With the Autumn Budget due on 28 October 2026, UK businesses in construction, manufacturing, and farming face a landscape of speculation and uncertainty. These sectors are expected to be directly impacted by upcoming fiscal measures. While the government has pledged not to raise Income Tax, VAT, or National Insurance for ‘working people’, tax increases and structural reforms are widely expected. Will the Chancellor’s decisions ease financial pressures or leave struggling businesses with fewer options?
Capital Gains Tax
Capital Gains Tax (CGT) rates could be raised substantially, possibly up to 45% in alignment with Income Tax rates. Disposals would become much more costly as a result, which in turn would reduce cash available for debt repayment or reinvestment, and make it difficult for distressed businesses to restructure or sell assets. This could therefore directly impact construction, manufacturing, and property businesses that need to dispose of assets.
This could also impact decisions relating to succession planning for farming families. CGT directly affects succession planning as any transfer or sale of business assets, other than on death, may trigger a CGT liability. Higher CGT rates or reduced reliefs mean a larger tax bill, potentially threatening the financial viability of keeping the business in the family.
Agricultural and Business Property Relief: Inheritance Tax uncertainty
Changes to inheritance tax (IHT) remain a significant concern for farmers following changes to Agricultural Property Relief and Business Property Relief (APR/BPR), which took effect in April 2026. Under the revised rules, an allowance of £2,500,000 applies to a combined value of qualifying agricultural and business properties eligible for 100% relief. The government is reportedly considering raising the APR/BPR threshold further, potentially to £5 million, or even scrapping the controversial levy introduced in 2024.
For farming and rural businesses, this could reduce IHT exposure and succession risk, as fewer businesses would face IHT on their business assets. In turn, this allows assets to be passed on to the next generation and reduces the risk that the business will have to be broken up or sold to pay the tax. However, the lack of clarity leaves many facing difficult planning decisions. Until there is further clarity on agricultural reliefs and business taxation, farming families should review their succession plans and seek specialist tax advice.
Business rates: reliefs and reforms
From April 2027, there will be a 20% cut in business rates for pubs, social clubs, and live music venues in England, with further reforms signalled for the Autumn Budget. Proposals include raising the Small Business Rate Relief (SBRR) threshold to £17,096, meaning that more small businesses with properties whose rateable value is at or below this amount would pay reduced or zero business rates. In the same context, reclassifying holiday lets as second homes would mean these properties no longer qualify for SBRR, in turn losing their exemption from business rates and instead become liable for council tax.
Fuel duty and compliance costs
A planned 3p/litre fuel duty rise in January 2027 is now uncertain. Construction, manufacturing, and agricultural businesses should monitor this closely, as higher fuel costs would lead to tighter margins. Separately, the Budget is expected to accelerate digital tax compliance, requiring investment in systems and increasing governance costs.
What should company directors do?
The Autumn Budget 2026 is likely to bring targeted tax rises, relief reforms, and new compliance burdens at a time when many businesses in construction, manufacturing, and farming are already financially stretched.
Directors should act now to review risks, engage with advisors, and protect both their business and personal positions.
If you are a director of a company which is facing financial difficulties, you should consider taking the following steps, to protect your own personal liability and the company creditors:
- Seek independent advice from a lawyer or licensed insolvency practitioner as soon as you become aware of potential financial difficulties. They can advise you on your options and whether a recovery strategy or insolvency strategy is more appropriate.
- Always keep your director duties in mind. Your actions must comply with these duties and may be scrutinised at a later date by an officeholder if the company enters into a formal insolvency process.
- Only continue trading if it is the best course of action for creditors as a whole and take steps to minimise the loss to creditors.
- Maintain a good and consistent line of communication with all creditors.
- Have regular board meetings to discuss the company’s financial position and keep detailed and accurate minutes which set out each step taken to improve a creditor’s position or ensure their interests are not prejudiced. Keeping minutes will assist the board should they be required to explain their decision-making later.
- Immediately respond to any demands for payment and legal proceedings served on the company, even if you cannot pay them.
- You should ideally ensure that realistic budgets, forecasts, and management and trading accounts are reviewed on a weekly basis.
- Ensure accounts are being properly kept up to date.
- Conduct a full review of the costs and expenditure of the company; consider what non-essential expenditure can be reduced or avoided at an earlier stage.
- Check what insurance cover the company has and review the policy documents carefully and seek guidance from your broker if necessary.
- If avoiding insolvent liquidation is not an option, you should take immediate advice on instituting a formal insolvency procedure without delay.
If you are concerned about the above impacts or the financial health of your company, please contact Aman Sehgal.
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