Autumn Budget 2025

On 26 November the Chancellor of the Exchequer delivered her Autumn Statement. Here is a brief summary of the headline announcements affecting tax.

Income tax and National Insurance

–The current personal tax thresholds will be continue to be frozen until 2031.

–From April 2029, the Government will charge employee and employer National Insurance on any pension contributions made via salary sacrifice above £2,000 a year.

–From April 2026, there will be a two percentage point increase to the basic and higher rates of tax on dividends, raising them to 10.75% and 35.75% respectively.

–From April 2027, there will be a two percentage point increase to the basic, higher and additional rates of saving income tax, increasing them to 22%, 42% and 47% respectively.

–From April 2027, there will be a two percentage point increase to the basic, higher and additional rates of property income tax, increasing them to 22%, 42% and 47% respectively.

Corporation tax

–The Government will reduce the writing down allowance main rate from 18% to 14% from April 2026, and on special rate expenditure from 6% to 3%, alongside a new 40% first-year allowance from January 2026.

Capital gains tax

–The capital gains tax relief on disposals to employee ownership trusts will be reduced from 100% to 50% from November 2025.

Inheritance Tax

–It has been confirmed that the £1 million allowance for APR and BPR relief will be transferable between spouses and civil partners

Excise duties

–From 2028, the Government will introduce a new mileage-based charge on battery electric and plug-in hybrid cars at around half the fuel duty rate paid by drivers of petrol cars.

–From April 2026 there will be an increase in remote gaming duty from 21% to 40% and the bingo duty will be abolished.

–From April 2027, a new rate of general betting duty for remote betting will be introduced at 25%, excluding self-service betting terminals, spread betting, pool bets and horseracing.

–The Government will implement a further five-month freeze to fuel duty rates until September 2026 at which point the five pence cut first introduced in 2022 will be reversed through a staggered approach. The planned inflation increase for 2026–27 has been cancelled. From April 2027, fuel duty rates will then be uprated annually by RPI.

Other commitments – the Government has also committed to:

–the introduction of a new high value council tax surcharge. From April 2028, owners of properties identified as being valued at over £2m by the Valuation Office (in 2026 prices) will be liable for a recurring annual charge which will be additional to existing council tax liability; and

–the removal of the two-child universal credit limit (benefit cap) in full from April 2026.

–increasing the National Living Wage and the State Pension in line with the September 2025 inflation figure of 3.8%. The Minimum Wage for those over the age of 21 will also increase by 50p to £12.71/hr and for those aged 18 – 20, by 85p up to £10.85/hr.  Those aged 16 – 17, or on apprentice schemes, will see an increase of up to £8/hr from £7.55.