What Changed in the November 2025 Budget

The government led by Rachel Reeves delivered a Budget that pushes up taxes in many areas, but also signalled some shifts away from earlier green-tax regimes. Highlights:

• Income tax thresholds remain frozen until 2030/31 — meaning as wages rise with inflation, more people will effectively be dragged into higher tax brackets.
• Pension salary-sacrifice contributions capped for employers and employees — reducing a popular perk many businesses used.
• Taxes on dividends, savings, property income and high‑value assets increase — adding pressure on wealth, investment returns, and passive income.
• Some green levies were removed from household electricity bills — offering limited relief for domestic users. There’s no confirmation that these changes apply to business energy contracts.
• Overall fiscal tightening is broad — across personal taxes, business cost burdens and indirect levies, as the government seeks to raise £26bn over the Parliament term.

What Businesses Should Watch

The newly released Economic & Fiscal Outlook from the OBR provides important economic and financial context. Key points:

• Economic growth is forecast to slow: The OBR has revised down near‑term growth forecasts. That suggests demand, investment returns and business expansion may be more modest than hoped.
• Borrowing costs remain high: With elevated interest rates expected to stay in place longer, borrowing (for capital investment, expansion, or green‑energy projects) will likely be more expensive, affecting financing of new initiatives.
• Public finances remain tight: According to OBR, the government must continue leaning on revenue‑raising rather than offering fresh subsidies.
• Green-tax reductions don’t necessarily mean new green subsidies: While some legacy energy levies are being scaled back, the OBR (and expert commentary) suggests there is no major new fund or broad green subsidy programme coming, meaning carbon or energy‑saving investments will likely still need to be self-financed.

What This Could Mean For Your Business

Cost pressures and tighter margins for many businesses.

With taxes rising broadly and cost-of‑capital higher (thanks to interest rates), many businesses will feel pressure on margins. Labour‑intensive businesses (due to pension changes, wage pressures or payroll shifting) may especially be impacted. 

The Budget includes a headline-grabbing £150 per year cut to household electricity bills by scrapping certain green levies. While this applies to domestic tariffs, there’s no confirmation that these changes extend to non-domestic or business energy contracts. Businesses should not expect direct savings, though long-term shifts in levy structure could influence future pricing depending on supplier and contract terms.

For businesses or investors looking at traditional savings, dividend income, or passive income, these yield streams may become less attractive due to higher taxes.

Limited support for energy & sustainability investments.

The absence of new broad‑scale green subsidies or decarbonisation funds (as per OBR and other analyses) means companies choosing to invest in renewables, energy efficiency or low‑carbon infrastructure will likely have to self-fund or rely on internal ROI.

That makes a transparent, data‑driven decision‑making platform, like ours, even more critical. Being able to map out real financial and carbon return, compare suppliers and forecast long‑term savings vs upfront cost becomes not just a 'nice to have' but a business necessity.

Investment planning will need to be more conservative and strategic.

With economic growth weaker and borrowing costlier, long‑term investments will need stricter due diligence and clearer return‑on-investment (ROI) cases.

Sustainability and energy projects may fare better, especially those that reduce fixed costs (e.g. energy efficiency, consumption management, renewables). Those can help businesses hedge against future volatility and increased taxation/levies.

Strategic advantage for businesses that commit to sustainability now.

Businesses that invest now while energy costs are eased somewhat can lock in lower running costs before any future policy or tax changes.

For companies with ESG or net zero commitments, investing sooner rather than later gives a competitive and reputational edge, especially when many firms may hold off due to wider economic uncertainty.

Why This Matters

This Budget, reinforced by the OBR outlook, makes one thing clear: Britain is entering a period of fiscal tightening, slower growth and reduced appetite for broad, public-sector‑funded green initiatives.

Companies can no longer rely on generous subsidies or preferential tax treatment when planning sustainability or energy projects.

Selecting the right energy strategy, procurement path, carbon‑reduction technology or supplier isn’t just about being green anymore, it’s about safeguarding competitiveness, controlling costs and future‑proofing the business.

A robust, data-driven platform that helps compare costs, forecast returns (financial and carbon) and evaluate supplier options, that’s not a luxury, it’s a strategic asset.

What To Watch For Next

• Whether the government publishes further detail on green-tax/levy removals and whether any targeted subsidies are introduced. These could materially shift expected returns on energy and sustainability projects.
• How interest rates and borrowing costs evolve. These will be critical for companies planning capital-intensive investments (e.g. renewables, retrofits, energy-efficiency).
• Corporate response: will businesses accelerate self‑funded sustainability investments now to lock in energy‑cost savings? Or will uncertainty slow down ESG / net zero spending overall?

Ready to make sense of the Budget and sharpen your net zero strategy?
Book a call with our team and let’s map out your next move.