Autumn Budget Analysis 2025

The Autumn Budget in 2025 was eagerly anticipated with numerous leaks and speculation in the run-up to the announcement on 26th November. Chancellor of the Exchequer Rachel Reeves presented the Budget to Parliament, and several key announcements were made outlining the Government's £26 billion tax rise.

Shaw & Co has reviewed the detail and considered the key announcements which could impact yourself and your business.

Tax Thresholds

Key thresholds for Income Tax and National Insurance have been frozen for a further three years from April 2028. This has been a topic of scrutiny with wages and other incomes rising over recent years, causing what commentators refer to as a “stealth tax”.

Tax Rates

It was announced that Income Tax rates for property income, savings income and dividend income will rise by 2 percentage points.

From April 2026, dividends at the Basic Rate will be 10.75%, 35.75% at the Higher Rate, and 39.35% at the Additional Rate.

From April 2027, property and savings income will be subject to Income Tax at 22% at the Basic Rate, 42% at the Higher Rate, and 47% at the Additional Rate.

The Starting Rate for savings remains unchanged at £5,000.

National Insurance

Thresholds for National Insurance are set to remain at their current levels. Voluntary Class 2 and Class 3 Contributions will see an increase of 3.8% from April 2026. However, the Chancellor announced the removal of voluntary Class 2 National Insurance Contributions for overseas workers.

Salary Sacrifice for Pensions

There is a cut pending from April 2029 to annual pension contributions under a salary sacrifice to £2,000 for National Insurance exemption. Contributions made above this level will therefore be subject to Employee and Employer’s National Insurance.

Minimum Wage

Minimum Wage increases have been set from April 2026:

Aged over 21 - 4.1% from £12.21 to £12.71 per hour.

Ages 18-20 - 8.5% from £10.00 to £10.85 per hour.

Aged 16 & 17 – 6% from £7.55 to £8.00 per hour.

Apprenticeships will also see an increase from £7.55 to £8.00 per hour for eligible people under 19 and over 19 for those in their first year of an apprenticeship.

ISAs are affected in the Autumn Budget

ISAs

From April 2027, the Annual ISA Allowance of £20,000 will be subject to change, with the Chancellor pushing for savers to invest and reduce cash pots.

Those under 65 will have a revised cash contribution allowance of £12,000, with the remaining £8,000 available for investment.

Those over 65 are excluded from the update and will be able to contribute their full annual allowance into a cash ISA.

Electric Vehicle Excise Duty

The Chancellor announced an extension to Government grants to 2030 for EVs. However, a new surcharge will be introduced from April 2028 on top of Vehicle Excise Duty. For full EVs this will be 3p per mile and 1.5p per mile for plug-in hybrids.

Inheritance Tax

Business Property Relief and Agricultural Property Relief were confirmed to become transferable to a spouse or partner from April 2026. Previously, those in line to be affected were subject to change following the Spring 2025 Budget, with the £1 million allowance not eligible for transfer between spouses on first death, a widely criticised announcement.

Employee Ownership Trusts

With effect from 26th November 2025, Capital Gains Tax relief available on qualifying disposals to Employee Ownership Trusts has been halved from 100% of the gain to 50%.

Capital Allowances

The Main Rate of Writing Down Allowances is set to change from 1st April 2026 for businesses subject to Corporation Tax, with the current rate of 18% being reduced to 14%. Those within the charge to Income Tax will see the same change from 6th April 2026. The rate of 18% has been set since 2012.

Also announced was the extension for a further year of the 100% First Year Allowance for qualifying expenditure on electric vehicles and zero-emission cars.

Business Rates

From April 2026, eligible properties used for retail, hospitality and leisure with rateable values below £500,000 will see a reduction in their rates multiplier. This will be funded by an increased multiplier for properties with a rateable value in excess of £500,000.

Your business and personal tax post-Budget

Whether you have concerns about your personal finances or how the Budget could impact your business, Shaw & Co can provide you with clarity and guide you through the changes relevant to you.

Contact Shaw & Co today on 01603 975976 with any questions you may have following the announcements on 26th November.