After weeks of speculation, UK Chancellor Rachel Reeves set out her Autumn Statement yesterday. Whilst there were no major tax increases, the thresholds for National Insurance (and Income Tax outside of Scotland) will be frozen for another year, dragging more people into higher tax bands. For business, there was a focus on supporting scale-ups, and changes to rates relief in England – we will await the Scottish Government budget in January to see how these changes are reflected north of the border.

OBR forecast

• GDP expectations for this year upgraded to 1.5% – however growth isn’t expected to rise above 1.5% at any point in the forecast to 2030
• Expectations for productivity growth have been reduced to 1%, meaning £16bn less in tax receipts by 2030
• Inflation will be 0.4% lower next year than previously predicted (down to 2.5% for 2026), and is expected to return to the target of 2% by 2027

Business, infrastructure, and the economy

• A package of tax changes have been announced, to support scaling companies to attract investment and talent, including:
  • Increasing the company eligibility limits for the Enterprise Management Incentives scheme to allow scale-ups to join start-ups in offering tax-advantaged shares to the talent they need to grow
  • Increasing the Venture Capital Trust and Enterprise Investment Scheme limits to keep investors involved for longer
  • The British Business Bank will invest at least £5 billion in growth-stage funds and scale-up companies
  • A three-year exemption from Stamp Duty Reserve Tax for companies listing in the UK
  • Launching a call for evidence on how the tax system can better support entrepreneurs
• Annual government investment in R&D will grow to £22.6 billion by 2029-30
• A new 40% first year allowance for business investment will be introduced
• (England only) training for apprenticeships for under-25 will be free for SMEs
• A series of reforms will be made to various high-skill visas, to streamline access to talent
• Maintaining previously announced investment levels in infrastructure etc.
• Freezing rail fares for trains in England

Taxation

• The freeze on National Insurance thresholds (and income tax outside Scotland) will be extended to 2031
• The basic and higher rates of tax on savings and dividend income will be increased by 2 percentage points in April 2026. This will also apply to property income outside of Scotland
• The current 100% relief on capital gains tax from sales of businesses to Employee Ownership Trusts will be reduced to 50%
• From April 2026, the Capital Gains Tax rate for Business Asset Disposal Relief and Investors’ Relief will increase to match the main lower rate at 18%
• (England only) permanently lower business rates will be introduced for certain retail, hospitality, and leisure businesses, with higher rates for properties with a rateable value over £500k
• (England only) an additional two years of Small Business Rates Relief will be provided for businesses expanding into a second property
• From 2028 a surcharge on council tax outside of England will apply for properties worth over £2million
• Electric Vehicle Excise Duty will be introduced from 2028, paid for per mile
• Alcohol duties will be uprated in line with inflation
• The 5p cut in fuel duty will be extended until September 2026
• Various duties on household energy bill will be removed, leading to a £150 reduction in the average household bill from April 2026
• The crackdown on fraud and unpaid tax will continue, with new powers for HMRC

Pay, savings, and benefits

• Salary sacrifice schemes for pensions will be subject to a £2,000 cap from 2029, with contributions above that taxed as normal
• The two child limit will be removed from April, lifting 450,000 children out of poverty – this is something the Scottish Government had previously committed to achieving, so will create some fiscal headroom for them
• Reforming the ISA system and regulation around advice that banks can give
• Increasing the basic and new State Pension by 4.8% in line with the triple lock
• Increasing the legal national minimum and living wages – to £12.71 an hour for workers aged 21 and over

Devolved funding

• £820m for Scottish Government through the Barnett formula
• Targeted investment in industrial strategy sectors across UK
• Funding for key areas in Scotland, including over £14m for low carbon tech in Grangemouth, £20m for Inverclyde, and £20m for Kirkcaldy town centre and seafront

For more analysis and insight, keep an eye Chamber newsletters and wider Chamber comms over the coming weeks. Get in touch with our policy team at policy@edinburghchamber.co.uk with any thoughts or feedback on how the budget might affect your business.