Business organisations, advisers and companies here have given a negative reaction to yesterday’s Budget from Chancellor Rachel Reeves.
A number described it as a ‘missed opportunity’ while others singled out specific measures for their detailed criticism.
Trade group Hospitality Ulster said that the Budget “did nothing to alleviate the pressures facing the hospitality sector.”
“There has been no action affecting the local sector on business rates or VAT, the two measures that could provide real relief, while wage rises have further increased operating costs. At the same time, frozen tax thresholds mean consumers will have less disposable income as inflation drags more people into higher tax bands, weakening purchasing power even further,” said Chief Executive Colin Neill.
Retail NI Chief Executive Glyn Roberts described it as a “missed opportunity”, but the retail body did offer one note of welcome.
“Retail NI does welcome the £16 million funding to create a Northern Ireland business concierge and trade resolution centre to sort out complex disputes with the Windsor Framework. A considerable number of our members are experiencing difficulties receiving product lines from GB suppliers and we hope that this will address this problem,” said Glyn Roberts.
Tina McKenzie, Policy Chair at the Federation of Small Businesses NI, issued a warning over ongoing fiscal policy.
“Today’s tax-raising Budget shows the peril of a continuing economic doom loop – we must not be in the same place again next year, with more tax hikes to balance the books due to a lack of economic growth. The tax burden at a record high is the cost of failure to get growth and trim spending.
“Hikes to dividend tax mean the Government continues to make investing in your own business one of the least tax-friendly things you can do with your money. Plans to charge employers for supporting pension savings are a bad idea. The business rates measures will not help small firms and high streets nearly enough.
“We need the Government to follow this Budget through with serious, pro-growth measures that restore the confidence small businesses need to grow, invest and hire. Ministers must now bring forward pro-business, pro-growth policies. Otherwise, we’ll be back at square one, stuck in the same rut we were in last year.”
Meanwhile, Belfast International Airport Chief Executive Dan Owens, was a strong critic of Budget. “For a Chancellor and Government that talks about growth, this budget will likely damage the UK’s tourism and aviation sector with its increase in Air Passenger Duty. As an island off an island, NI needs air travel, as we do not have the option of rail connectivity that the rest of the UK has,” he said.
“This is an additional tax on air travel that the Irish Republic does not have and therefore it makes NI less attractive to airlines considering introducing new routes. This is a harmful tax that suffocates economic growth.”
Chartered Accountants Ireland has reiterated its concerns about the proposed changes to agricultural property relief (APR) and business property relief (BPR), due to come into effect in April 2026, and the disproportionate impact these changes will have on Northern Ireland.
“The proposed changes are already having massive ripple effects across the UK economy, but most notably for the farming community. These changes are disappointing and particularly damaging in Northern Ireland where family-owned businesses and farms are the heartbeat of the economy. 84% of businesses here are either family owned or managed, and they support over 325,000 jobs,” said UK Tax Manager, Leontia Doran.
“A carve-out is needed to exempt genuine farming activity and protect family-owned businesses in NI. The Government could have included a threshold which would have continued to provide smaller farms and businesses with 100% relief if their farming and/or business assets comprise a minimum proportion of their overall estate. It is also disappointing to see that no transitional measures have been announced to protect older taxpayers. The announcement that any unused allowance will be transferable between spouses is welcome. This is the minimum that could have been done to remove the legislation’s cliff edge effect for smaller farms and businesses. More is needed to support genuine farming activity and family-owned businesses here in NI.”
Anna Doherty, Chief Executive of Derry Chamber, was another in the “missed opportunity” camp. “This Budget is a missed opportunity for Northern Ireland and especially for the North West. At a time when we should be putting an end to short-termism and shifting to long-term economic planning, the Chancellor has instead delivered another round of tightening that offers little strategic direction. While the measures announced apply across the UK, their effects will be felt more sharply here, where our SMEs already operate within a uniquely complex post-Brexit environment.”
