What the Budget means for Northampton’s small business owners: Insights from N-Accounting

ExCo

To help break things down, Nishi Patel, Managing Director of Northampton-based accounting firm N-Accounting, has shared a clear and balanced summary of the key measures that will impact business owners most directly.

While several announcements introduce new costs or constraints, Nishi believes the Budget also presents opportunities for owners to refresh their long-term planning and strengthen their financial strategy ahead of the changes coming into force.

1. Pension Salary Sacrifice cap –coming April 2029

From April 2029, pension contributions made via salary sacrifice will be capped at £2,000 per year. Salary sacrifice has historically been one of the most tax-efficient tools for business owners, offering combined savings on income tax and national insurance.

“Although this cap limits how quickly business owners can top up their pensions later in life, it also encourages earlier, more consistent planning,” says Nishi. “There’s time to adapt, and there may be cases where ISAs or other investment vehicles play a greater role going forward.”

2. Dividend Tax Rates increasing – From April 2026

Dividend tax at the basic rate will rise to 10.75% from April 2026, continuing the gradual increases seen in recent years.

Nishi sees this as a prompt for business owners to review how they take income from their companies:

“With frozen thresholds and a higher rate kicking in from 2026, many owners will benefit from revisiting their salary–dividend split. There are still efficient ways to extract income—you just need the right planning.”

3. Capital Allowances reduced to 14% – From April 2026

The Budget confirmed that the main rate of capital allowances will fall from 18% to 14% from April 2026.

Capital allowances directly affect tax relief on equipment, assets, and investment in growth, so this adjustment may influence when and how businesses decide to invest.

“While the reduction means slightly slower tax relief on asset purchases, business owners now have a clear runway to plan ahead,” Nishi explains. “Anyone considering significant investment may want to factor this timeline into their planning.”

4. New Electric Vehicle Mileage Levy – From April 2028

A 3p-per-mile levy on electric vehicle mileage claims will come into effect in April 2028.

Electric vehicles remain highly tax-efficient overall, but Nishi says this new levy is worth building into future cost calculations.

“It’s not a dramatic increase, but it does mean EV costs need to be reviewed more closely—especially for businesses covering high mileage.”

5. Minimum Wage increases above inflation – From April 2026

The minimum wage will rise from April 2026, with adult rates increasing by around 4.5% and under-21 rates rising by roughly 10%.

These increases will raise staffing costs for many small businesses.

“Wage rises are an important part of supporting workers, but they also require employers to plan ahead,” Nishi says. “The positive news is that these changes don’t take effect until 2026, giving businesses plenty of time to adjust their budgets.”

6. Free apprenticeship training – Also from April 2026

From April 2026, apprenticeship training will become fully funded.

Nishi sees this as a helpful support measure, particularly for businesses who want to invest in young talent, but notes that it won’t fully offset the cost of rising wages.

“Free training is a welcome step, but in most cases it saves around £1,500 a year—which doesn’t fully balance the 10% wage increase for younger workers,” he explains. “Still, it’s a positive incentive for businesses to build skills internally.”

A Budget of change, but also opportunity

Nishi summarises the Budget as a series of changes that introduce new considerations for business owners, but none that require immediate action.

“The most important thing is that all of these measures come in over the next few years,” he says. “That gives business owners ample time to plan, model different scenarios, and make decisions based on what benefits them the most.”

At N-Accounting, Nishi and his team are already helping clients prepare for the upcoming changes—reviewing pension strategies, investment plans, salary structures, and cashflow projections well in advance of the new rules taking effect.

Strengthening Northamptonshire’s business community

Despite the adjustments ahead, Nishi remains optimistic about the resilience and adaptability of local businesses.

“Northamptonshire has a strong entrepreneurial spirit,” he says. “Budgets shift, regulations evolve, but with the right support and long-term planning, our business community continues to grow and thrive. This Budget is simply another opportunity to reassess and move forward confidently.”