Local businesses in Leeds and across West Yorkshire are preparing for a series of significant financial changes following the UK Government’s 2025 Budget. Measures following this will begin taking place from April 2026. The Budget introduces both increased employment costs and long-term tax adjustments intended to support high street sectors.
The government has confirmed that the National Minimum Wage for workers aged 21 and over will rise from £12.21 to £12.71 per hour, with the 50p increase due to come into force in April 2026. The move is expected to support low wage employees during the ongoing cost of living crisis; however, many employers are faced to reassess staffing budgets due to this.
Alongside wage increases, the 2025 Budget introduces permanent reforms to business rates. More than 750,000 retail, hospitality and leisure properties are set to benefit from lower business rates, a reduction the government estimates will be worth nearly £900 million per year from April 2026. The reform forms part of a wider effort to support high street sectors that continue to face challenging trading conditions.
The Budget also outlines a £4.3 billion business rates support package, designed to limit sharp increases in business rates bills for sectors most affected by the 2026 property revaluation. The government says the package will act as a stabiliser during the transition to new rateable values.
However, some local business owners remain uncertain about the impact of the measures. Savannah, owner of The Savvy Baker in Leeds, said the Budget had left her feeling unsure about the future. “The Budget has raised more questions, and I don’t feel confident in it,” she said. “Instead of supporting small businesses, it’s really going to take more of an effect.”
Leeds City Councillor Katie Dye echoed concerns about the wider pressures facing businesses. She said: “We know it’s not just the increase in wages; we know the increase in energy costs and the cost of materials, particularly for businesses buying consumables. I don’t think the Budget will make anything easier in Leeds.”
Councillor Dye said the council continues to support both startups and established small businesses across the city, highlighting Leeds’ strong history of entrepreneurship and scale-up opportunities. She added that graduates looking to start their own businesses are encouraged to seek council support.
However, she acknowledged that the council’s ability to assist is limited by its own financial position. “The council is in a difficult financial situation, so the amount of help we can give will depend on the financial settlement we receive,” she said.
She urged struggling businesses to get in touch, adding: “We do have support, so any businesses that see this don’t hesitate to contact the council if you’re struggling.”
For Leeds high street businesses – including cafés, independent retailers and hospitality operators, the year ahead will involve preparing for both higher wage bills and potential changes to their rates liabilities. The true local impact will depend on the size, location, and rateable value of each business, as well as how employers adapt ahead of April 2026.
