Date: 26 November 2025
The Chancellor has delivered the Autumn Budget 2025, positioning it as a plan for “Strong Foundations” and a “Secure Future”. While the headline rates of Income Tax, VAT, and National Insurance remain frozen, this is a Budget of significant structural change.
The government is broadening the tax base, particularly targeting wealth, assets, and specific business reliefs. For families, business owners, and investors, the landscape is shifting. Here is our summary of the key measures and what they mean for you.
Individuals & Families: Wealth and Assets in the Spotlight
The most headline-grabbing changes concern how wealth is taxed and passed on.
Inheritance Tax (IHT) on Pensions: In a major shift, unspent pension pots will be brought into the scope of Inheritance Tax from 6 April 2027. This removes a key vehicle for tax-efficient wealth transfer that many families have relied on.
Fiscal Drag Extended: Personal tax thresholds and National Insurance thresholds will remain frozen at their current levels for an additional three years, until April 2031. As wages rise, this will drag more people into higher tax bands.
New Property Tax Rates: From April 2027, a separate tax regime for property income will be introduced. The rates will be 22% (basic), 42% (higher), and 47% (additional).
Tax on Dividends and Savings: To narrow the gap between earned income and investment income:
Dividend Tax: Rates will increase by 2 percentage points from April 2026.
Savings Income: Tax rates will increase by 2 percentage points across all bands from April 2027.
High Value Property: A new High Value Council Tax Surcharge will apply to residential properties in England worth over £2 million from April 2028.
2. Business Owners: A New Landscape for Investment and Exits
For business owners, the focus is on “productive” investment, with some generous reliefs being curtailed.
Employee Ownership Trusts (EOTs) Restricted: Effective immediately (from 26 November 2025), the Capital Gains Tax (CGT) relief on disposals to EOTs is reduced from 100% to 50%. This significantly increases the tax cost of this popular exit route.
Business Asset Disposal Relief (BADR): The CGT rate for BADR (formerly Entrepreneurs’ Relief) will increase to 18% from 6 April 2026, matching the main lower rate of CGT.
Corporation Tax & Capital Allowances:
- The main rate of Corporation Tax remains at 25%.
- However, the main rate Writing Down Allowance (WDA) is reduced from 18% to 14% from April 2026.
- To encourage immediate investment, a new 40% First Year Allowance for main-rate assets is introduced from 1 January 2026.
3. Employers & Employees: Payroll Changes
Salary Sacrifice Cap: From April 2029, National Insurance relief on salary sacrifice contributions into pension schemes will be capped at £2,000 per employee per year. Contributions above this will attract employer NICs, which will impact high earners and generous company schemes.
National Living Wage: The National Living Wage will increase by 4.1% to £12.71 per hour from April 2026.
4. Motoring & Other Taxes
Fuel Duty: The 5p cut has been extended to August 2026, but it will then be tapered out, returning to March 2022 levels by March 2027.
Electric Vehicles (eVED): A new “per-mile levy” for electric vehicles will be introduced from April 2028 to ensure all motorists contribute to road upkeep.
Private School Fees: The government confirmed that VAT will apply to private school fees, a measure previously announced to fund state education priorities.
Summary of Key Dates
| Measure | Effective Date |
| EOT Relief Restriction (50%) | 26 November 2025 (Immediate) |
| New 40% First Year Allowance | 1 January 2026 |
| Dividend Tax Increase (+2%) | April 2026 |
| BADR Rate Increase (to 18%) | April 2026 |
| Property Tax Reform | April 2027 |
| IHT on Unspent Pensions | April 2027 |
| Salary Sacrifice Cap | April 2029 |
What Should You Do Now?
This Budget introduces complex changes that reward proactive planning. Whether you are a business owner considering an exit, a landlord reviewing your portfolio structure, or looking to protect your family’s wealth, now is the time to review your strategy.
Contact us today to discuss how Budget 2025 affects your personal and business finances.