Autumn Budget 2025: What it means for international businesses in the UK

Rising costs of employing staff in the UK

International companies with UK-based employees will feel the impact of rising labour costs, including:

• An increase in the National Living Wage will affect sectors reliant on large, entry-level workforces, such as logistics, hospitality, retail, facilities management and manufacturing.
• The freeze on Income Tax thresholds until 2030–31 means wage inflation will push employees into higher tax bands more quickly, increasing pressure to raise salaries simply to maintain net pay.
• Skilled workers may expect higher compensation to offset fiscal drag in the coming years.

The cap on pension salary-sacrifice National Insurance relief will further increase employer NI costs, particularly for organisations offering internationally aligned executive benefits. Companies relocating global talent to the UK may need to restructure compensation packages to remain attractive.

Taken together, these measures represent a material increase in the cost of employing staff in the UK—an important factor for global businesses expanding local operations.

Profit extraction and executive remuneration

A 2% increase in tax rates for dividend income, savings income and property income could further raise personal tax liabilities for expatriates and senior executives with thee income streams. The new £2,000 cap on pension salary-sacrifice relief may also require a review of long-term incentive plans and retirement strategies.

Rising relocation costs

For businesses relocating international talent—especially to London and the South East – the higher council tax multiplier on homes valued above £2 million (effective April 2028) adds another cost pressure. This may impact budgets for senior executive housing or corporate-owned accommodation.

While London remains a leading global executive hub, these changes increase overall mobility costs, which may prompt businesses to reassess their relocation policies.

Reforms to working visa’s

The Chancellor referenced upcoming reforms to the UK visa system aimed at supporting skilled global talent, although full details have not yet been released. A formal consultation is expected shortly, and international employers should monitor updates closely.

Exporting to UK consumers? New rules for small consignments

The Budget confirmed the removal of the customs-free £135 threshold for low-value parcels imported into the UK. This aligns the UK with global trends:

• The United States removed its $800 threshold in August 2025.
• The EU will withdraw its €150 threshold from March 2028 as part of its customs reforms.

Businesses sending parcels directly to UK consumers will need to prepare for additional customs duty charges and increased administrative requirements.

Listing in the UK? New relief introduced

A new UK Listing Relief will provide a three-year exemption from Stamp Duty Reserve Tax (SDRT) for companies listing on UK markets.

• Applies to share transfer agreements dated on or after 27 November 2025.
• Covers the first three years following a company’s listing.
• Does not apply to the 1.5% SDRT charge or transactions linked to mergers or takeovers involving a change of control.

The measure aims to make newly listed companies more attractive to investors compared with larger, established listed entities.