Autumn Budget 2025: What NFRC Businesses Need to Know

Below is a summary of the key announcements most relevant to NFRC Members, starting with those likely to have the most immediate impact. 

Minimum and Apprentice Wage Increases (From April 2026) 

Labour costs will rise again next April: 

• National Living Wage (21+): up 4.1% to £12.71 per hour 
• 18–20 year olds: up 8.5% to £10.85 per hour 
• 16–17 year olds and apprentices: up 6% to £8.00 per hour 

These increases come on top of recent wage rises and existing National Insurance pressures (come April, minimum wage will have risen 43% in the past five years). For many NFRC Members this will increase payroll costs, further squeeze margins, and raise recruitment risks. The narrowing gap between new starters and experienced workers may also create retention challenges. 

NFRC’s latest State of the Industry report shows that already: 

• 76% of Members cite employment costs as a challenge 
• 52% report recruitment difficulties 
• 65% report skilled labour shortages were impacting the amount of work they could take on  

Free Apprenticeship Training for Under-25s at SMEs 

Apprenticeship training for under-25s will become fully free for SMEs, alongside an £820m Youth Guarantee programme designed to provide paid placements for those who have been on universal credit for 18 months.  

NFRC estimates the free apprenticeships will save around £550 per roofing apprentice for SMEs. 

While this reduces training costs, the benefit may be offset by rising wages. 

The change is funded by reforms affecting levy-paying large employers, including the removal of the 10% levy top-up and a halving of the time available to spend levy funds. This could affect larger NFRC firms’ hiring behaviour, although the full impact is not yet clear. 

Inheritance Tax – Business Property Relief 

The new £1 million 100% relief allowance will now be transferable between spouses and civil partners, giving a combined £2 million allowance on second death, if unused initially. 

Unused allowance will remain transferable even if the first death occurs before the rules take effect on 6 April 2026. The allowance will be frozen until April 2031 and index-linked thereafter, alongside the freezing of the nil-rate and residence nil-rate bands. 

This change will reduce the need for complex restructuring for many family-owned businesses. 

Capital Allowances 

The main rate of writing down allowances - which allows companies to deduct a percentage of the value of certain items from their profits each year - will decrease from 18% to 14% from April 2026, with a new first‐year allowance of 40% for main‐rate assets from 1 January 2026. 

Landfill Tax Plans Halted 

Plans to merge the two landfill tax rates have been scrapped following industry lobbying. The Government will: 

• Retain the lower rate for inert materials 
• Keep the quarry backfilling exemption 
• Prevent the gap between the two rates from widening 

However, the lower rate will still essentially double to £8.65 per tonne in 2026/27 

This still avoids a significant cost increase for construction waste and supports housing and infrastructure delivery. 

Fuel Duty Frozen Until September 2026 

Fuel duty will remain frozen for a further five months. The temporary 5p cut will then supposedly be reversed in stages: 

• 1p on 1 September 2026 
• 2p on 1 December 2026 
• 2p on 1 March 2027 

Fuel duty will then rise in line with RPI from April 2027. While the extension offers short-term relief, transport and operational costs are expected to rise thereafter. 

Alongside this, a new mileage‐based charge on battery electric and plug‐in hybrid vehicles will be introduced from April 2028. 

Electricity Prices Cut for Some Manufacturers 

Electricity prices will be reduced for eligible manufacturers through the proposed British Industrial Competitiveness Scheme (BICS). A consultation is under way on eligibility and design. 

The scheme will exempt qualifying businesses from indirect costs related to: 

• Renewables Obligation (RO) 
• Feed-in Tariffs (FIT) 
• Capacity Market (CM) 

If you would like to contribute to NFRC’s response, please contact [email protected]. 

Business Rates 

From 1 April 2026, business rates will reflect the 2026 revaluation. Multipliers will fall: 

• Small business multiplier: from 49.9p to 43.2p 
• Standard multiplier: from 55.5p to 48p 

A new £3.2bn Transitional Relief scheme will cap annual increases as follows: 

Rateable value up to £20,000 (£28,000 in London): 

• 5% in 2026/27 
• 10% in 2027/28 (+ inflation) 
• 25% in 2028/29 (+ inflation) 

£20,001 to £100,000 (£28,001–£100,000 in London): 

• 15% in 2026/27 
• 25% in 2027/28 (+ inflation) 
• 40% in 2028/29 (+ inflation) 

Over £100,000: 

• 30% in 2026/27 
• 25% in 2027/28 (+ inflation) 
• 25% in 2028/29 (+ inflation) 

Tax Threshold Freezes 

Income tax and National Insurance thresholds will remain frozen until 2030–31, pulling more workers into higher tax bands over time. 

