Yesterday, Rachel Reeves, delivered her 2025 Autumn Budget in which she announced her ‘right choices’ for a fairer, stronger and more secure Britain.
Below are some of the main points:
Implemented immediately
- 100% CGT relief for disposals of shares to Employee Ownership Trusts is restricted to 50% from 26 November 2025
From April 2026
- Income tax thresholds and bands frozen (and continue to be frozen until April 2031)
- Income tax rates on dividend income rise from 8.75% to 10.75% (basic rate) and from 33.75% to 35.75% (higher rate); additional rate remains 39.35%
- The same increase will apply to corporation tax payable on loans to close company participators which are not repaid to the company within 9 months of its year end
- The basis for company car benefit charges increases by one percentage point for 2026/27
- Benefit charges for company vans and private fuel in company vehicles increased
- NIC Lower Earnings Limit and Small Profits Threshold increased by 3.8%
- Writing down allowances on main rate expenditure cut from 18% to 14%, and on special rate expenditure from 6% to 3%, from 1 April 2026 (companies) or 6 April 2026 (unincorporated trades)
- Extension until March 2027 of the 100% first year allowance for qualifying expenditure on zero-emission cars and charging points for electric vehicles
- CGT rate on disposals qualifying for Business Asset Disposal Relief increased from 14% to 18%
- IHT Agricultural Property Relief and Business Property Relief at 100% will only apply to the first £1 million of combined value; above that limit, the maximum relief will be 50%; the £1 million will be transferable between spouses and civil partners
- IHT Business Property Relief restricted to 50% for all ‘unlisted’ shares which are quoted on recognised stock exchanges such as the Alternative Investment Market
- The ‘two-child benefit cap’ for Universal Credit is removed, increasing the available benefits for claimants with more than two children
From April 2027
- Income tax rates on property and savings income rise from 20% to 22% (basic rate), from 40% to 42% (higher rate), and from 45% to 47% (additional rate)
- For under-65s, no more than £12,000 of the annual £20,000 ISA investment limit can be invested in a cash ISA; the other £8,000 will have to be in stocks and shares
No change, or later
- High Value Council Tax Surcharge to be introduced on properties worth more than £2 million (in 2026) to apply from April 2028: £2,500 for properties over £2 million rising to £7,500 for properties over £5 million
- New mileage based e-Vehicle Excise Duty payable on use of electric and hybrid cars from April 2028
- From April 2029, salary sacrifice schemes putting more than £2,000 into an employee’s pension will be charged to NIC as if cash salary was paid
Click the link below to find out more on what the budget means for you: