Small retailers don’t just need more relief from the Budget – they also need more clarity and confidence, says Nick Fahy, CEO of Cynergy Bank, which lends to SMEs across the UK. 

“The Autumn Budget comes at a time when small businesses are already managing high costs, stubborn inflation and real uncertainty around future tax policy,” Fahy said.

“Businesses need a Budget that backs them – not one that adds further pressure. Business-rates reform is essential, and we would welcome a more progressive system that lightens the load on smaller premises. We also want to see the Government maintain relief for retail, hospitality and leisure properties, rather than scale it back just as confidence is returning.“

He also called for more measures that offer smaller brands the stability to invest, pointing to expanded capital allowances or full expensing to allow them to modernise.

“This Budget is an opportunity to send a clear signal that the UK backs entrepreneurs. If we get it right, SMEs will drive growth, create jobs and revive local economies.”

It was expected that the Chancellor would follow the lead of the U.S. and EU and announce that the de minimis rule had been scrapped. However, Rachel Reeves has confirmed the controversial rule – which exempts parcels worth under £135 from import duties – will remain in place until March 2029, despite pressure from British retailers.

The exemption has been heavily criticised for giving foreign ecommerce retailers, such as Shein and Temu, an unfair advantage. Brands including Associated British Foods, Monsoon, Superdry and NEXT, along with the British Retail Consortium (BRC), argue the rule distorts competition and undermines high streets.

According to HM Revenue and Customs data released to Sky News, the total declared trade value of de minimis imports into the UK in the last fiscal year (2024-25) was £5.9billion.

The Chancellor said the change – expected to raise £500million a year once in place – will help level the playing field for British retailers. According to The Times, she has opted for a phased approach to avoid overwhelming customs infrastructures.

The government will launch a consultation on new customs arrangements in the coming weeks, with detailed proposals expected next year.

Commenting on the loophole, Helen Dickinson, Chief Executive of the BRC, said: “It cannot come soon enough. The volume of potentially non-compliant goods entering the UK is growing exponentially. We encourage government to ensure this new policy is implemented as quickly as possible.”

New analysis from pro-growth group, High Streets UK, has revealed that the “super tax” business rates higher multiplier – set to be decided on in today’s Budget – will cause more store closures, job losses and higher inflation that previously expected.

Properties set to be affected by the new multiplier are those with a rateable value of over £500,000. It says such properties are 5.1x more likely to be in a flagship High Street than anywhere else – despite Government claims the proposals are aimed at online giants.

Business concerns around rising operational costs have worsened since High Streets UK conducted its first round of research in March. Since then, the number of businesses saying they are considering job cuts, closures and price increases has increased.

Its latest survey of 50 retail, hospitality and leisure businesses found that the introduction of the maximum proposed higher multiplier would put almost 6,000 jobs at risk, force 238 commercial units to close and increase prices by +3%. Dee Corsi, Chair of High Streets UK, said:

“Far from targeting online giants, the “super tax” is 5 times more likely to hit flagship anchor stores – the same businesses which drive footfall and spend for their smaller neighbours. It is an ineffectual way to drive growth, and it is working people who will suffer most.”

The impact of today’s Budget, regardless of the outcome, has already been baked into consumer confidence – and this will have a long-tail effect on both spending and demand, according to loyalty technology provider, Antavo’s CEO & Co-Founder, Attila Kecsmár:

“Retailers are bracing for another round of uncertainty. Shoppers have become more deliberate with every pound they spend, and that’s unlikely to change no matter what the Chancellor announces.”

With shaky shopper confidence set to continue in the long-term, he suggests retailers looking to ‘out-discount’ each other wouldn’t become sustainable, warning against a race to the bottom. “When customers are under pressure, they want brands that make life easier [and] help stretch their budgets,” Kecsmár explained. He added:

“The retailers getting this right aren’t trying to out-discount each other; they’re building trust by showing they understand customers’ reality. Whatever shape the Budget takes, that focus on empathy and long-term value will matter far more than any short-term incentive.”

The National Living Wage is set to rise from £12.21 to £12.71 an hour from April for workers over the age of 21, which will increase annual earnings of ~2.4million by £900 each year. Meanwhile, the National Minimum Wage for those aged between 18-20 will also increase by +8.5% to £10.85 an hour, narrowing the gap with older workers.

Rachel Reeves said the measures, set to be outlined in the Autumn Statement this afternoon, recognise that “the cost of living is still the number one issue for working people” and “the economy isn’t working well enough for those on the lowest incomes.”

