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Please find below our summary of the Autumn Budget delivered by the Chancellor, Rachel Reeves, on Wednesday 26 November.
Income tax and other main tax rates remain essentially unchanged and frozen for longer, but the taxation of dividends, savings income and property income will rise over the next few years.
Among the wide range of measures were:
Personal Allowance and Tax Thresholds:
• The personal allowance and the existing income-tax thresholds remain fixed at their current cash values for a further three years to 2030/31.
Tax on Dividends:
• Tax rates on dividends will increase by 2% from 2026/27, except for the additional rate on dividends which will stay at 39.35%
Tax on Savings Income:
• Savings income rates will increase by 2% in 2027/28.
Tax on Property Income:
• Property income rates will also increase by 2% in England and Northern Ireland in 2027/28, however due to the devolution of property income tax rates in Scotland, we await the Scottish government delivering their budget on 13 January 2026 to find out how this will affect Scottish taxpayers.
Electric Vehicle Excise Duty:
• A new usage-based Electric Vehicle Excise Duty (eVED) will be introduced from April 2028 establishing a charge per mile for electric cars. Average EV drivers are expected to pay around £240 a year initially and plug-in hybrid cars will attract a reduced rate.
Changes to Pensions via Salary Sacrifice:
• From 6 April 2029, the amount that an employee may contribute to a pension through salary sacrifice without paying national insurance contributions (NICs) will be capped at £2,000 a year.
Changes to ISA’s:
• The individual savings account (ISA) subscription limit remains £20,000. But from April 2027, savers under age 65 must invest at least £8,000 of the annual ISA allowance in qualifying investments such as shares and authorised funds, rather than in cash.
As ever the Budget publications contained a wide range of detailed proposals and much to digest. Our Budget summary highlights the key aspects likely to affect you. If you have any questions about what you should do next, please get in touch.
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Our latest client newsletter is available for download.
It covers MTD for Income Tax, NIC Changes and more.
Download here
Please find below our summary of the Autumn Budget delivered by the Chancellor, Rachel Reeves, on Wednesday 30 October.
In presenting Labour’s widely anticipated first Budget in 14 years, the Chancellor was faced with a challenging task. Following her announcement of a “black hole” in the public finances, the need to renew the Treasury’s coffers while maintaining Labour’s manifesto promises seemed a tall order.
In the event Ms Reeves outlined a programme of around £41 billion worth of tax increases over the next five years, alongside plans to rebuild tottering infrastructure, the health service, schools and more. Any idea of a return to austerity was quashed, but how this will be achieved is very much in the detail.
Among the key headline items were:
- The main rate of class 1 employer national insurance contribution (NIC) will be increased from 13.8% to 15 from 6 April 2025%
- The secondary threshold at which employer NICs are payable will be reduced from £9,100 to £5,000.
- Main rates of capital gains tax increases with immediate effect to 18% for non and basic rate taxpayers and 24% for higher and additional rate taxpayers.
- Inheritance tax (IHT) business and agricultural reliefs will be capped at a total of £1 million from April 2026.
- Unused pension funds and death benefits will be included as part of an individual’s estate for IHT purposes from April 2027.
- The additional SDLT charge for second homes and buy-to-let properties (in England and Northern Ireland) increases from £5 to 5% from 31 October 2024
- VAT of 20% will be applied to private school and boarding fees from 1 January 2025, while the charitable relief for English business rates will be withdrawn from 1 April 2025.
- ISAs, Junior ISAs and Lifetime ISA limits will remain frozen until April 2030.
- Fuel duty rates for 2025/26 will remain frozen and alcohol rates on certain draught beers will be cut.
