The Autumn Budget 2025, announced by Chancellor Rachel Reeves, comes at a time of continued economic uncertainty. Inflation remains elevated, borrowing costs are high, and consumer spending faces ongoing pressure. For the home and giftware sector, which spans manufacturing, wholesale and retail, the Budget brings a mixture of challenges and opportunities. Here’s a summary of the key measures and how they might impact businesses across the sector.

1. Business Rates Reform - Relief for Smaller Retailers, Increased Costs for Larger Stores

From April 2026, a two-tier business rates system will be introduced. Properties with a rateable value under £500,000 will benefit from lower multipliers, offering some relief to smaller, independent shops and boutiques. Meanwhile, larger retail outlets and distribution centres will face higher multipliers, expected to add around £1.38 billion annually in additional costs for these bigger operators.

For smaller gift retailers, this could help ease some financial pressure, supporting local high streets. However, larger retailers may reconsider investment or expansion plans, which could impact the wider supply chain and supplier orders.

2. Employer Costs – National Insurance and Living Wage Increases

The Budget confirmed increases in employer National Insurance contributions and the National Living Wage. These changes will increase payroll costs across retail and supply chains. Given the already tight margins in the giftware industry, businesses may face pressure to adjust pricing or staffing levels, potentially affecting entry-level roles and overall workforce structure.

3. Closing Import Duty Loopholes

The government plans to end low-value import relief, targeting small parcel shipments from overseas online retailers. This measure aims to level the playing field for domestic businesses, many of which pay import duties on bulk shipments. UK based giftware brands may benefit from improved competitiveness as a result.

4. Investment Incentives for Small and Medium Enterprises

The Budget retains the £1 million Annual Investment Allowance for plant and machinery, alongside a permanent 40% First Year Allowance for main rate assets. This encourages businesses to invest in production equipment and automation which is an important support for small giftware manufacturers looking to modernise and improve efficiency.

5. Sustainability and Packaging Levies

A new packaging levy is planned, introducing compliance costs for both suppliers and retailers. Businesses should begin preparing for these changes by exploring eco-friendly packaging options and factoring associated costs into pricing strategies.

6. Consumer Confidence and the Golden Quarter

With inflation still a concern and household budgets squeezed, the overall outlook points to cautious consumer spending through the critical Christmas trading period and into 2026. Retailers may need to focus on value-driven product ranges, loyalty schemes and enhancing the shopping experience to maintain customer engagement.

How Giftware Businesses Can Prepare

- Retailers should plan for higher employment and compliance costs, while exploring automation and digital tools to boost efficiency. Diversifying sales channels, including strengthening online and direct-to-consumer options, will be key.

- Suppliers can use investment allowances to upgrade production capabilities, prepare for packaging compliance and consider sustainability a selling point. Expanding export opportunities and direct sales may help build resilience.

The Autumn Budget offers some relief to smaller businesses but introduces significant structural changes for the wider home and giftware sector. Success will depend on adaptability: controlling costs, diversifying channels and responding to sustainability demands. The Giftware Association will continue to support members as the industry faces these challenges and opportunities in the months ahead.

Read the full Budget 2025 document.