The danger of uncertainty – How the economy and Autumn Budget may be slowing investment

With UK growth slowing to just 0.3 per cent in Q2, business confidence remains fragile.

Momentum has waned after a brief surge in exports ahead of new tariffs earlier this year, while weaker consumer confidence and persistently high household savings are adding to the uncertainty.

The forthcoming Autumn Budget is amplifying these concerns, with expectations that the Chancellor will revisit a range of tax-raising measures to address a potential £50 billion shortfall.

For businesses, this makes planning investment, recruitment, and payroll increasingly complex.

What could be on the table?

Recent reports indicate the Autumn Budget could introduce several tax changes:

• Inheritance Tax (IHT) may be reformed, with reliefs on gifts scrapped and adjustments to the residence nil-rate band.
• Capital Gains Tax (CGT) rates could be aligned with Income Tax, potentially extending to high-value homes in a “mansion tax” style levy.
• The VAT threshold might be lowered to £30,000, bringing more small businesses into scope.
• Property taxes could be overhauled, with Stamp Duty replaced by a levy on higher-value homes.
• Pensions may face limits on tax-free lump sums.

While all of these proposals are speculative, it is this uncertainty itself that can hold back investment and strategic decision-making.

How you can respond to uncertainty

Recruitment intentions are already being affected, with many businesses favouring temporary or flexible contracts rather than committing to permanent staff.

Consumers are saving more and spending less in anticipation of potential tax increases, hitting revenues in consumer-facing sectors.

Major investment decisions are frequently delayed until after the Budget, as businesses wait for clarity.

Even amid uncertainty, steps can be taken to mitigate risk:

• Plan for different tax scenarios, including higher employer costs or property and CGT changes.
• Review payroll and benefits to stay compliant and competitive.
• Streamline processes with technology to boost efficiency.
• Utilise short-term hiring options, while planning for long-term workforce needs.

Uncertainty does not have to stall business growth. Speak to our advisers today for tailored strategies and support to keep your business moving forward, no matter what the Autumn Budget brings.