Autumn Budget 2025: At a glance

After months of speculation, the Chancellor has set out the government’s tax and spending plans, aiming to balance its growth agenda with concerns about the cost of living.

Her statement says she’s taking “fair and necessary choices to deliver on our promise of change.” The key tax announcements for individuals and businesses are summarised below.

Individuals

Income tax and National Insurance

• The income tax personal allowance, higher-rate threshold and additional-rate thresholds of £12,570, £50,270 and £125,140 respectively, and the equivalent National Insurance Contribution (NIC) thresholds, are being frozen for an extra three years until 5 April 2031.
• The NICs secondary threshold of £5,000 is being frozen for an extra three years until 5 April 2031.
• Salary-sacrificed pension contributions above an annual £2,000 threshold will be chargeable to employer and employee NICs from 6 April 2029.
• Tax relief for non-reimbursed homeworking expenses will be removed from 6 April 2026.
• The rate of tax on dividend income will increase from 8.75% to 10.75% for basic rate taxpayers and from 33.75% to 35.75% for higher rate taxpayers from 6 April 2026.
• The basic, higher, and additional rates on savings and property income will increase by two percentage points (to 22%, 42%, and 47% respectively) from 6 April 2027.
• Voluntary Class 2 NICs to be abolished for individuals living abroad.
• The dividend tax credit for non-UK residents will be abolished from 6 April 2026.
• Image rights payments related to employment are to be treated as taxable employment income, subject to income tax and employer and employee NICs with effect from 6 April 2027.
• The post departure trade profits provisions in the temporary non-residence anti-avoidance legislation will be removed from 6 April 2026.
• The rate of income tax relief on Venture Capital Trust (VCT) investments will reduce to 20% from 6 April 2026.

Capital gains tax

• Capital gains tax (CGT) relief on qualifying disposals to employee ownership trusts (EOTs) is reduced from 100% to 50% from 26 November 2025.
• Incorporation relief will need to be actively claimed from 6 April 2026 onwards.
• Anti-avoidance rules for CGT and corporation tax on certain share exchanges and company reconstructions will be tightened from 26 November 2025.

Inheritance tax

• The inheritance nil-rate band of £325,000, the residence nil-rate band of £175,000, and the combined £1 million allowance for the 100% rate of agricultural property relief (APR) and business property relief (BPR) (being introduced from 6 April 2026) will be frozen for an extra year until 5 April 2031.
• The combined £1 million APR and BPR allowance will be transferable between spouses or civil partners.
• Inheritance tax relevant property trust charges will be capped at £5 million for historic trusts settled by former non‑domiciled individuals from 6 April 2025.

Other changes

• A new High Value Council Tax Surcharge (HVCTS) will apply to owners of domestic properties in England valued at £2 million or more, ranging from £2,500 to £7,500 per annum (uprated annually by the Consumer Price Index CPI) from 1 April 2028.
• The cash ISA allowance for people aged under 65 will reduce from £20,000 to £12,000 from April 2027, with the overall ISA allowance remaining at £20,000.
• New London Stock Exchange listings will be exempt from Stamp Duty Reserve Tax (SDRT) for three years.
• A new settlement opportunity will be established for people with outstanding loan charge liabilities.
• The scope of the higher rate of Air Passenger Duty will be extended to cover all private jets over 5.7 tonnes from 1 April 2027.

Businesses

• A new capital allowances 40% first-year allowance will be introduced from 1 January 2026.
• The main rate of capital allowance writing down allowance will reduce from 18% to 14% from 1 April 2026 for corporation tax and 6 April 2026 for income tax.
• The 100% first-year allowances for zero-emission cars and electric vehicle charge-points are being extended until 31 March 2027 for corporation tax and 5 April 2027 for income tax purposes.
• Shadow Advanced Corporation Tax (ACT) restrictions will be relaxed to abolish the limits on companies’ use of surplus ACT balances from 1 April 2026.
• The rules for transfer pricing, permanent establishment and Diverted Profits Tax will be simplified for chargeable periods beginning on or after 1 January 2026.
• Multinationals in-scope of transfer pricing will be required to submit an International Controlled Transaction Schedule (ICTS) reporting cross-border related party transactions annually, for accounting periods beginning on or after 1 January 2027.
• Private hire vehicle services will be excluded from the scope of the Tour Operators’ Margin Scheme (TOMS) from 2 January 2026.
• The standard rate of VAT will apply to top-up payments on motor vehicle leases through qualifying schemes for disabled people from I July 2026.
• A new VAT relief will apply for business donations of goods to charity for distribution to those in need or use in the delivery of their charitable services from 1 April 2026.
• The Enterprise Management Incentive (EMI) scheme is to be expanded to include more businesses from 6 April 2026.
• The amount of money which can be raised by companies through EIS and VCT investments will increase from 6 April 2026.