Big matters impacting retail and hospitality arising from budget announcements
Colin Johnson November 26th 2025
After an eventful day for Rachel Reeves, the Chancellor announced her bold vision to address the significant fiscal black hole.
Within her Autumn Statement she announced a series of measures that she hopes will stabilise the UK Economy.
Colin Johnson, Partner of MHA looks at some of the key points that particularly impact the retail and hospitality sectors.
Colin commented “It was widely anticipated that there would be tax increases in this budget, however, perhaps due to an element of political spin, what has been announced may not immediately seem to be quite as bad as feared. As always though, the devil may lay in the detail, which in many cases has yet to emerge”.
“The budget ends a period of uncertainty but now brings a number of challenges, including frozen tax and NIC rates which will squeeze spending power, and more pensioners will face income tax, potentially making trading conditions tougher.”
The announcements will also have an impact on the operating costs of many businesses, Colin continues:
“National Minimum wage increases will create a significant additional burden on employers in the sector, especially after the increases in last year’s budget, along with the hike in Employers National Insurance Costs. The fact that rates for younger employees increased at higher rates, will likely burden the sector further, given the significant number of employees from that demographic that are employed in hospitality and retail businesses.
“This could have the detrimental effect of deterring employers from hiring and may also add increased training costs, burdening employers even more financially.
“Business rates reform will create winners and losers, with large properties and high-value sites, such as supermarkets, major hotels and larger caravan parks, likely to bear the greatest brunt, although operators in lower value properties may see some benefit.”
Increasing custom duties will be seen by many UK based retailers as a welcome piece of news from today’s Budget, and this is echoed by Colin:
“Ending the import duty exemption on goods under £135 will level the playing field for UK retailers, aligning the system with the US and EU and removing the advantage for overseas sellers of low-value items. This will be welcomed by businesses across the country.”
However, he does not share quite the optimistic tone on another duty which was addressed today, that being fuel duty and the introduction of an electric car mileage tax.
"Higher fuel duty on conventional fuels and a new mileage tax for electric and hybrid cars may discourage UK holidays, especially in rural destinations where public transport is limited, and may also deter people from travelling to visit retail sites."
There was certainly a lot to take away from today’s Budget, and the devil will be in detail as further details are announced over the coming weeks and months.
Follow our dedicated Autumn Budget Hub to keep abreast of all the developments and how they will impact businesses and individuals.
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