In addition: 

• Dividend, property and savings tax rates will rise by 2 percentage points 
• Salary-sacrificed pension contributions over £2,000 will attract NICs from 2029 
• The overall tax burden is forecast to reach 38% of GDP by 2030 

Warm Homes Plan 

The Government announced £1.5 billion in capital investment for the Warm Homes Plan, in addition to the £13.2 billion allocated at Spending Review 2025. We are still waiting on actual detail from the plan for how this money will be spent. 

Devolved Investment and Infrastructure 

Key announcements include: 

• £13bn for seven mayoral regions for skills, business support and infrastructure (2026–30) 
• £902m Local Growth Fund across mayoral authorities including Greater Manchester, West Midlands, Liverpool City Region and others 
• Growth Mission Fund allocations including: 
• £20m for a sports quarter in Peterborough 
• £20m for Inchgreen dry docks, Inverclyde 
• £16m for a STEM centre in Darlington 
• Delivery of 250 new Neighbourhood Health Centres, with 120 by 2030, through public-private partnership 
• An additional £370m for the Northern Ireland Executive, £505m for the Welsh Government and £820m for the Scottish Government over the Spending Review period through the Barnett formula, aiming to provide funding to the devolved nations in proportion to their population and the extent to which services are devolved.  
• Wales will host two AI growth zones, creating more than 8000 jobs, supported by a £10m investment in the semiconductors critical for that industry  
• In Scotland, the Government committed £14m for low carbon technologies in Grangemouth, £20m to renew infrastructure in Inverclyde and £20m to redevelop Kirkcaldy town centre and seafront. 

Planning Capacity 

£48m has been confirmed to fund 350 additional planners through expanded graduate routes and a new Planning Careers Hub. While helpful, this will only partially address severe capacity constraints across England’s 337 local planning authorities. 

High-Value Property Tax 

From 2028, a new annual tax will apply to high-value homes: 

• £2,500 for properties over £2m 
• £7,500 for properties over £5m 

This is unlikely to affect most Members directly but may impact the high-end residential market. 

Fraud in Construction  

HMRC powers to tackle fraud within the Construction Industry Scheme (CIS) will be strengthened. The Government also plans regulatory changes to simplify and improve the scheme’s administration. These measures will be legislated for in the Finance Bill 2025/26 and take effect from 6 April 2026. 

New Taskforce to Tackle Phoenix Firms

Under a raft of measures to tackle fraud announced in the Autumn Budget, chancellor Rachel Reeves said she will give the Insolvency Service an extra £25m over the next five years.

The funding will be used to create a new Abusive Phoenixism Taskforce staffed by 50 people investigating suspicious company insolvencies.

HMRC’s latest data, covering the 2022/23 tax year, estimates it lost £836m to phoenixing.

Economic Outlook 

The Office for Budget Responsibility forecasts: 

• GDP growth averaging 1.5% to 2030 
• Productivity growth downgraded to 1.0% 
• Inflation above target until 2027 

New housing supply is forecast to fall to 215,000 in 2026/27 before rising to 305,000 by 2029/30 following planning reforms. Sluggish productivity and near-term housing weakness remain concerns for construction demand. 

Overall Impact  

This Budget increases cost pressures for employers, particularly through wages and taxation, while offering limited direct relief. The halt to landfill tax changes and free apprenticeship training for SMEs are welcome, but they do not offset rising employment costs or the other pressures that have been piling on the sector. 

With tax thresholds frozen, productivity downgraded and limited short-term housing stimulus, pressure on roofing and cladding businesses is set to continue. Longer-term infrastructure and regional funding may offer opportunities, but benefits will take time to materialise. 

NFRC will continue to assess the implications and represent Members’ interests as further detail emerges. We will also consult Members on the impact of the Budget. If you would like to share your views, please contact [email protected].