November 2025 Budget Summary
- Income Tax & Dividends
- Income tax rates on property, savings, and dividend income will rise by 2% across all bands (except the additional dividend rate).
- Dividend tax increases take effect from April 2026; property and savings tax increases from April 2027.
- Dividend ordinary rate rises from 8.75% to 10.75%, upper rate from 33.75% to 35.75%, additional rate remains at 39.35%.
- ISAs & Savings
- Cash ISA allowance cut to £12,000 from April 2027, but overall ISA allowance remains at £20,000 (with £8,000 ringfenced for stocks and shares).
- Pensions
- Maximum salary sacrifice escaping NI charges capped at £2,000 from 2029.
- £1 million allowance for 100% business and agricultural property relief is now transferrable between spouses/civil partners.
- Council Tax & Wealth
- Council tax surcharge introduced for properties worth over £2 million, ranging from £2,500 to £7,500, payable alongside existing council tax from April 2028.
- Stealth Taxes & Thresholds
- Most tax thresholds frozen until 6 April 2031, including personal income tax, NI, and inheritance tax nil-rate bands.
- Student loan repayment threshold (Plan 2) frozen for three years from April 2027.
- Capital Allowances
- Main rate writing-down allowance reduced from 18% to 14% from April 2026.
- New 40% first-year allowance introduced from January 2026.
- Property Income
- Separate tax rates for property income from April 2027: basic rate 22%, higher rate 42%, additional rate 47%.
- Finance cost relief provided at the property basic rate (22%).
- Inheritance Tax
- Unused agricultural and business property relief allowance transferrable between spouses/civil partners from April 2026, even if one died before this date.
- Employees
- Deduction for non-reimbursed home working expenses removed from April 2026.
- Employer reimbursements for eye tests, home working equipment, and flu vaccinations exempt from income tax and NI from April 2026.
- Salary sacrificed pension contributions NICs relief capped at £2,000 per year from April 2029.
- Cars & Electric Vehicles
- Expensive Car Supplement threshold for zero emission vehicles increases to £50,000 from April 2026.
- Mileage supplement for electric/hybrid cars introduced from April 2028 (3p per mile for electric, 1.5p for hybrids).
- State Pensioners
- Pensioners with only state pension income will not be required to pay tax via simple assessment if their pension exceeds the personal allowance from April 2027.
- Capital Gains Tax
- Relief on qualifying disposals to employee ownership trusts reduced from 100% to 50% from 26 November 2025.
- Incorporation relief must be actively claimed for business transfers from April 2026.
- Share Schemes
- EMI scheme expanded: employee limit to 500, gross assets test to £120 million, company share option limit to £6 million, maximum holding period to 15 years from April 2026.
- EMI notification requirement removed from April 2027.
- Investment Incentives
- VCT and EIS company investment limit increased to £10 million (£20 million for Knowledge Intensive Companies) from April 2026.
- Lifetime company investment limit increased to £24 million (£40 million for KICs).
- VCT income tax relief reduced to 20% (from 30%).
- VAT & Insurance
- New VAT relief for business donations to charity from April 2026.
- Vehicles leased through Motability Scheme subject to 20% VAT on top-up payments from July 2026.
- Insurance Premium Tax at 12% for vehicles leased through the scheme.
- Non-UK Residents
- Dividend tax credit abolished for non-UK residents from April 2026.
- Non-resident capital gains tax rules amended with immediate effect.
- Class 2 NI contributions for increasing UK state pension entitlement abolished for those abroad from April 2026.
- Miscellaneous
- Temporary 5p fuel duty cut extended for five months, reversed in stages between September 2026 and March 2027.
- Corporation tax late filing penalties doubled from April 2026.
- Customs duty relief on goods under £135 removed from March 2029.
Autumn Budget 2024
As in the past I do not comment on many items covered by the national media. At the time of writing there are 9 pages of press releases (many of which superfluous for most of us!)
CGT was the main concern and yes the rates are increasing but at least they have not been charged at income tax rates! All assets will be charged at the same Rates as Residential Property with immediate effect – details below (TBH I did not expect this to be straight away).
Business Asset Disposal Relief (the 10% rate) remains unchanged for this tax year and increases with effect from April 2025 so time to do some planning if a couple have £2 million of business asset gains but not ready to dispose of the business yet.
CGT rates
- the main rates of Capital Gains Tax that apply to assets other than residential property and carried interest from 10% and 20% to 18% and 24% respectively, for disposals made on or after 30 October 2024
- the rate of Capital Gains Tax that applies to trustees and personal representatives from 20% to 24% for disposals made on or after 30 October 2024
- the rate of Capital Gains Tax that applies to Business Asset Disposal Relief and Investors” Relief from 10% to 14% for disposals made on or after 6 April 2025, and from 14% to 18% for disposals made on or after 6 April 2026.
The rates of Capital Gains Tax that apply to residential property disposals (18% and 24%) will remain unchanged.
IHT is not good news:-
Pension funds previously not charged to IHT now will be with effect from April 2026. (Historically thinking was to not draw pension fund if not required, perhaps a consideration now is to draw the tax free lump sum and gift) However this is under consultation until January 2025 so no detail known.
Business Assets in excess of £1 million now charged at 20% in excess of £1 million value (per person)
As always there is devil in the detail. The new rates apply if a person gifts between now and April 2026 but dies within seven years of the gift.
The nil rate band of IHT remains unchanged at £325k and the residential rate at £175k. (pretty much forever it seems)
Employment tax – Employers NI increasing by 1.2% to 15% and is now calculated on salaries in excess of £5,000. The potentially significant increase however offset for smaller companies (those employing up to four people apparently) by the Employment Allowance increasing from £5,000 to £10,500 Employment Allowance is a deduction from the payment made to HMRC for NI. the reduction in the level at which Employers NI becomes payable is potentially a dramatic imposition for many)
SDLT not good news for second homes in particular relevant when transferring residential property to a limited company. The rate increasing from 3% to 5% wef 31st October.
Directors Loans from Close Companies. The rules are being tightened and at present watch this space for the many who borrow from their companies – at first sight it may not be too onerous but…https://www.gov.uk/government/publications/corporation-tax-close-company-shareholders-anti-avoidance-measure/a8b0ad4d-9770-4dc5-a4dd-7fd5430f8e40
Electric cars continue to be tax favoured.
Tax advisors – with effect from April 2026 all tax advisors have to be registered with HMRC. While I do not welcome compliance this may have merit!
Umbrella Companies – an agency that supplies the worker to the end client will be legally responsible for operating PAYE on the worker’s pay and will be liable for any shortfall. Bear in mind they are very much impacted by the Employer NI increase.