Autumn Budget 2025 Breakdown
The Chancellor, Rachel Reeves, delivered the Autumn Budget on 26 November 2025, outlining tax increases worth up to £26 billion alongside a series of measures aimed at supporting households and modernising the tax system.
Personal Tax Changes
The government will freeze Income Tax thresholds until April 2031, bringing more people into higher tax bands as incomes rise. Taxes on property income, savings, and dividends will increase from 2026-2028, with new higher tax rates on property income beginning in 2027/28. ISA rules will also change, with a reduced cash ISA limit for under-65s from 2027.
Employment & National Insurance
Both employees and employers will see adjustments to National Insurance. From 2029, only the first £2,000 of pension salary sacrifice contributions will be exempt from NICs. The National Living Wage will rise to £12.71 from April 2026, and company car and van benefit charges will increase. New rules will also crack down on non-compliant umbrella company arrangements and tighten reporting requirements for benefits via payroll.
Business Tax Measures
The Corporation Tax main rate will remain at 25%, with late-filing penalties doubling from April 2026. Generous capital allowance schemes continue, including full expensing for new plant and machinery. A new 40% first-year allowance will apply from 2026 to most main-rate assets. Significant reforms will expand the limits for the Enterprise Investment Scheme (EIS), Venture Capital Trusts (VCTs) and Enterprise Management Incentives (EMI).
Capital Gains & Inheritance Tax
Capital Gains Tax rates and allowances remain unchanged, but reliefs are tightening. From November 2025, transfers to Employee Ownership Trusts will qualify for only 50% relief. Inheritance Tax thresholds stay frozen until 2031, and from 2027, unused pension funds will form part of an individual’s taxable estate - potentially increasing IHT bills.
Other Key Announcements
The VAT registration threshold stays frozen at £90,000.
Making Tax Digital will expand gradually from 2026 for self-employed individuals and landlords with incomes above £20,000.
A new High Value Council Tax Surcharge will apply from April 2028 to properties valued over £2 million.
From 2028, electric vehicles will be subject to a new mileage-based tax (eVED), expected to cost the average EV driver around £240 a year.