The Autumn Budget has triggered fresh debate among South Asian communities and SMEs, many of whom are seeking clarity on measures that could quietly reshape their financial future.
From stealth taxes and pension sacrifice rules to the long-discussed mansion tax and the weakening value of the pound, the implications reach far beyond headline announcements. To unpack what these changes really mean for households and small businesses, we spoke with Kiran Patel, Director at Khi Partners. Here’s what he had to say.
1. How has the Autumn Budget been received by financial markets, and what does that signal about the pound’s direction?
So far the reaction has been fairly calm and mildly positive. Gilt (UK government bond) prices held up and even ticked higher, and the pound moved slightly stronger against the euro and dollar after the speech, which suggests markets were relieved there was no big negative surprise.
In plain terms, investors see the plans as broadly credible for now. That gives the pound a bit of support in the short term, but its direction from here will still depend more on the Bank of England and the wider global economy than on this one Budget.
2. When the tax-threshold freeze is lifted, what will that mean in practical terms? Will high earners face extra tax on income from the freeze years?
The freeze pulls more people into paying tax, and pushes many into higher bands, as wages rise but the thresholds don’t move. That effect continues each year until the freeze ends.
When thresholds eventually start to rise again, there is no backdated tax and no special extra bill on income you earned during the freeze – you’ve already paid the tax on that. A higher threshold in future simply slows or reverses the drift into higher bands. High earners will keep paying the higher tax they were brought into during the freeze; they just won’t be dragged further up as quickly once thresholds start to move again.
3. Many economists say tax freezes are effectively tax rises. How might these stealth taxes shape the UK economy?
Because more people pay tax, and more of their income falls into higher bands, the government quietly collects more money without ever increasing the official tax rates – which is why economists call it a “stealth” rise. The OBR expects millions more people to pay income tax or move into a higher rate as a result.
Over time, this squeezes take-home pay for working households and small business owners, leaving them with less to spend or invest. It helps the Treasury close the deficit, but if taken too far it can also dampen consumer spending, reduce incentives to work extra hours or take risks, and weigh on long-term growth.
4. The Budget caps National Insurance-free pension salary sacrifice at £2,000 from 2029. What does this mean, in simple terms, for employees and employers?
Right now, if you give up part of your salary and have it paid into your pension instead, you and your employer usually save National Insurance (NI) on the whole amount. From April 2029, that NI saving will only apply to the first £2,000 a year of salary you sacrifice into your pension. Anything above £2,000 will be treated like normal pay for NI purposes.
For most people making modest extra pension contributions, nothing will change – they’ll stay under the £2,000 limit. The impact is mainly on higher earners and company directors who sacrifice large sums; they will see lower NI savings, and employers will face higher NI costs on those bigger contributions.
5. Why has the government targeted pension salary sacrifice, and how significant is this change, especially for small businesses?
The official argument is that the current system is costing the Exchequer too much and gives the biggest benefit to the highest earners. The cost of NI relief on salary sacrifice has roughly tripled over the past decade and was on course to rise further, so the Chancellor has chosen to cap it rather than scrap it entirely.
Compared with today, this is a big change for people and employers using very large salary sacrifice arrangements; for them, the NI advantage above £2,000 disappears. For small businesses with tight margins, especially those where owners pay themselves largely via salary sacrifice into pensions, it means higher NI bills and less “tax-efficient” reward. Many will need to revisit how they pay directors and key staff – balancing salary, bonuses, dividends and pensions in a new way.
6. How does the new “mansion tax” work, and will it strain asset-rich but cash-poor owners like retirees?
The so-called mansion tax is a high-value council tax surcharge. From April 2028, if your home in England is officially valued at more than £2 million, you will pay an extra annual charge on top of normal council tax. Current plans point to a charge of around 1% a year on the value above £2m, with bands that translate into bills of roughly £2,500 to £7,500 a year for the most expensive homes.
Yes, this could be a real strain for “asset-rich, cash-poor” owners – for example retirees who bought long ago and now live in valuable homes on relatively modest incomes. The government is looking at letting some people defer payment until the property is sold or passed on, but that would roll up as a debt with interest, reducing what they or their heirs ultimately receive. So affected households will need to plan carefully – potentially by budgeting for the annual charge, considering downsizing, or taking advice on sharing ownership across the family.
