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The Chancellor, Rachel Reeves, presented her Autumn Budget Statement on Wednesday 26 November.
There were a number of tax related announcements in the Budget, including:
1. Income Tax thresholds
The tax-free Personal Allowance (of £12,570) and higher rate threshold (of £50,270) will remain unchanged for three more years (from April 2028 to April 2031).
The additional rate threshold will remain at £125,140 to April 2031.
2. Dividend tax rate
From 6 April 2026, dividend tax rates will rise by 2 percentage points to:
- 10.75% (basic rate)
- 35.75% (higher rate)
The additional rate will remain unchanged at 39.35%.
3. Savings and Property Income
From 6 April 2027, the rate of income tax on savings income and property income will increase by 2 percentage points to:
• 22% (basic rate)
• 42% (higher rate)
• 47% (additional rate)
4. Inheritance Tax
The Inheritance Tax Nil-Rate Band will remain at £325,000 for three more years (to April 2031).
The forthcoming £1 million allowance for Agricultural Property Relief and Business Property Relief will remain at this level for a further year (to April 2031).
5. National Insurance Contributions (NICs)
The NIC thresholds for employees, employers, and the self-employed will be maintained for three more years (to April 2031).
6. National Living Wage & National Minimum Wage Increases
From 1 April 2026, the National Living Wage will increase by 4.1% to £12.71 per hour. The National Minimum Wage for 18-20 year olds will increase by 8.5% to £10.85 per hour, and for 16-17 year olds and apprentices by 6.0% to £8.00 per hour.
7. Capital Allowances
From 1 January 2026, a new 40% first year allowance will be introduced for main rate expenditure (including most expenditure on assets for leasing and expenditure by unincorporated businesses). 100% first year allowance and Annual Investment Allowance will continue to be available for eligible expenditure and taxpayers.
From April 2026, the main rate of writing-down allowances will reduce from 18% to 14%.
8. Employee Ownership Trusts (EOTs)
The Capital Gains Tax relief available on qualifying disposals to EOTs will reduce from 100% of the gain to 50%. Business Asset Disposal Relief will not be available on the chargeable gain.
9. Salary Sacrifice for Pension Contributions
From 6 April 2029, employer and employee NICs will be charged on pension contributions above £2,000 per annum made via salary sacrifice.
10. High Value Council Tax Surcharge
From April 2028, a new surcharge will be levied on owners of residential property in England worth £2 million or more.
11. Electric Vehicle Excise Duty (eVED)
From April 2028, drivers of electric and plug-in hybrid cars will pay a new mileage-based charge (eVED) alongside their existing VED.
12. Fuel Duty
The 5p cut in rates will be extended to 31 August 2026.
13. Universal Credit Child Element
From April 2026, the two-child limit will be removed.
14. Winter Fuel Payments
The £35,000 threshold will be maintained for this Parliament.
15. Gambling Duties
Remote Gaming Duty will increase from 21% to 40%, from 1 April 2026. A new Remote Betting Duty will be introduced at 25% from 1 April 2027 within General Betting Duty.
Bingo Duty will be abolished from 1 April 2026.
More to Come from Shorts
The tax team at Shorts is carefully analysing the Autumn Budget, and we will soon be publishing our detailed reaction to the Chancellor’s speech. This will include all major tax announcements, as well as commentary and insights on what they might mean for our clients.
Craig Walker
I am Chartered Tax Adviser and am a full member of the Society of Trust & Estate Practitioners (STEP). As a Tax Partner, I advise clients on all aspects of tax but I have a particular focus on private client matters.
View my articlesTags: Autumn Budget 2025
