ICAEW members have expressed some relief at the lack of surprises in the Budget, though many were largely muted when it comes to the measures actually announced in the Budget, summed up by a member working at a South West brewery: “It could have been a lot worse. Nothing too aggressive to derail consumer confidence further, but nothing very positive to step it back up.”

More costs for business

A number of members working in industry gave their views through focus groups held in the immediate aftermath of the Chancellor’s Budget speech.

Some members flagged the increases in the National Minimum Wage (NMW) as a “nasty pill to swallow”. “They seem to have made life for small businesses even harder with the National Minimum Wage, salary sacrifice, etcetera,” said one member with a manufacturing portfolio in the North East.

“NMW is a ‘disaster area,” said another member in manufacturing in the East of England. “It’s pricing young people out of the job market.”

The changes to the NICs treatment of salary sacrifice pension schemes was seen as another cost on employment. One practice member specialising in retail and based in London said the changes will make it harder for employers to attract talent.

Another agreed: “Applying National Insurance to salary-sacrificed pension contributions introduces yet another cost for employers, despite recent NI increases. It could also discourage employees from saving for their retirement.”.

This was echoed by members in industry. One in the South West technology sector said: “Increased taxes on pension contributions will negatively impact both the company and the individual.” They confirmed that they would be responding to the Call for Evidence on Tax Support for Entrepreneurs, but was “disappointed” not to see any movement on R&D tax claims.

The delayed introduction of many of the measures announced was also remarked upon by several members, with one retail member in London saying there were “lots of tax rises but not coming for ages, the government will sit there and wait for growth even though there were no measures to promote growth”.

Business rates benefits

Some members cautiously welcomed the changes to business rates outlined in the Budget, including the lower multipliers for eligible retail, hospitality and leisure properties and the three-year transitional relief scheme.

One member in hospitality said that while the impact was not fully clear, “we expect to be slightly better off”. A retail member expressed similar views: “Business rates will be net beneficial as we have a wide portfolio of property.”

But these benefits were slight, as some members pointed out – not enough to massively move the dial for businesses. Members made it clear that they would like to see broader reform of the business rates system.

“It’s not exactly a reform of business rates,” said a member in practice based in the North West. “Everything in the Budget was just tweaks, but at least we know where we stand.”

Increases in personal taxes

Members were largely negative about the potential impacts of frozen income tax thresholds, and the two percentage point increases in dividend tax and savings tax. “Higher taxes take so much money out of the economy and kill people’s desire to buy things,” said a manufacturing-based member in the South West.

The latter tax increases will mean that more people – already squeezed on disposable income – will need to think twice about investing cash or in stocks and shares, added one member in practice.

“More people might sell shares prior to April 2026, before the new dividends tax rates come into effect,” they said. “Possibly resulting in unnecessary stock markets fluctuations – impacting the economy, future interest rates, etcetera.

“With higher savings tax rate being charged and if interest rates increase or stay stagnant why would people invest? How does this increase overall growth?”

The increase in the dividend tax rate is a real concern, another practice member added, as it effectively makes incorporation less attractive, and puts pressure on small businesses that would usually go limited for individual protection.

The said: “It’s a bit of a double bind: if they stay incorporated, they face higher costs, and if they de-register, they may face issues like Making Tax Digital requirements. Overall, it feels like an additional burden on small businesses, rather than support.”

One manufacturing member said that the threshold freezes could put a dampener on productivity, which is in grave need of a boost. “Thresholds constrain growth as it reduces worker ambition; people don’t want to hit the next tax bracket.”

“Instead of freezing allowances, it would have been far more honest to raise the headline rate,” added a member in the East of England.

A missed opportunity

Overall, while members kept reiterating that it could have been worse, there was the sense of a missed trick; that the Chancellor could have gone bold but instead chose to tinker around the edges without moving things in any positive direction.

“It feels like lots of tinkering again when there was the political appetite for some real change,” said one member. “I feel it would have been better to rip the plaster off and make some real changes, rather than constantly make small changes which just make everyone nervous and therefore don’t help growth.”

“They talked about growth a lot when they came to power,” added a member in the Midlands. “Yet there was nothing for growth."