
Trying to cut through the noise isn’t easy. Media channels carry their usual biases. Who do you listen to? Some say the budget was a disaster. Some say it’s encouraging and should help in the long term.
The government says that energy bills should begin to drop from 2026 onwards, and rail fares and prescription charges won’t budge for twelve months. Income tax, National Insurance, and VAT rates aren’t rising, but thresholds will stay frozen until 2031, which effectively amounts to a stealth tax increase.
New levies are hitting savings, dividends, and rental income. Meanwhile, retail, hospitality, and leisure businesses are getting permanently lower business rates from 2026. Infrastructure and R&D funding? They’re getting a serious boost.
What Scottish Firms Should Actually Do
Are you running a local shop, pub, or restaurant? Lower business rates from 2026 should help ease the pressure. At least a bit. Larger premises might see a slight uptick through higher multipliers. But most small firms will come out ahead.
Tax changes will hit owner-managed businesses the hardest. Because thresholds aren’t moving, more people will slide into higher tax brackets without earning a penny extra. Dividends, savings, and property income all face steeper rates. Employee Ownership Trust relief? That’s being slashed.
If you’re taking most of your income through dividends, you might want get yourself a good accountant (of course, you should anyway, give us a call!). A proper financial review could save you thousands and make a real difference to how your business operates. It’s not about dodging tax, it’s about structuring things sensibly.
Opportunities for Growth
If you are in a growing business, you actually have quite a bit to celebrate. Share option schemes are expanding to cover more scale-ups. Investment limits for Venture Capital Trusts and the Enterprise Investment Scheme are rising. This should make it easier to attract serious financial backing.
The R&D funding boost could be excellent for Scotland’s tech sector, engineering firms, manufacturers, and creative industries. Are you working on something genuinely innovative? Now could be your moment. Callan Accountancy are R&D tax specialists and can advise you on the best way to take advantage of R&D funding.
The Living Wage Question
From 2026, the National Living Wage will rise. Employers need to budget for this, and it will be costly for many businesses. But frozen rail fares and continued fuel duty cuts should help people with commuting costs and household energy support might keep high street spending steadier, which matters if you rely on footfall.
Electric Vehicle Changes
Here’s one for the diary: from 2028, electric vehicle drivers will pay mileage-based charges. Does your business run electric vans or cars? You need to start planning now. The upside? Investment in an improved charging network and extended grants should make EV operations smoother across Scotland.
Making Sense of It All
This Budget offers various reliefs, imposes new costs, and demands adaptation. Real opportunities exist for investment, innovation, and greener operations. But wage rises, frozen thresholds, and digital compliance changes will create pressure points.
Scottish businesses that plan carefully can turn these shifts to their advantage. It’s not a Budget that rewards standing still. Think ahead, though, and you might just come out ahead.
Callan Accountancy can offer the help your business needs to maximise efficiency and plan for the future. Our tools give you the information you need to make great decisions at your fingertips. Call us on 0141 204 0930 or contact us for a free consultation.
