Autumn Budget 2025 — what international businesses need to know about UK tax changes

The Autumn Budget 2025 signals a shift in the fiscal landscape that international businesses can’t afford to ignore. While the Government reaffirmed its commitment to attracting global investment, the measures announced introduce new cost pressures and compliance considerations for overseas companies operating in or planning to enter the UK market.

Here, English tax expert Euri Yoon and Tax Director Andrew Horsfield from our corporate tax advisory team break down what the Budget means for international employers, investors and multinational groups.

Employment costs are rising

One of the most immediate impacts for international employers is the increase in labour costs. The National Living Wage uplift, combined with the freeze on income tax thresholds until 2030/31, means that wage inflation will push employees into higher tax bands more quickly. This ‘fiscal drag’ effect will require businesses to review salary structures to maintain competitiveness and net pay for staff.

Additionally, the cap on pension salary-sacrifice National Insurance (NI) relief will increase employer NI liabilities, particularly for firms offering globally aligned executive benefits. For companies relocating talent to the UK, these changes may necessitate a rethink of remuneration packages to remain attractive in a tightening labour market.

Executive mobility & personal tax

International businesses often deploy senior leaders to the UK for oversight or expansion. The Budget introduces a 2% rise in tax rates on dividend, savings and property income, alongside a new £2,000 cap on pension salary-sacrifice relief. These measures will increase personal tax burdens for expatriate executives and may require adjustments to long-term incentive plans and housing allowances — especially given the new council tax surcharge on properties valued above £2m from April 2028.

Corporate tax 

The headline corporation tax rate remains at 25%, keeping the UK competitive among G7 nations. However, businesses should note changes to capital allowances: from April 2026, the writing-down allowance for plant and machinery will fall from 18% to 14%, though a new 40% first-year allowance will apply from January 2026. Full expensing continues for qualifying expenditure, offering opportunities for capital-intensive businesses to optimise investment planning.

Incentives for investment & listings

In a bid to bolster the UK’s attractiveness as a listing venue, the Government announced a three-year exemption from Stamp Duty Reserve Tax (SDRT) for companies newly listed on UK-regulated markets. This measure, effective from 27 November 2025, could make the UK more appealing as a holding company jurisdiction for groups considering public markets. Additionally, enhancements to the Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) regimes aim to support scale-ups and knowledge-intensive businesses, though the reduction in VCT income tax relief to 20% may temper investor appetite.

Anti-avoidance & international tax alignment

The Budget continues the trend toward tightening anti-avoidance rules — including measures affecting share exchanges and reconstructions — and signals further alignment of UK transfer pricing and permanent establishment rules with international standards. Multinationals should anticipate additional reporting obligations on cross-border related-party transactions, with consultations expected in 2026.

Sector-specific impacts

Technology

The UK remains committed to fostering innovation, with continued support for R&D tax relief and knowledge-intensive investment incentives. However, the reduction in VCT income tax relief and tighter anti-avoidance rules may affect funding strategies for tech scale-ups. Overseas tech firms should review eligibility for enhanced R&D credits and consider structuring UK operations to maximise relief while maintaining compliance.

Manufacturing

Manufacturers benefit from full expensing and the new 40% first-year allowance that can significantly reduce the tax cost of capital investment in plant and machinery. However, the lower writing-down allowance from April 2026 will impact long-term depreciation planning. Overseas manufacturers should accelerate investment decisions to capture maximum allowances before the rate change.

Property

The property sector faces increased pressure from higher council tax on high-value properties and the 2% rise in tax on property income that will affect returns for overseas investors. While corporate tax rates remain stable, the Budget signals a continued focus on anti-avoidance in property structuring, making transparent and compliant arrangements essential for inbound investors.

What does this mean for overseas businesses?

While the UK remains a strategic hub for international expansion, the cost of doing business is rising and tax compliance is becoming more complex. 

Overseas companies should:

• Review employment and relocation policies to manage higher labour and mobility costs.
• Reassess executive remuneration structures in light of personal tax changes.
• Plan capital investment to take advantage of new allowances and full expensing.
• Consider listing strategies to benefit from SDRT relief and investor incentives.
• Stay ahead of compliance changes, particularly around transfer pricing and anti-avoidance.

Talk to us

If you’re an overseas business operating in the UK or considering entry, now’s the time to revisit your tax strategy. 

Our corporate tax advisory team can help you to navigate these changes and identify opportunities to optimise your position, including supporting with:

• Tax efficient structuring for inbound secondees, senior leaders and globally mobile talent.
• UK market entry and structuring
• Corporate reorganisations and cross-border transactions
• Ongoing strategic tax advice to keep your UK operations competitive and compliant in a changing fiscal environment.

Talk to us by calling 0333 004 4488, emailing hello@brabners.com or completing our contact form below.