Budget
News - Budget
26 November 2025
The chancellor, Rachel Reeves, has delivered her Autumn budget, it marks a significant fiscal reset. The government has opted not to raise headline income-tax or VAT rates, but instead is pursuing a broad mix of tax-base changes, asset/investment taxes, and targeted support. Shifting burdens subtly, but broadly, across the economy.
Tax-free allowances (income tax & employer NIC thresholds) will stay frozen for three more years, starting 2028–29. This means many more people could gradually be pulled into higher tax bands as wages and prices rise.
Student-loan repayment thresholds will also stay unchanged for at least another three years, increasing the likelihood of borrowers repaying sooner, or paying more, than under rising threshold scenarios.
Pension rules tightened on salary-sacrifice contributions from April 2029, pension contributions made via salary sacrifice will only remain exempt from National Insurance up to £2,000 annually; anything above that will be taxed like normal salary.
Higher taxes on property, dividends and savings income the rates on dividend income, property income and savings returns will go up by 2 percentage points, increasing the tax burden for investors and property owners.
Corporation-tax treatment changes businesses face reduced writing-down allowances, cutting the tax relief on capital investments.
New charges for electric and hybrid vehicles from 2028, owners of battery-electric cars and plug-in hybrids will pay a mileage-based charge on top of existing vehicle taxes — Payable each year alongside vehicle excise duty at 3p per mile for electric cards and 1.5p for plug-in hybrids.
Gambling taxes set to increase sharply:
Remote-gaming duty will rise from 21% to 40% in April 2026.
Online betting duty will rise from 15% to 25% starting April 2027.
Reduced relief on disposals to employee-ownership trusts Capital gains tax reliefs tied to transferring company shares to employee-owned trusts will now be scaled back. This will affect business owners and entrepreneurs looking to exit via employee ownership.
’Mansion tax’ — council-tax surcharge on high-value properties from 2028, homes valued over £2 million will face a new surcharge of £2,500 per year, rising to £7,500 for homes valued over £5 million.
Fuel duty freeze — but only temporarily Fuel duty stays frozen for another five months, giving motorists short-term relief, but staged increases are expected from 2026.
Cash ISA allowances restructured: For most people, the full £20,000 ISA allowance will be retained — but only £12,000 may be used for cash ISAs, £8,000 will be designated exclusively for investment purposes; for over-65s, the full cash-ISA allowance remains intact.
Inheritance-Tax relief for infected-blood-scheme payments All payments under the infected-blood compensation scheme will be exempt from Inheritance Tax.
Welfare and social changes: The two-child benefit cap will be abolished. A major change likely to benefit many families, reversing a policy widely criticised for increasing child poverty.
Class 2 National Insurance (self-employed) update The voluntary Class 2 NIC rate will rise slightly for 2025/26 — from £3.45 per week to £3.50 per week.
The Budget trades headline tax-rate increases for more subtle, but wide-ranging, fiscal measures. It aims to raise revenue from property, assets, investments, and wealth, while protecting the poorest and cushioning everyday costs for many. For individuals and businesses alike, this makes now a very good time to revisit financial plans — from property portfolios and pension strategies to household budgets and investment allocations.
Whether you’re a homeowner, employee, saver, pension-planner or investor now is a good time to revisit your finances: consider the impact of threshold freezes, new surcharges and increased tax rates, and how this might affect your take-home pay, investments, pension contributions, and long-term planning.
Contact us if you’d like to discuss any of the points mentioned in the budget and how it impacts you and your business.
