The 2025 Budget Review
Autumn Budget 2025: losers and losers?
In order to meet her fiscal rules, without technically breaking manifesto pledges, the Chancellor has introduced a raft of changes to the tax system. There are so many changes that you're bound to be affected.
First, the bad news. The income tax rates that apply to property, savings, and dividend income are going up by 2% across all bands (except the additional dividend rate). Dividends will be affected from April 2026, with the hike in property and savings tax rates coming a year later.
The cash ISA allowance will be cut to £12,000 as rumoured, but the full £20,000 will still be available by ringfencing £8,000 for stocks and shares,
Pensions were thankfully largely left alone. However, the maximum amount that can escape NI charges via salary sacrifice is to be capped at £2,000 from 2029.
Drivers of electric vehicles and hybrids are to be slapped with a “per-mile” levy: 3p for wholly-electric vehicles and 1.5p for hybrids.
Those are the highlights, but as ever there is much more that didn’t make it into the speech.
You can download our Budget Review HERE for a ‘deep dive’ analysis but here are some headlines.
Stealth taxes
The majority of thresholds will be frozen for a further three years, to 6 April 2031. This includes personal income tax and equivalent national insurance thresholds.
Capital allowances
The main rate writing-down allowance will be reduced from 18% to 14% from April 2026 and a new 40% first-year allowance will be introduced from 1 January 2026.
Dividends
In a blow to owner-managers, dividend tax rates for basic and higher rate taxpayers will increase by 2% from 6 April 2026.
Property income and savings income
Tax on savings income will increase by 2% points across all bands from April 2027.
The government is creating separate tax rates for property income. From April 2027, tax on property income will also increase by 2%.
Employees
The value of salary sacrificed pension contributions that can receive employee and employer NICs relief will, from April 2029, be capped at £2,000 per year.
Cars
A new mileage supplement for electric and plug-in hybrid cars will be introduced from 1 April 2028.
State pensioners
Pensioners whose sole income is the basic or new state pension will not be required to pay tax via simple assessment if their state pension exceeds the personal allowance from 6 April 2027.
Mansion tax
A council tax surcharge will be introduced on owners of residential properties valued over £2 million in England from 1 April 2028, based on the 2026 values.
Miscellaneous
The government will extend the temporary 5p fuel duty cut for a further five months, with the cut being reversed in three stages: 1p on 1 September 2026, 2p on 1 December 2026 and 2p on 1 March 2027.
Corporation tax late filing penalties will be doubled from 1 April 2026.
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