The Chancellor of the Exchequer Rachel Reeves announced her 2025 Budget today, and there’s plenty for small builders to digest. From tax changes to planning reforms, these decisions will shape how you run your business in the months and years ahead. The FMB has been working hard to make sure your voice is heard, and today’s announcements include some wins - as well as some challenges.
Here are the five key things you need to know:
1. Landfill tax reform - a big win for builders
The Government has pulled back on plans to merge landfill tax rates, which could have added £28,000 to the cost of building new homes. Instead, the gap between the two rates will be narrowed, helping to keep costs down for builders. While this is a positive step, the system remains complicated, and we will keep pushing for further simplification.
2. Free apprenticeship training for under-25s in SMEs
If you’re thinking about hiring an apprentice under 25, here’s good news: training will now be completely free for SMEs. This means no co-investment costs for you, making it easier to bring young talent into your business. The Government has also promised to simplify the application process, so taking on an apprentice should become less of a headache.
3. £48 million to boost planning capacity
Delays in planning are one of the biggest frustrations for builders. The Government is investing £48 million over the next three years to strengthen planning departments and speed up decisions. This includes hiring more planners and improving systems. It’s a welcome move, but given the scale of the problem, we will keep pressing for more support to get projects moving.
4. Minimum Wage rise and tax threshold freeze
The National Living Wage will rise to £12.71 per hour from April 2026. While this is good news for workers, it will increase costs for small businesses already under pressure. On top of that, income tax thresholds are frozen until 2031, meaning more builders could be pushed into higher tax brackets. Careful budgeting will be essential.
5. Dividend tax rates going up
If you pay yourself through dividends, take note: from April 2026, the ordinary and upper rates of dividend tax will rise by 2 percentage points. This means more money going to the taxman and less in your pocket. For many small business owners, this will feel like another squeeze on already tight margins.
What was missing: no action on domestic retrofit - and ECO scheme dropped
Upgrading Britain’s ageing homes is vital for energy efficiency and comfort, but the Budget offered no new support for retrofit projects. In fact, the Energy Company Obligation (ECO) scheme is being scrapped. This is a missed opportunity, and we will continue to call for a national retrofit strategy to help builders play their part in improving homes.
The Budget delivers some wins for small builders, but it also leaves big gaps that need urgent attention. From fairer taxes and better planning systems to a national retrofit strategy, the FMB will keep fighting for the changes that matter most to you. We’ll continue to push Government to back Britain’s builders, because when you succeed, communities thrive.
