Autumn Budget: Key changes for business owners

November 2025

Income Tax Thresholds Frozen until 2031

The current personal tax thresholds will be frozen for a further 3 years from 2028 to 2031.
This increases fiscal drag, meaning that more employees and directors will gradually be pulled into higher tax bands over time, especially as wages rise with inflation.
The rate of VAT and NI also remained unchanged.

Tax on Dividends: From April 2026, tax on income from dividends is rising by 2%, increasing the basic and higher rates of dividend tax to 10.75% and 35.75% respectively. The additional rate will remain at 39.35%
Tax on Savings Income: From April 2027, there will be a 2% increase to the basic, higher and additional rates of saving income tax, increasing them to 22%, 42% and 47% respectively
Property Income Tax: From April 2027, there will be a 2% increase to the basic, higher and additional rates of property income tax, increasing them to 22%, 42% and 47% respectively. Finance cost relief will be at the basic rate of 22%.

From 1 April 2026, the National Living Wage will increase by 4.1% to £12.71 per hour.
The National Minimum wage for 18-20 year old will rise by 8.5% to £10.85 per hour.
For 16-17 year olds and apprentices, it will rise by 6.0% to £8.00 per hour.
These changes will add pressure to wage bills, especially for businesses in sectors with large or junior workforces.

Salary Sacrifice: From April 2029, salary sacrificed pension contributions above an annual £2,000 threshold will no longer be exempt from NI. Any pensions contributions made via salary sacrifice above this threshold will be subject to both employee and employer National Insurance.
Other Pensions: No change to the 25% tax-free lump sum or relief for contributions.

The main rate of Corporation Tax remains unchanged.
However, from April 2026, the Government will reduce the writing down allowance main rate from 18% to 14%.
From January 2026, a new 40% first-year allowance will apply to main-rate assets that don’t qualify for full expensing (excluding cars and second-hand assets). Full expensing itself continues unchanged.
In addition, 1 April 2026, the penalty for a submitting a Corporation Tax return late will double – this change will be legislated for in the Finance Bill 2025-26.

Mileage based Electric Vehicle Tax: A road use style levy will apply to electric and hybrid vehicles: 3p per mile for EVs and 1.5p per mile for hybrids from April 2028. This charge will rise with inflation.
Capital Allowances: The government will extend the 100% first year allowances for qualifying expenditure on zero emission cars, and qualifying plant or machinery for EV chargepoints for a further year. These reliefs will now run until 31 March 2027 for Corporation Tax purposes and 5 April 2027 for Income Tax purposes.

Cash ISA: From 6 April 2027, the annual Cash ISA limit will be reduced to £12,000, within an overall ISA limit of £20,000. Savers over 65 will be excluded and can continue to save up to £20,000 in a Cash ISA.
Mansion Tax: Owners of high value residential properties will face a new annual council tax surcharge from April 2028, ranging from £2,500 for homes values between £2-2.5m up to £7,500 for properties over £5m.
Capital Gains Tax Relief: The capital gains tax relief which company owners receive when they sell their shares to employee ownership trusts will be reduced from 100% to 50% from November 2025.
Home Office: Tax relief for people working from home (e.g. ability to claim money back for domestic expenses) will end on 6 April 2026 unless it is paid for by the employer.