Chancellor Rachel Reeves took to a boisterous Chamber on Wednesday 26 November, not long after a shock leak by the Office of Budgetary Responsibility (OBR) had meant that much of what she was about to announce was already in the public domain.
That setback aside, Reeves continued to deliver her 2025 Autumn Budget to Parliament. We have summarised the key tax-related announcements:
Inheritance Tax Agricultural/Business Reliefs – any unused £1M 100% relief band will be transferrable between spouses/civil partners, including if first death was before 6 April 2026
Income Tax – rates on dividend income – increased by 2% - basic rate to 10.75%, higher rate to 35.75% (additional rate 39.35% unchanged) – from April 2026
Income Tax – rates on property income and savings income - increased by 2% - basic rate to 22%, higher rate to 42%, additional rate to 47% – from April 2027
National Living/Minimum Wage – rates increased to £12.71, to £10.85 (age 18-20) and to £8.00 (age 16-17, apprentices) – from April 2026
Individual Savings Accounts (ISAs) - £20,000 annual limit for under 65s: cash investment capped at £12,000, with balance £8,000 reserved for share investments - from April 2027
Capital Allowances - on zero-emission cars/EV chargepoints – 100% First Year Allowance relief for qualifying expenditure extended to 2027
Income Tax – Personal Allowance (£12,570) and higher rate (£50,270), additional rate (£125,140) thresholds frozen to April 2031
Capital Allowances – ‘main rate’ expenditure Writing Down Allowances (Income Tax and Corporation Tax) - reducing from 18% to 14% - from April 2026
Capital Gains Tax – amount of relief on share sales to Employee Ownership Trust reduced from 100% to 50% of gains – from 26 November 2025
Salary Sacrifice for Pensions – first £2,000 of employee contributions via salary sacrifice exempt from employer/employee National Insurance Contributions (no change to Income Tax treatment) - from April 2029
Venture Capital Trusts – upfront Income Tax relief reducing from 30% to 20% - from April 2026
VAT - Charity Tax Relief for business donations of goods to charity – from April 2026
Capital Allowances - 40% First Year Allowance for any ‘main rate’ capital expenditure which does not qualify for ‘full expensing’ or £1M Annual Investment Allowance - from January 2026
Corporation Tax – penalties for late tax return filing to double - from April 2026
Should you require further information on how these changes might impact upon you or your business, please contact our GMcG Tax Team who will be happy to advise.
