Autumn Budget 2025 summary and key changes
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Overview of Rachel Reeves’ Autumn Budget
On 26 November Rachel Reeves, Chancellor of the Exchequer, delivered the Autumn Budget and positioned it as a rebalancing of the tax system designed to restore stability and support households through a period of high living costs. She described the statement as “a balanced Budget: fairness, stability and investment, not reckless borrowing or cuts”, and emphasised that the government intends to “deliver on the priorities of the British people: cutting NHS waiting lists, reducing national debt and easing the cost of living”.
To strengthen the government’s fiscal position, Reeves set out a series of reforms worth a total of £26 billion, designed to align the tax treatment of income, savings and wealth while improving overall resilience and avoiding austerity.
The Office for Budget Responsibility, supported by data from the Office for National Statistics (ONS), forecasts that the measures announced will significantly increase tax revenues and help reinforce the resilience of the UK’s financial position.
Key Changes announced in the Autumn Budget
The Chancellor introduced a series of reforms that reshape income, savings and property taxation. The headline measures include:
- Income tax personal allowance thresholds will remain frozen until 2030 to 2031.
- Dividend tax rates will rise by two percentage points from 2026/27.
- From 2027/28, all rates applicable to savings income will be increased by 2%.
- From 6 April 2027, the annual Individual Savings Account (ISA) cash limit will be set at £12,000, within the overall annual ISA limit of £20,000.
- The two-child benefit cap will be abolished from April 2026.
- Property income will be taxed under a restructured regime from 2027/2028. The property basic rate will be 22%, the property higher rate will be 42%, and the property additional rate will be 47%.
- A new High Value Council Tax Surcharge (HVCTS) property tax will apply to homes above £2 million.
- Pension salary-sacrifice NIC reliefs will be restricted for higher earners to £2,000 per annum.
- From 1 April 2026, the National Living Wage will increase by 4.1% to £12.71 per hour. The National Minimum Wage for 18-20 year olds will also increase by 8.5% to £10.85 per hour and for 16-17 year olds and apprentices by 6.0% to £8.00 per hour.
- The government will reduce the Capital Gains Tax relief available on qualifying disposals to Employee Ownership Trusts from 100% of the gain to 50%. This will take effect from 26 November 2025.
- New listed UK company shares to receive a three year stamp duty break.
- Access to the Venture Capital Trust (VCT) and Enterprise Investment Schemes (EIS) will also be extended to more companies. The government will increase the VCT and EIS company investment limit to £10 million (£20 million for Knowledge Intensive Companies (KICs)) and increase the lifetime company investment limit to £24 million, and £40 million for KICs.
- A mileage-based charge for electric vehicles will replace part of fuel duty.
What the changes mean for business and economic growth
Although the measures are positioned as a responsible reset of the public finances, there remains uncertainty over whether the Budget provides enough support for business investment or long-term economic growth. The absence of substantial pro-investment or productivity-focused reforms risks dampening business confidence at a time when higher taxes on savings, dividends and property income will reduce the capital available to entrepreneurs and investors.
The measures rely heavily on short-term tax increases than on wider structural reform, which may stabilise public finances but does not guarantee the grown momentum required to strengthen competitiveness in the medium term. Incentives such as Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) remain in place and continue to offer targeted opportunities for investors, yet the overall balance of the Budget leans more towards revenue raising, than creating a stronger environment for expansion and long-term business investment.
For further information to help you better navigate the changes from the Autumn Budget or to book a personal consultation, please contact our tax expert Mark Moore.
Get in touch
If you have any questions relating to any of the announcements covered in this Autumn Budget and how they may impact you and your business, and require advice, please contact us by completing the form below or get in touch with one of our tax experts.
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