Autumn Budget 2025
Key Changes and Benefits
Increased minimum Wages
The new budget raises minimum wages, helping you keep more of your earnings.
Increased Property tax rate
Individual rental income can now pay more tax for Property rent
Extended Dividend tax
Dividend receiver will need to pay more tax
The government has announced an extensive package of tax and regulatory reforms, with changes stretching from 2025 through to 2031. These measures will impact employees, employers, investors, property owners and international businesses. Below is an overview of the main announcements.
Employment, PAYE and National Insurance
Salary Sacrifice NIC Cap
From 6 April 2029, both employer and employee National Insurance contributions (NICs) will apply to salary-sacrificed pension contributions exceeding £2,000 per employee per year. Income tax relief on pension savings remains unchanged.
National Living Wage and Minimum Wage Increases
Effective 1 April 2026:
- National Living Wage increases by 4.1% to £12.71 per hour.
- Minimum wage for 18–20 year olds rises 8.5% to £10.85 per hour.
- Minimum wage for 16–17 year olds and apprentices rises 6.0% to £8.00 per hour.
NIC Thresholds
From April 2028 April 2031, the following thresholds will remain unchanged:
- Primary threshold/lower profits limit: £12,570
- Upper earnings/profits limit: £50,270
- Secondary threshold (employer NICs): £5,000
Taxation of Income, Dividends, Savings and Inheritance
Income Tax Thresholds
All income tax thresholds are frozen until 6 April 2031.
Property Income Tax
From 6 April 2027, property income will be taxed at:
- 22% basic rate
- 42% higher rate
- 47% additional rate
Dividend Tax Increase
From 6 April 2026:
- Basic and higher dividend rates increase by 2% to 10.75% and 35.75%.
- Additional rate remains 39.35%.
Savings Income
From 6 April 2027, savings rates increase by 2% to 22%, 42%, and 47%.
Reliefs and Allowances
From 6 April 2027, allowances will apply to property, savings and dividend income only after being applied to other income sources.
Inheritance Tax (IHT)
Key measures include:
- Thresholds frozen until April 2031.
- Anti-avoidance: UK agricultural property held by non-UK entities becomes UK situs from 6 April 2026.
- New exit-charge anti-avoidance rules for certain trust arrangements.
- Charity exemptions restricted to UK charities (lifetime gifts from 26 Nov 2025, death gifts from 6 April 2026).
- £5m cap on trust charges for certain excluded property trusts.
- Agricultural and Business Property Relief: £1m transferable allowance between spouses/civil partners.
- Technical amendments to non-dom changes from 2024.
VAT, Customs and Digitalisation
E-Invoicing Mandate
All VAT invoices must be issued electronically from April 2029.
VAT Grouping
Whole-entity cross-border VAT grouping will be restored from 26 November 2026.
VAT Relief for Charity Donations
From 1 April 2026, VAT relief applies to donated goods used or distributed by charities.
Customs Duty on Low-Value Imports
Duty relief on consignments valued ≤£135 will be abolished by March 2029.
Environmental and Transport Measures
Business Investment and Corporate Taxation
Share Exchanges & Reorganisations
From 26 November 2025, amended anti-avoidance rules will allow HMRC wide powers to make “just and reasonable” adjustments. The 5% ownership exemption will be repealed.
Employee Ownership Trusts
From 26 November 2025, CGT relief on disposals to EOTs reduces from 100% to 50%.
EMI Expansion for Scale-Ups
From 6 April 2026:
- Company limits up to 500 employees
- Asset limits increased to £120m
- Company share option limit increases to £6m
- Maximum holding period extended to 15 years
- EMI notification requirement removed from April 2027
VCT and EIS
From April 2026:
- Annual limit rises to £10m (£20m for KICs)
- Lifetime limit rises to £24m (£40m for KICs)
- Gross assets threshold increases
- Upfront VCT relief falls from 30% to 20%
Plant and Machinery
- Full expensing retained
- From 1 January 2026, a 40% first-year allowance applies for assets excluded from full expensing
- From 2026–27, writing-down allowance falls from 18% to 14%
Stamp Duty Reserve Tax (SDRT)
A three-year relief applies to transfers of securities after companies list on a UK regulated market.
Property and Wealth
High Value Council Tax Surcharge
From 1 April 2028:
- £2,500 per year for homes valued over £2m
- Rising to £7,500 for properties over £5m
- Charged to owners, not occupiers
ISA Reforms
From 6 April 2027, subscription limit for cash ISAs capped at £12,000 for under-65s. The overall ISA limit remains at £20,000.