Meanwhile, the commentators from Northern Ireland’s leading accountancy and business advisory firms produced a detailed and varied response for the Rachel Reeves Budget.
Lorraine Nelson, Tax Partner at BDO Northern Ireland (BDO NI) has described the Budget as “one with many tweaks, but we’ll have to wait a little before seeing them come to fruition.”
“This Budget was about steadying public finances whilst trying to ease pressure on working households,” comments Lorraine Nelson.
“It is clear it will have a real impact on how people in Northern Ireland live, work and do business. For many, including several of our clients, the headlines will be the changes to income tax rate for dividends, interest and property income alongside fiscal drag on thresholds and increased costs for employers, combining the restriction on pension salary sacrifice and increases to National Minimum Wage.”
Andrew Webb, Chief Economist at Grant Thornton Northern Ireland, offered up a different take. “For Northern Ireland, where the Executive is grappling with a sizeable budget shortfall of its own, the UK picture offers little comfort. An extra £370m for NI from this budget does not touch the sides of our own fiscal challenges and of Westminster is pushing a narrative of raising tax to fund renewal and fairness, Stormont will surely come under Treasury pressure to do the same.
“And that, really, is the story of this second Budget: steady, serious, cautious – but not transformational. The Government talks often about growth. The OBR’s assessment reminds us how far away it still is and how hard it is to engineer.”
His counterpart at PwC in Belfast, Greg Boyd, took a more positive stance. “This Budget leans heavily on revenue-raising measures at a time when public finances face increasing pressure. For Northern Ireland, where public services are already under significant strain, placing more of the fiscal adjustment on higher taxes rather than spending cuts will help protect Stormont’s budgets.
“The Budget confirms that the Northern Ireland Executive will receive an additional £370 million in funding – £240 million in resource funding and £130 million in capital funding through the Barnett formula, on top of record settlements from the 2025 Spending Review. This provides a much-needed boost to Stormont’s finances at a time of acute fiscal pressure.”
Mark Hood, Head of Tax at HNH, had a mixed view on the measures announced by the Chancellor.
“The Budget announcements from the Chancellor may not have been as impactful on business as those introduced last year but there was still a lot of changes to be carefully considered.
“Whilst the income tax rate on property, savings and dividend income was increased by 2%, there we no increase in the rate of corporation tax, capital gains tax, VAT or Inheritance tax. However, the reduction in the annual capital allowance rate from 18% to 14% will result in higher tax bills for businesses.
“There was some better news with the announcement of increased threshold limits enabling larger companies to offer tax favoured share options to their employees. There will also be more scope to invest under the Enterprise Investment Scheme due to increased company size thresholds. However, relief for investment into Venture Capital Trusts will fall from 30% to 20%.
“The Capital Gains Tax relief on disposals to employee ownership trusts (‘EOT’s), will be reduced from 100% to 50%, making it less attractive to those passing on or selling businesses by this increasingly popular method.
And Neil Armstrong, Tax Director at Baker Tilly Mooney Moore, summed up the Reeves Budget well.
“Having briefly floated the possibility of increasing income tax, Rachel Reeves quickly discovered just how little room she had to manoeuvre. The reaction was swift and negative, and for a Chancellor who had repeatedly pledged not to raise taxes on people, it closed off one of the most direct revenue-raising routes. It is therefore unsurprising that the centrepiece of the Budget targeted measures affecting only a minority. The so-called “mansion tax” will be felt in parts of London and the South East of England but barely registers in Northern Ireland. Politically, it is a neat move: lucrative for the Treasury and unlikely to trouble most voters.
“When the dust settles, the reality remains that every taxpayer will end up contributing more, whether or not it is immediately obvious. Reeves may hope this careful balancing act will spare her the political fallout of more direct tax rises, but despite the targeted nature of many announcements, this was still a revenue-raising Budget, one that quietly ensures we will all feel its impact in the months ahead.”