IoD asks Chancellor for five Budget changes, from tax to AI

The Institute of Directors has published its submission for the Autumn Budget, with five asks for the Chancellor.

They are: a competitive and predictable tax environment; steps to soften the employment and investment effects of the Employment Rights Act; devolution sequenced to support productivity; protection for economically productive infrastructure; and faster, responsible adoption of AI across the business population.

On tax, the IoD wants the existing corporate tax roadmap widened into a long-term framework covering the whole business tax system. The Treasury published that roadmap in October 2024, committing to cap the headline rate of corporation tax at 25 per cent for the duration of the parliament.

The argument is that firms and investors cannot plan when only one tax has a published direction of travel. The IoD is also asking for no further increases to the overall tax burden on businesses, investors and employment.

The employment ask is narrower and more immediate. The IoD wants ministers to use the implementation process for the Employment Rights Act to cut hiring risk, particularly for smaller firms and those offering entry-level roles.

Its named targets are trade union access provisions, guaranteed-hours rules, shift notification requirements and unfair dismissal reforms, plus more resources for Acas and employment tribunals. For a company that hires a handful of people a year, those four rules are the ones that decide whether an offer gets made.

On devolution, the IoD says powers should move only where there is institutional capacity, stable funding and accountability. It wants a cross-government Devolution Data and Statistics Delivery Plan and a shared performance dashboard.

On infrastructure, it asks the government to protect high-productivity investment and keep moving towards a third runway at Heathrow. Major programmes, it says, need clear milestones, accountable leadership and transparent measures of success.

The AI ask is the one a small company could use directly. The IoD wants existing AI and digital-adoption schemes folded into a single national offer for SMEs through the Business Growth Service, plus a new "Responsible AI Essentials" programme for smaller firms.

The IoD's case is that the UK has grown respectably but invests too little, and that confidence has been subdued since 2024 amid uncertainty over tax, rising employment costs and doubts about policy delivery.

Anna Leach, the IoD's chief economist, framed the test as whether the Budget moves companies from postponing investment to pursuing growth.

None of this is government policy. It is a lobby group's wish list, and the Budget will decide how much of it survives.

For a founder, the practical reading is that the employment rules are the live variable. Tax rates are capped for the parliament; the Employment Rights Act implementation is still being written, and that is where the cost of the next hire gets set.