Budget 2025: What It Means for Tradesure Motor Trade Businesses

27 Nov, 2025

Budget 2025 didn’t make dramatic changes, but several updates will shape the running costs, overheads and day-to-day trading for motor traders.
Here’s a simple guide to what matters — without the jargon.

Does the 2025 Budget Affect Fuel Costs for Motor Traders?

Is fuel duty going up?

No — fuel duty is frozen until September 2026.
This benefits all traders who regularly collect, test-drive and deliver cars.

Who benefits most?

  • High-volume traders collecting from auctions weekly

  • Part-time traders doing local test drives

  • Specialist traders running higher-performance vehicles during repair checks

Predictable fuel costs are a win for the trade.

Will Labour Costs Go Up?

Is the National Living Wage increasing?

Yes — from £12.21 to £12.71 in April 2026.

How does this affect traders?

It depends on your setup:

Part-time traders:
Barely affected unless you pay helpers or valeters.

High-volume traders:
Expect higher costs for:

  • valeting

  • minor prep

  • drivers you pay for collections

Specialist traders with workshops:
Labour costs could increase for mechanics, strip-and-fit staff, or apprentices.

It’s not a huge jump, but it should be built into next year’s pricing.

Does the Budget Change Tax for Motor Traders?

Corporation Tax:

No change.
Good news for limited company traders — tax planning stays predictable.

Employer National Insurance:

Unchanged.
Helps traders who employ valeters, admin staff, or mechanics.

Dividend Tax:

Yes — dividend tax increases by 2 percentage points from April 2026.

Who does this affect?

  • Limited company traders paying themselves via dividends

  • Specialist traders with higher margins

  • High-volume dealers running incorporated businesses

Take-home profit will be slightly reduced.

Will Buying and Selling Stock Get More Expensive?

Not directly from the Budget.

But traders will still see industry-driven cost increases:

  • Higher auction fees

  • More expensive transport

  • Rising reconditioning costs

  • Higher demand for clean, retail-ready stock

These trends come from the market — not government tax changes.

Does the Budget Affect Motor Trade Road Risk Insurance?

Any new taxes on insurance?

No — Insurance Premium Tax (IPT) did not change.

Will Road Risk premiums go up?

Not because of the Budget — but premiums may still rise due to:

  • parts price inflation

  • higher repair labour costs

  • increased theft claims

  • more expensive to replace modern vehicles

Tradesure will continue adjusting cover to help traders keep costs under control.

Does the Mansion Tax Affect Motor Traders?

Do motor traders need to worry about the Mansion Tax?

Generally no.

The Mansion Tax applies to residential homes valued:

  • over £2 million (£2,500 per year)

  • over £5 million (£7,500 per year)

Most traders — even successful ones — won’t be affected.
For those who are affected, it becomes one more annual business-planning cost, but it has no connection to vehicle trading.

Will the Budget Affect Traders Who Travel for Auctions or Collections?

Does the Budget change travel costs?

No — there are no new taxes on travel, flights, or domestic transport.

But outside the Budget, traders may still face higher travel expenses due to:

  • rising hotel costs

  • higher transport costs

  • auction travel demand

  • general inflation across the industry

These are market factors, not Budget decisions.

How Does the Budget Affect Part-Time Enthusiast Traders Specifically?

  • Fuel stability keeps hobby trading affordable

  • No changes to insurance tax

  • Minimal impact on part-time operations

  • Slight dividend impact if operating as a limited company

  • Labour cost changes only matter if you outsource prep work

The Budget is overall neutral for this group.

How Does the Budget Affect High-Volume Quick-Flip Traders?

  • Fuel freeze is the biggest win — especially for auction days

  • No corporation tax change keeps planning simple

  • Wage increases mean valeting and prep will cost more

  • Dividend tax rise affects limited company owners

  • Insurance remains pressure-driven, not Budget-driven

Predictability helps traders focused on tight margins.

How Does the Budget Affect Specialist Niche Traders?

  • Labour increases matter for workshops

  • No corporation or insurance tax changes

  • Dividend rise affects specialist limited companies

  • Energy levy reductions help garages with high energy use

  • Stable fuel duty helps with road testing and parts runs

The Budget supports stability for long-term specialist businesses.

What Are the Most Important Takeaways for Motor Traders?

1. Fuel duty frozen — lower operating costs

2. No change to Corporation Tax or Employer NI

3. Dividend tax rising for limited company traders

4. Labour rates increasing in 2026

5. Insurance not affected directly by the Budget

6. Mansion Tax irrelevant for 99% of traders

For most traders, Budget 2025 is a stable, predictable year — ideal for focusing on stock, cash flow, and growing margins without new tax shocks.