Budget 2025 Business Breakfast: From "Half Measures" to Hidden Detail – A Deep Dive
On Friday, 28th November, Harrogate District Chamber of Commerce welcomed a strong turnout of business owners to the Cedar Court Hotel for a Post-Budget Breakfast.
Working alongside Tom Gordon MP and co-organisers Libertas Professional Services, the morning was dedicated to cutting through the headlines to understand the real-world impact of the Autumn Budget on the Harrogate district. While the Chancellor’s statement may have appeared lighter than previous years, our expert panel revealed a series of technical shifts and frozen thresholds that will cumulatively impact local SMEs and families.
Here is a summary of the key insights delivered by our speakers: Tom Gordon MP, Ian Howard, Daniel Hill, and Lily Bell.
The Parliamentary Perspective: SME Pressures and Regional Power
Tom Gordon, Liberal Democrat MP for Harrogate and Knaresborough, opened the discussion with some fascinating thoughts on the broader implications of the Budget. He covered a wide range of topics crucial to our local economy, specifically:
SME Pressures: Exploring the specific challenges facing small and medium-sized enterprises in the current climate.
Demographic Impact: Discussing how the Budget affects the younger generation and "those in the middle."
Regional Power: Providing insight into the evolving role of regional mayors and what this means for North Yorkshire.
The Strategic View: Resilience in a Climate of "Half Measures"
Ian Howard (Libertas Professional Services LLP) then addressed the broader economic landscape. He argued that policy decisions are frequently overlooking the realities of the small and mid-sized firms that form the backbone of Harrogate’s economy. With persistent challenges such as low growth, inflation, and a tight labour market, Ian’s message was clear: businesses cannot rely on policy alone.
Ian urged attendees to look beyond tax rates and focus on strategy. He called for stronger forecasting, scenario planning, and robust strategies to navigate uncertainty. "Budgets aren't just about tax changes," he noted. "They shape the bigger picture: strategy, investment, and workforce planning."
Taxation: The "2% Squeeze" and Business Reliefs
Daniel Hill (PD Tax Consultants) provided clarity on the shifts in corporate and personal taxation. He highlighted that while Income Tax and Capital Gains Tax rates remain unchanged, the devil is in the detail:
Fiscal Drag: Personal tax thresholds are now frozen until 2031, pulling more people into higher bands as wages rise.
Investment Income: A new 2% tax increase applies to property income, interest, and dividends (dates vary between 2026 and 2027), effectively increasing the burden on landlords and business owners paid via dividends.
Business Reliefs: Significant changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) mean 100% relief is restricted to the first £1m, falling to 50% thereafter.
Corporate Updates: On a positive note, EMI scheme limits for employee options will double, though Capital Gains Tax relief on disposals to Employee Ownership Trusts is being cut to 50%.
Financial Planning: A "Watch This Space" Warning
Lily Bell FPFS (Rise Wealth) focused on the personal implications of the Budget. She noted that while modest compared to last year, specific measures will impact those with investment income or significant assets.
The "Mansion Tax": A new levy on properties worth over £2m (£2,500/year) and £5m (£7,500/year) could affect asset-rich residents in the district.
Pension Shake-Up: Lily flagged a major proposed change for 2029: National Insurance contributions may be charged on salary sacrifice pension contributions over £2,000. She advised this is a critical "watch this space" item for future workforce planning.
Inheritance Tax: With thresholds frozen and pensions brought into the scope of IHT, Lily emphasized that proactive estate planning is now more important than ever.
Conclusion
The morning demonstrated the collaborative spirit of the Harrogate business community. While the Budget presents challenges - from the "2% squeeze" on investment income to the continued pressure on SMEs - the consensus was that Harrogate businesses are resilient.
We extend our gratitude to Tom Gordon MP for providing the parliamentary perspective, to our expert speakers, and to Cedar Court Hotels Yorkshire for their impeccable hosting.
