Autumn Budget 2025

After months of anticipation- and, thanks to this morning’s OBR leak, rather less anticipation than the Chancellor might have hoped- the “long-awaited” Autumn Budget arrived as a further tax raid on working people, the wealthy and, to a lesser degree, businesses.

Relentless speculation: on wealth taxes, mansion taxes and every other fiscal twist, has paralysed some markets over measures that may never materialise. All before we factor in the post-announcement U-turns and the internal squabbles. A strong case for tighter controls over communications, to create a more stable environment for decision making.

Sterling and Gilts ticked higher on Reeves’ plan to boost her fiscal headroom from £9.9bn to £21.7bn by the end of the forecast period. Yet, the squeeze of such fiscal expansionism offers little to spark growth, investment or inspiration- leaning on Britain’s glorious past for just a little longer.

As ever, we have distilled the key measures that could affect your business and personal finances. We’ll be here to help you navigate the fine print and any implications these changes may bring.

The highlights are as follows:

Personal tax

• Income Tax & NI Thresholds: Freeze extended for three additional years beyond 2028. From April 2031, thresholds will (in theory) rise in line with inflation.
• ISAs: From April 2027, under-65s can place up to £12,000 per year in cash ISAs, with the remainder of the £20,000 annual allowance reserved for investments.
• Dividend Tax: Ordinary and upper rates increase by 2 percentage points from April 2026, to 10.75% and 35.75% respectively. There is no obvious uniform strategy of profit extraction for business owners and bespoke advice should be taken.
• Savings Income: All rates rise by 2 percentage points from April 2027.

Business

• Employer NI Thresholds: Frozen until 2031, increasing costs as wages rise.
• Small Package Exemption: Tax exemption for overseas parcels under £135 scrapped from 2029.
• Remote Gaming Duty: Rises from 21% to 40% from April 2026.
• General Betting Duty: Online sports betting duty rises from 15% to 25% from April 2027 (horse racing exempt).

UK Property

• Council Tax Surcharge: From April 2028, properties pin England worth over £2m face an annual surcharge of £2,500–£7,500, following revaluation of bands F–H.
• Rental Income Tax: Income tax on rental income rises by 2 percentage points from April 2027, to 22%, 42% and 47%, further strengthening the motivation to incorporate portfolios.
• Transparency: Real estate income will form part of an international exchange of information programme to increase transparency and reduce tax evasion.

Employment

• Universal Credit Cap: Limit on payments for third or subsequent children scrapped from April 2026.
• Minimum Wage: Over-21s rise 4.1% to £12.71/hour in April 2026; 18–20-year-olds rise to £10.85/hour.
• State Pension: Basic and new state pensions increase by 4.8% from April 2026 under the triple lock.
• Salary Sacrifice: NI-free pension contributions capped at £2,000/year from 2029.

Transport

• Fuel Duty: 5p “temporary” cut extended until September 2026, then phased out over six months.
• EV Tax: Mileage-based tax for electric and plug-in hybrids introduced from 2028. These additional costs may make the purchase of EVs through salary sacrifice schemes even more attractive.
• Rail Fares: Regulated fares frozen next year, for the first time since 1996.

Other matters

• Sugary Drinks Tax: Extended to pre-packaged milkshakes and lattes from 2028.
• Tobacco Duty: Increases by 2% above RPI.
• Tourist Tax: English regional mayors gain powers to tax overnight stays, echoing Scotland and Wales.
• University Levy: Overseas tuition income taxed at £925 per student per year from August 2028.

Visit our Budget Highlights and tax data for a summary of the Autumn Budget 2025.

Contact Mouktaris & Co Chartered Accountants for expert advice or click here to subscribe to our Newsletter.