The latest UK Budget is full of technical tax tweaks and policy changes that can easily feel remote from day-to-day clinical work. But taken together, these announcements will shape the financial reality for physiotherapy and veterinary clinics for years to come.
While headline messages promise help with living costs, the deeper story is clear:
the tax burden on working people and small business owners continues to rise, even as household budgets remain fragile. For clinic owners and self-employed therapists, this means tighter margins, increased staffing pressures and a more complex business environment.
Below is a ground-level breakdown of the budget measures most likely to affect you — and what they mean for the future of your clinic.
Higher Than Expected Cost Pressures Ahead
Inflation is now expected to reach 3.5% this year — higher than previous estimates of 3.2%.
For clinic owners, this means:
- Rising costs will not ease as fast as previously hoped.
- Pricing will need to reflect a higher baseline for rent, utilities, consumables and staff pay.
- Self-employed therapists should expect personal cost-of-living increases to put pressure on their required day rates.
Inflation alone will drive the need for more frequent price reviews and a stronger focus on cost control.
The Stealth Tax Continues
The Government has extended the freeze on income tax and National Insurance thresholds until 2030–31. Thresholds won’t rise with inflation – meaning more people pay more tax over time.
Why this matters
- As wages rise, staff drift into higher tax bands without feeling richer.
- Directors who pay themselves a mix of salary and dividends face increasing personal tax pressure — especially as dividend tax will rise by two percentage points from April 2026.
- For self-employed therapists, your real take-home pay will shrink unless you adjust pricing.
Bottom-line: To stand still financially, both wages and pricing must rise.
Future Cost Pressures for Mobile Services
For years Electric Vehicles have been seen as the ideal solution for home-visit therapists. That advantage is tapering off.
What’s changing:
- From 2028, electric and hybrid vehicles will face a new per-mile road levy.
- This is on top of VED and any other road taxes.
- Fuel duty on petrol and diesel remains frozen until September 2026 — after which staged increases are expected.
Implications for mobile therapists:
- Budget for rising travel costs from 2028, whether EV or petrol/diesel.
- Review your travel fees and minimum call-out pricing.
- Cluster home visits geographically and improve route planning to maintain profitability.
Minimum Wage AND Real Living Wage Increase
Budget announcements confirmed continued upward pressure on wages — but this year there’s another layer:
Real Living Wage changes
Employers paying the Real Living Wage (not to be confused with the statutory minimum) must raise pay to:
- £13.45/hour outside London (up 85p)
- £14.80/hour in London (up 95p)
This matters because many clinic owners voluntarily use the Real Living Wage as a recruitment or retention tool.
National Living Wage (statutory minimum)
Still rising — pulling the bottom of your pay structure upward by over 4% and compressing layers above it.
Apprenticeships: A New Opportunity
SMEs will now have apprenticeships for eligible under-25s fully funded. This could meaningfully expand:
- Rehab/physio assistant pipelines
- Veterinary nursing apprenticeships
- Administrative apprenticeships
- Support roles within multidisciplinary clinics
Clinics struggling to hire may find this a cost-effective, long-term workforce strategy.
What this means for owners
- You may need to restructure your entire pay ladder.
- Retention pressures will increase, not decrease.
- Budget for higher wage costs over the next 18–24 months — beyond inflation.
Self-employed therapists
Use the new NLW and RLW rates as baseline benchmarks for valuing your own time — especially after tax and expenses.
Business Rates Relief, But Not for Everyone
The Budget introduces permanently lower business rates for thousands of retail, leisure and hospitality businesses by placing higher taxes on properties with rateable values above £500,000.
A £4.3 billion support package will help businesses hit hardest by revaluations in April 2026.
What it means for clinics
- Most physio and vet clinics are classified as healthcare, not retail/hospitality — so many won’t directly benefit.
- If your clinic operates from the high-street or inside a mixed-use building, wellness centre, or occupies space classified under leisure, you may see benefits.
- Larger clinics with higher rateable values could face higher property taxes.
Our practice RV has taken us beyond any business rate relief scheme and we’re praying for some of the chunk of that £4.3b to offset the rises.
Check your property’s classification early — revaluations in 2026 could bring unwelcome surprises.
Falling Bills = A Small Boost to Client Spending Power
Millions of households will see £150 per year off energy bills due to levy changes and rebates.