The Government also said the measures “strike the right balance” between the needs of workers, affordability for businesses and opportunities for employment.

Last year, wage and tax hike pressures following the October Budget prompted over half (53%) of retailers to freeze recruitment and a further 60% to consider making redundancies due to rising costs, according to WorkJam research.

While it was expected that the UK would follow other countries, including the U.S., in scrapping the de minimis threshold, the delay to 2029 could leave Britain lagging behind its trade counterparts, says ZigZag’s CEO, Al Gerrie:

“It is no surprise that the UK is following suit by dropping the de minimis [threshold], but it is also no surprise that this Government is slow to react and the UK will end up lagging behind its trade counterparts by leaving it until 2029… Labour have just kicked the can down the road.”

Pointing to the speed at which the U.S. implemented the changes to de minimis rules, which took just over a month, he suggests that while the transition will be “a big relief” to retailers managing large volumes of overseas shipments, “the timing is probably too far away.”

He added that the EU will begin its own transition in 2026, which is expected to take until 2028 to complete. Gerrie suggests “Britain needs a fairer trading environment with transition dates in line with other major markets, otherwise UK retailers will suffer.”

“What’s important now is that the Government doesn’t impede UK businesses with red tape. If the objective is to support growth, the government needs to provide retailers with meaningful support through the transition period. Replacing the current system with a cumbersome, opaque customs process would be entirely counter-productive.”

Changes to income tax thresholds could deliver a “blow” to the UK retail sector, Nikhita Hyett, EMEA GM at Signifyd warns, dampening demand and fundamentally changing consumers shopping behaviours.

“Consumers grow more selective and price-sensitive, with confidence fragile after a year of persistent cost-of-living pressures. Rather than simply dampening demand, today’s news will accelerate a shift in how shoppers behave.”

She suggests that, in response, consumers will become “more agentic-inclined” – researching more thoroughly, comparing more rigorously and using digital tools, including AI, to secure the best possible value. And this will require retailers to evolve their operations.

“This Budget will shape spending power as much as it will serve as a barometer for the health of the UK economy. But unlike those before it, drastic policy changes will mean potential pivots for consumers and retailers alike.” 

Cost pressures from the Autumn Statement, risk creating a more challenging security landscape for retailers, making protecting staff and colleagues, as well as preventing theft, even harder for UK businesses, according to Matt Dawes, Head of Enterprise at HALOS:

“Against a backdrop of continued cost pressures highlighted in the Autumn Statement, retailers are being asked to do more with less – and that makes protecting people and stock even harder. As we head into the festive period and footfall increases, those pressures are felt more sharply on the shop floor.”

He added that UK retailers will continue to face a “tougher security landscape” as theft and abuse of frontline teams continue to rise: “In this environment, the focus has to be on practical measures that help prevent incidents and support teams when they occur.”

Despite the Autumn Budget delivering “some positives” it doesn’t go far enough in delivering the support many in the sector hoped for, says L.E.K. Consulting’s Partner, Jan Schneiderbanger.

Reacting to the new banded business rates system, he said that, while the move would “bring greater certainty and, over time, some relief for smaller retailers,” it risked negatively impacting larger format stores:

“Higher multipliers on higher value properties will add further cost for big supermarket formats, distribution centres and prime central London locations, where bills are already substantial.”

Noting that last year’s increases in employer NICs and the NLW added millions to large retailers’ cost bases, he said further wage rises could leave businesses in “cost management mode.”

“Another sizeable increase in the National Living Wage will drive a further rise in labour costs on top of last year’s big step-up, leaving many retailers still firmly in cost-management mode rather than able to invest for growth.”

Retailers are facing a major new cost challenge following the confirmation of a business rates surtax on large commercial properties from April 2026. Early estimates suggest the policy will cost retailers more than £400million a year.

OneStream Software says the measure will put further pressure on CFOs to model, forecast and respond to the policy change. “Agility is the only way to stay ahead of fiscal change,” said Matt Rodgers, EVP, EMEA at OneStream Software, adding:

“When new taxes or rate adjustments arrive, CFOs with unified, real-time systems can model the impact and act before those changes hit the bottom line. Those that can re-forecast within hours of a policy change will shape strategy, not just react to it.”

OneStream’s Finance 2035 research from 2,000 business leaders and investors shows 78% of CFOs see cost volatility and policy shifts as a top forecasting challenge, while 77% say unified, real-time data is now the biggest driver of resilience.

As announced ahead of the Budget, the Chancellor has accepted recommendations from the Low Pay Commission for low-income workers to be “properly rewarded” for their work. 

