The 2025 Budget - a review

The UK Government's 2025 Budget, announced by Chancellor Rachel Reeves, introduces several measures affecting business travel expenses for UK-based travellers. Overall, it prioritises stability and incentives for greener options, with minimal disruptions to everyday commercial travel.

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Good news for most business air travellers: no additional taxes on standard commercial flights, maintaining cost predictability for essential trips. However, from April 2027, higher Air Passenger Duty rates apply to private jets over 5.7 tonnes, which could increase expenses for companies using luxury or chartered options.

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A positive development with regulated rail fares in England frozen for one year until March 2027, offering potential savings of around £300 annually on major routes and easing budgets for frequent business rail commuters.

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Short-term relief via 5p fuel duty cut extended to 2026; strong EV incentives (grants, higher VED thresholds, full chargepoint relief, delayed BiK changes); offset by new £240 EV road tax from 2028, small VED rises, and higher taxi/private hire VAT from 2026.

𝗛𝗼𝘁𝗲𝗹𝘀
Visitor Levy for Mayors: Allows English mayors (and potentially other authorities) to introduce a levy on overnight accommodation after consultation; this may increase costs for business hotel stays in participating areas, though no fixed rate or start date is set yet. No other changes, such as VAT adjustments on hospitality, were announced.

While the Chancellor has set the fiscal direction for the coming years, now is the perfect moment for companies to do the same with 2026+ travel budgets.