Last month’s Autumn Budget delivered a mixture of expected updates and some notable changes. With rising public sector costs and ongoing pressure on household finances, the Chancellor took a measured approach, raising taxes in certain areas but not as sharply as many had anticipated. For individuals, investors and business owners, these measures will influence financial decisions over the coming years. Below is a breakdown of the main announcements and what they mean in practice.
Personal Tax Thresholds Frozen Until 2028
Personal tax thresholds and the main National Insurance threshold will remain frozen until April 2028. As wages increase, more taxpayers will gradually move into higher rate bands. This extends the fiscal drag effect first created when the freeze was introduced.
Higher Taxes on Wealth and Investment Income
A key shift in this Budget is a greater reliance on revenue from wealth and assets. Taxes on dividends, savings income and property income will rise by 2 percent in line with the government’s commitment not to increase taxes on employment income. Those likely to be most affected include:
- Landlords who have already experienced several tax changes in recent years
- Owner managed businesses where remuneration often involves a mix of salary and dividends
Pension Salary Sacrifice Adjustments from 2029
From 2029 pension contributions made through salary sacrifice will be treated differently. Income tax relief will stay the same but National Insurance savings will be capped so that only the first £2,000 of contributions per year qualify. This change will reduce benefits for higher earners and may prompt a re-evaluation of pension contribution strategies.
New Council Tax Surcharge on £2m+ Properties
A new council tax surcharge will apply to homes valued above £2 million. The intention is to address long standing imbalances where lower value homes in some regions pay relatively more council tax than significantly more expensive properties elsewhere. This change will impact homeowners nationwide, but more so in London and the South East.
Business Incentives and Capital Relief Changes
The government reaffirmed support for business growth through:
- Continued backing for investment schemes such as EIS and VCTs
- Updates to EMI share scheme incentives
- A temporary three-year stamp duty exemption for companies listing on UK markets
Capital Allowances will continue to incentivise business investment although reliefs are being rebalanced to ensure long term sustainability. Tax relief for Employee Ownership Trusts will be reduced to 50%, reflecting tighter rules in this area.
Targeted Cost of Living Support
Several measures aim to ease financial pressure on households:
- An anticipated £150 reduction in energy bills from April
- A one-year freeze on regulated rail fares and prescription charges
- An increase to the National Living Wage
- A new Youth Guarantee offering all 16 to 24 year olds access to work education or training
These initiatives provide both immediate relief and longer term support for younger individuals.
What This Means for You
The Autumn Budget 2025 highlights a clear direction: targeted help for lower earners, higher taxes for those with significant investment or property income and continued but refined incentives for businesses. As the tax landscape continues to evolve, reviewing your remuneration strategy, investment approach, business structure and property holdings will be essential to make informed decisions and plan ahead effectively. For tailored guidance on how these changes may affect you, MITLEV Accountants are available to support your planning and decision making.
