UK Autumn Budget 2025: Key Tax Changes and What They Mean for You
- Denis Kuci
- Dec 11, 2025
- 2 min read
The Autumn Budget 2025 introduced a wide-ranging set of tax reforms intended to support public finances and reshape the UK’s fiscal landscape. For individuals, property owners and businesses, these measures will influence tax liabilities for years to come.
At Praxis Tax Solutions, we’ve summarised the most significant changes and outlined how they may affect your financial planning.
Personal Tax: Threshold Freezes Continue to Drive Fiscal Drag
The Government has extended the freeze on key Income Tax and National Insurance thresholds until 2031, including:
Personal Allowance: £12,570
Higher-rate threshold: £50,270
Why it matters
As wages rise, more individuals will move into higher tax bands — increasing tax bills even though headline tax rates remain the same. This makes proactive tax planning essential.
Tip: Consider tax-efficient remuneration strategies and ensure personal allowances are used effectively.
Tax on Savings, Investments and Rental Income Increases
Significant changes will impact investors and landlords:
Dividend Tax
Dividend tax rates will increase by 2% from April 2026 across all bands.
Savings & Rental Income Tax
From April 2027:
Basic rate rises to 22%
Higher rate rises to 42%
Additional rate rises to 47%
ISA Allowance Changes
From April 2027, the cash ISA limit for under-65s will reduce to £12,000, while the overall £20,000 allowance remains unchanged.
What this means for you: Investors holding assets outside ISAs or pensions will face greater tax exposure. Strategic use of tax-advantaged wrappers is now even more valuable.
High-Value Property Surcharge Introduced (“Mansion Tax”)
A new High-Value Council Tax Surcharge begins in April 2028:
Properties valued over £2 million will incur annual charges between £2,500 and £7,500, depending on value.
Planning opportunity: High-net-worth clients should review property portfolios and consider long-term ownership structure implications.
Pension Salary Sacrifice Reform
From April 2029:
Only the first £2,000 of annual pension contributions via salary sacrifice will be exempt from National Insurance.
Amounts beyond this threshold will attract both employer and employee NI.
Businesses and employees who rely heavily on salary sacrifice arrangements should begin reviewing their schemes now.
Business Tax Updates
Corporation Tax
The main rate remains at 25%.
Small-profit companies continue at 19%.
Compliance Penalties
From April 2026, penalties for late Corporation Tax returns will double. Accurate record-keeping and timely submissions are more important than ever.
Investment Incentives
Adjustments to share-based incentives and stamp duty reliefs aim to stimulate investment and business growth.
Additional Tax Measures to Note
CGT Relief Changes: Restrictions on some reliefs, impacting succession planning.
Mandatory e-Invoicing (from 2029): All VAT-registered businesses will need compatible systems.
Electric Vehicle Mileage Charge (from 2028): EVs will be subject to mileage-based taxation to replace lost fuel duty revenue.
What Should Taxpayers and Businesses Do Now?
Individuals
Review investment and savings strategies.
Make full use of ISAs and pension allowances.
Consider income-splitting opportunities where applicable.
Landlords & Property Investors
Assess the impact of rising property income taxes.
Revisit property ownership structures.
Businesses
Tighten compliance processes ahead of higher penalties.
Review remuneration strategies in light of salary sacrifice reform.
Plan ahead for e-invoicing adoption.
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