However, Daniel Todaro, CEO at shopper marketing agency, Gekko Group, says the move will be felt at the checkout and could drive further inflationary pressure:

“The boost in the NLW will improve the quality of life for the UK’s lowest earners, but consumers may not feel the benefit for long. Businesses will have no option but to pass the increased wage bill on to consumers, which will only increase inflation further.”

While the increase will impact all businesses with employees, it will be most keenly felt by those with larger workforces, who are also more likely to be impacted by the higher business rates multiplier.

“With retail insolvencies increasing in 2025, it was vital that the Budget included measures to support the sector. Business rates reform – particularly permanent relief for retail properties – promises much needed stability for smaller businesses but larger companies, which are also fighting to survive, will foot the bill, putting them under even more pressure.”

“Today’s Budget offers some welcome steps for small businesses,” said Fi Sellick, Head of UK Strategy at Square, pointing to the lower business rates which will benefit ~750,000 small premises operated by retailers, hospitality and leisure firms.

“This is a positive move, and funding [relief] through higher rates on larger properties could help level the playing field – as long as it doesn’t unintentionally penalise major High Street anchors that drive footfall.”

But, while growing the economy depends on the strength of small businesses, she warned personal tax changes, frozen thresholds and higher taxes on savings also announced in the Budget may limit how much extra spending reaches the High Street.

Retail businesses are contending with “huge economic pressures” from the last Budget, with a fall in sales last month due to dampened consumer confidence ahead of today’s announcement, said Chris Brook-Carter, Chief Executive of the Retail Trust.

“It remains to be seen whether today’s Budget will do enough to reassure the UK retail industry days ahead of the busiest shopping period of the year and amidst the ongoing uncertainty currently facing the sector.”

As the Christmas shopping season gets underway, he reiterated the pressure store workers are under, citing research from the Retail Trust that found 54% are at risk of leaving their jobs and 44% are working while unwell due to the insecurity they – and their employers – face. A further 77% said they have experienced physical or verbal abuse this year, with 43% coming under attack every week.

“Retail is the largest employer outside of the public sector and is a gateway to work for many people, binding our communities and High Streets together. This is something we forget at our peril,” he added.

“Our concern is job insecurity among employees could rise and shoppers’ tensions will remain heightened over the coming months. The industry needs more support from the Government, but it’s also on all of us to bring respect back to the High Street.”

The Chancellor has confirmed that Capital Gains Tax (CGT) relief on business disposals to Employee Ownership Trusts (EOTs) will be reduced from 100% to 50%.

Toy retailer, The Entertainer, and fashion brand, Lucy & Yak, have both announced moves to EOT structures this year, giving employees a controlling stake and making them indirect owners and key beneficiaries.

Christian Carr, Partner at Spencer West LLP, says the change may temper momentum but won’t undermine the model:

“Halving the CGT relief on sales to EOTs will likely cool momentum in the short-term. It raises founder tax costs, squeezes headroom for deferred consideration and is likely to bring seller price expectations closer to independent valuations.”

However, he added that “EOTs remain a robust succession route for good businesses” because they “preserve culture, jobs and independence.”

“The Autumn Budget underlines just how dramatically the retail landscape is shifting,” said Tom Summerfield, Retail Director at Peak. “And, with it, the way retailers must think about margin creation.”

As economic conditions continue to fluctuate, he highlights the critical need for retailers to be able to rapidly identify, optimise and pivot around the right commercial levers to drive sustainable, long-term performance against a backdrop of market volatility.

“The reality is that only AI can give retailers this level of precision and flexibility at scale. Without AI supporting these decisions, retailers will struggle to optimise in such a dynamic environment.”

Responding to the Budget, Helen Dickinson, Chief Executive at the British Retail Consortium, noted that while the Budget gave to the industry with one hand, it took with the other, creating inevitable winners and losers.

“The announced permanent reduction in retail business rates is an important step to reduce the industry’s burden from this broken tax. Yet the decision to include larger retail premises in the new surtax does little to support retail investment and job creation. The welcome plan to scrap the damaging de minimis loophole was weakened by a 2029 deadline. And while increases in the National Living Wage were in line with expectations, the rise to the minimum wage for under-21s could limit employment opportunities.”

Dickinson was unequivocal that the Budget didn’t go far enough to mitigate the inflationary pressures already bearing down on the industry noting the changes to business rates were a step in the right direction but didn’t go far enough.

