The Autumn Budget 2025 & What It Could Mean For You.

The Chancellor’s Autumn Budget has delivered significant tax-raising packages, with measures worth £26 billion. A Budget that stretches the Labour Manifesto promise to, “not increase taxes on working people” to the absolute limit. Further freezes are being made to personal tax thresholds and increases in tax rates for dividends, savings income and property income.  

While the taxation environment is becoming more difficult, most major changes are forward-dated, giving business owners and high-net-worth individuals valuable time to plan. 

Our message to you is simple: this is a moment for preparation, not panic. With the right strategy, you can still protect value, manage rising tax pressures and unlock opportunities created by new incentives.

Click here for an overview of the key measures and what they could mean for you:

KEY IMPACTS FOR BUSINESSES

CORPORATE TAX STEADY, BUT PERSONAL TAX COSTS RISING

Corporation Tax remains capped at 25%, offering stability. However, future increases to dividend, savings and personal tax burdens mean it will become more costly for owner-managers to extract profits.

OUR VIEW:

Now is the time to revisit profit extraction strategies. Blends of salary, dividends and other routes may need recalibration.

CAPITAL ALLOWANCES SHIFTING – CASHFLOW PLANNING ESSENTIAL

As part of the now annual cycle of Capital Allowance changes the rate of main pool Writing Down Allowance falls to 14%, but the £1m Annual Investment Allowance remains. A new 40% first-year allowance arrives in 2026.

OUR VIEW:

For capital-intensive businesses, timing matters. Investment modelling will be key to optimising reliefs and managing cashflow. For many SME businesses however the retention of the £1m Annual Investment Allowance means that 100% relief on most capital expenditure remains available.

SALARY SACRIFICE BECOMES LESS EFFICIENT

From April 2029, only the first £2,000 of pension contributions via salary sacrifice will be free from NICs.

OUR VIEW:

The long lead time gives employers and employees scope to plan ahead and make structured changes to pension arrangements.

RISING EMPLOYMENT COSTS

National Living Wage increases sharply from April 2026 – with the hourly rate increasing to £12.71.

OUR VIEW:

Labour-intensive sectors will need to revisit workforce planning, cost structures and opportunities to leverage technology to drive efficiencies.

EMPLOYEE OWNERSHIP TRUST (EOT) RELIEF REDUCED

Business sales to an EOT now benefit from only 50% CGT exemption, reducing the tax advantage.

OUR VIEW:

EOTs remain viable for businesses genuinely committed to employee ownership but will be less attractive as a pure tax-driven succession route. This follows earlier changes to the tax position on sales to an EOT announced at the 2024 Budget.

KEY IMPACTS FOR INDIVIDUALS AND FAMILIES

FROZEN TAX THRESHOLDS AND RISING RATES

Income Tax and NIC thresholds remain frozen until 2031, pulling more income into higher bands as earnings grow. Dividend, savings and property income tax rates will rise throughout 2026 and 2027.

OUR VIEW:

This makes proactive income and wealth planning essential. Modelling future income streams and restructuring portfolios can still deliver improved outcomes with the right approach.

HIGH-VALUE PROPERTY SURCHARGE

A new Council Tax surcharge for properties over £2 million from April 2028 will increase annual ownership costs (final structure subject to consultation).

OUR VIEW:

The widely trailed “Mansion Tax” has ended up as a far more limited measure – but potentially could indicate the direction of travel for future changes.

CHANGES TO AGRICULTURAL AND BUSINESS PROPERTY RELIEF

As announced at the 2024 Budget from 2026, reliefs will be capped at £1 million per person. Despite suggestions this £1m limit would be increased at the 2025 Budget in response to pressure from the farming sector it has been retained at £1m. However, in a slight relaxation, the £1m allowance will now be transferable between spouses.

OUR VIEW:

Not a seismic shift, but important for succession planning, especially for owners of farms, estates and private commercial assets. Plans should be revisited ahead of 2026.

OUR PERSPECTIVE: A MORE CHALLENGING LANDSCAPE, BUT CLEAR OPPORTUNITIES

The Budget tightens the tax environment for wealth creators and business owners. However, expanded growth incentives, new investment frameworks and stability in business taxation also create opportunities for the prepared.

In uncertain times, proactive planning becomes a competitive advantage. Those who act early will retain more value, invest more confidently and stay ahead of the curve.

We’re here to help you understand how these changes affect you and support you in building a forward-looking plan.