Earlier today, Rachel Reeves announced the 2025 Autumn Budget. We have detailed some of the key changes below:
Personal Tax
- Income tax and national insurance rates paid by employees will not change
- Income tax band thresholds will stay frozen until 2031
- Property income tax will increase by 2% from April 2027
- Savings income tax will increase by 2% from April 2027
- Dividend income tax will increase by 2% from April 2026
- Basic-rate: Current: 8.75% April 2026: 10.75%
- Higher-rate: Current: 33.75% April 2026: 35.75%
- Business Asset Disposal Relief (BADR) rate will increase to 18% as planned from April 2026
- Pension Salary-Sacrifice national insurance relief will be capped to £2,000/yr from 2029
- Capital Gains Tax relief on disposals to Employee Ownership Trusts (EOTs) will be reduced from 100% to 50%
Business Tax
- Employer National Insurance rates will remain unchanged.
- The earnings threshold for Employer National Insurance will remain unchanged
- The Employment Allowance will remain unchanged (£10,500 for 2025/26)
- Corporation tax rates will remain unchanged.
- First Year Allowances (FYA) of 40% will apply for main-rate assets from January 2026
- Writing-down Allowances (WDAs) for main-rate assets will be reduced from 18% down to 14% from April 2026
- The Annual Investment Allowance (AIA) will remain unchanged
- VAT rates and thresholds will remain unchanged
Minimum Wage
As of April 2026, the following minimum wage rises will take place:
- Over 21s: Current: £12.21 per hour. April 2026: £12.71 per hour
- 18 – 20: Current: £10 per hour. April 2026: £10.85 per hour
- 16 – 17 & Apprentices: Current: £7.55 per hour. April 2026: £8 per hour
Other Autumn Budget 2025 Key Points
- Properties worth more than £2m will face a £2,500 annual charge rising to £7,500 for properties worth more than £10m.
- The cash component of the ISA allowance for under‑65s is capped at £12,000, with the remaining £8,000 of the £20,000 total ISA allowance available for other investments.
- Cost of a single NHS prescription in England frozen at £9.90 for another year (they remain free in Wales, Scotland and Northern Ireland)
- Two child benefit cap will be abolished from April 2026
- Electric vehicle and hybrid car drivers will be taxed for using the road from 2028. 3p per mile for electric vehicles and 1.5p per mile for hybrid vehicles.
- The state pension in April 2026 will rise by 4.8% in line with average wages, which means:
- the new flat-rate state pension – for those who reached state pension age after April 2016 – will increase to £241.30 a week, or £12,547.60 a year, a rise of £574.60
- the old basic state pension – for those who reached state pension age before April 2016 – will go up to £184.90 a week, or £9,614.80 a year, a rise of £439.40