This is modest relief, but it matters:
- Low-income households gain a bit more spending headroom.
- Older adults — a key demographic for many physio clinics — benefit from stabilised bills and rising pensions.
- Pet owners feeling less cost pressure may delay fewer routine appointments.
It won’t create a surge in demand, but it reduces financial anxiety at the margins.
Savers Nudged Toward More Risk
From April 2027, the cash ISA allowance for under-65s drops from £20,000 to £12,000.
Impact:
- High savers are pushed into riskier investment ISAs if they want to use the full tax allowance.
- Those stockpiling cash (including clinic profits they extract personally) lose flexibility.
- This combines with rising dividend and savings taxes to discourage traditional low-risk saving.
Not financial advice — but clinic owners will need to rethink personal wealth planning.
No More Cheap Imports
Currently, imported goods valued under £135 are exempt from Customs Duty. By March 2029, this exemption will end.
Expect:
- Higher prices on consumables imported from Temu, AliExpress, Amazon global sellers, and many cheap clinic supplies.
- Longer or more complex customs processes.
- Higher overall materials costs for small clinics.
If you rely on low-cost imported consumables, build this into long-term cost forecasts.
Corporation Tax & Allowances
The main rate of corporation tax stays at 25%, which is good news for clinics hoping to avoid another rise.
However:
- The writing down allowance has been reduced.
- This means it will take longer to deduct the cost of equipment and machinery from taxable profits.
- Cash flow planning becomes more important — particularly for vets investing in imaging, lab, or surgical equipment.
Employee Ownership Trusts (EOTs): New Considerations
CGT relief for selling a business to an Employee Ownership Trust drops from 100% to 50% from November 26, 2025.
For clinics considering succession planning or selling to an EOT:
- The tax advantage is still significant but less generous.
- You will need to weigh the reduced benefit against other exit strategies.
This is particularly relevant to multi-partner vet clinics.
Support for Low-Income Client Groups
The State Pension rises 4.8% from April 2026. Universal Credit rises at inflation.
For clinics that serve:
- Pensioners
- Low-income families
- Long-term condition patients
…this provides some stability in demand — though it won’t outweigh other pressures on working households.
What It All Means: A Realistic Forecast for Clinics in 2025–2029
Costs are rising
- Staff wages (statutory, Real Living Wage, retention pressures)
- Travel and motoring (medium-term)
- Consumables (customs changes)
- Reduced tax relief on equipment (writing down allowance)
- Increased personal tax burdens
- Fewer tax-efficient saving options (pensions & ISAs)
Client spending is mixed
- Older adults and low-income families may become slightly more resilient
- Middle-income households face the greatest squeeze from stealth taxes
- Consumption remains cautious overall
Workforce stability will be harder
- Wage pressure from NLW and Real Living Wage
- Competition for flexible working
- Apprenticeship opportunities help — but long-term
Clinic owners need sharper financial management
- Twice-yearly price reviews
- Pay ladder redesign
- More robust travel pricing
- Cash flow and tax planning
- Rethinking director remuneration structures
How Clinics Can Respond — Practical Strategies
1. Regular pricing reviews
Do not silently absorb inflation. Build price reviews into your annual rhythm at least twice a year.
2. Redesign your pay ladder
Protect morale and retention by adjusting pay bands relative to both NLW and the Real Living Wage.
3. Embrace workforce flexibility
Flexible rotas, compressed hours, school-day shifts, and apprenticeships will be major competitive advantages.
4. Rethink director pay and personal finances
Balance salary, dividends, pensions and ISAs in light of upcoming tax changes.
5. For mobile therapists: travel efficiency is now a business model
Cluster visits, introduce minimum call-out fees, and model EV vs petrol costs over a five-year horizon.
6. Review equipment investment cycles
With reduced writing-down allowances, equipment purchases need more careful planning and cash flow forecasting.
This Budget doesn’t offer sweeping reforms or game-changing support for small clinical businesses. Instead, it delivers a collection of smaller, compounding changes that will meaningfully reshape the financial landscape.
For physio, rehabilitation and veterinary clinics — especially those running mobile or multi-site models — the message is clear:
Plan proactively, price confidently, and prioritise financial resilience.
Clinics that adapt early will be in the strongest position as these policies phase in.