“Including supermarkets and anchor stores in the new surtax is a retrograde step that does little to mitigate the rising cost of food and essentials. Larger stores, which already pay one third of the industry’s business rates bill and employ around a million people, should have been exempted from a surtax intended to fund support for the high street.”

As household incomes face further squeeze through fiscal drag, Catalina’s UK Country Leader, Huma Khan, warned that the Budget would solidify consumer caution; “cautious sentiment isn’t going anywhere.”

“The cost-of-living crisis hasn’t just changed behaviour, it has reset it. Even as inflation cools on paper, the value habits consumers built have become permanent. People are planning with precision, comparing relentlessly, and only paying a premium when it’s justified.”

She added that “short-term government measures won’t undo the mindset shift,” making it vital for retailers to support shoppers through value in the “new battleground for loyalty.”

“The real winners will be those who help people feel in control, combining relevance with timing. Personalised deals, meaningful rewards and intelligent, data-led experiences will make everyday spending stretch further.”

The British Independent Retailers Association (Bira) has criticised the Budget for falling short on promised business rates reform and delaying action on unfair competition from overseas sellers. It warns thousands of independent shops will face higher costs – despite government claims of support for the High Street.

“The original proposals talked about reducing multipliers by up to 20p for smaller properties and 10p for larger ones,” said Andrew Goodacre, CEO of Bira. “What we’ve actually got is a 5p reduction – and even that is largely down to the rates revaluation rather than genuine reform.”

“The government has missed a real opportunity to tackle an unfair tax that’s crippling High Street businesses.”

Despite the lower multipliers, many independent retailers will face bill increases of up to 30% next year compared to this year, which is “not the transformation we were promised,” said Goodacre.

He reserved his strongest criticism for the delayed closure of the low-value import duty loophole – the de minimis threshold – which will not take effect until 2029.

“This was supposed to be about levelling the playing field. Instead, we’ve got another four years of being undermined by cheap – and often unsafe – imports while the government drags its feet.”

Today’s Budget included the announcement of new powers to tackle the illicit trade in vapes, which include fines of up to £10,000 and new digital duty stamps to make it easier to spot fakes.

Association of Convenience Stores’ (ACS) CEO, James Lowman, said it “welcomed targeted action to disrupt the illicit trade that undermines responsible retailers across the country.” However, he added that new powers and penalties would “only be effective if Trading Standards officers have the additional resources they need to enforce [these] locally.”

The Federation of Independent Retailers (Fed) has previously campaigned for the Government to crack down on illicit goods sellers, however it expressed concerns about the implications of the new tobacco sales licencing requirements. It said:

“The introduction of licenses to sell tobacco products and vapes will place a further burden on honest shopkeepers. We want to see any scheme implemented flexibly so it doesn’t just cause more red tape for responsible retailers like our members.”

“The Autumn Budget is clear recognition that boosting the UK’s digital skills base is essential to tackling productivity challenges and ongoing worker shortages,” commented James Hall, VP and Country Manager UK&I at Snowflake.

“The Chancellor’s commitment to beating productivity forecasts underscored the role that tech will play in strengthening the UK’s economic resilience. This focus is a welcome step forward, equipping organisations with the talent they need to harness emerging technologies effectively.”

Hall added that unlocking the potential of AI and emerging technologies required ambitious and practical training initiatives, to “build a workforce “ready to harness AI responsibly and drive meaningful economic growth.”

This was mirrored by Ian Jeffs, UK&I Country General Manager at Lenovo Infrastructure Solutions Group, who said today’s Budget was a “timely reminder that digital innovation and AI will be central to driving national productivity and economic resilience.”

“To fully realise the benefits of AI, organisations must ensure they have the right infrastructure foundations in place. As AI-driven workloads grow, so too does the need for secure, scalable and energy-efficient infrastructure that enables businesses to harness and operationalise their data effectively.

Following the Budget, retailers will face ongoing cost challenges – from labour to logistics and business rates, says Consumer Champion, Martin Newman.

He warns that that may “mean the Budget’s measures only partially offset the pressure on profitability.” And this will put a renewed pressure on demand and productivity:

“With consumers still cautious, retailers should expect unpredictable trading patterns. Big events, such as Black Friday and Christmas, will become even more important, but also more competitive. As shoppers look for deals, retailers will need to compete on value, not just price – offering better service, more flexible fulfilment and stronger propositions across loyalty and personalisation.”

“Productivity and tech investment will also become mission-critical,” said Newman, adding:

“Retailers will need to invest in AI, automation, staff training and unified commerce to serve customers effectively while keeping cost-to-serve under control.”