Budget 2025: Key Changes Affecting the Most People

On 26 November 2025, the Chancellor delivered a Budget that will impact almost every household and business over the coming years. While billed as a stabilising Budget, many of the measures announced will increase the tax burden for working people, savers, homeowners, landlords and business owners.

At Bicknell Business Advisers, we have reviewed the full report to highlight the changes that will affect the largest number of people — in practical, jargon-free terms. Download a 20 page report from our website www.bicknells.net

Frozen Income Tax Thresholds Until 2031

One of the most far-reaching changes is the decision to freeze income tax thresholds for an additional three years, now running until 2030/31. This means:

Your personal allowance stays at £12,570
Higher-rate and additional-rate thresholds are fixed until 2031
As incomes rise, more people will drift into paying higher tax bands

This “fiscal drag” will increase the tax paid by employees, pensioners and the self-employed over time.

Higher Taxes on Savings, Dividends and Property Income

From 2026–2027, several significant rate increases will affect investors, company directors and landlords.

Dividend Tax Increases (from April 2026)

Basic rate: 10.75%
Higher rate: 35.75%
(an increase of 2 percentage points)

Savings & Property Income Tax Increases (from April 2027)

Basic rate: 22%
Higher rate: 42%
Additional rate: 47%

For many people, this will mean higher tax bills on rental income, interest, and dividends extracted from a company.

New High-Value Property “Mansion Tax”

From April 2028, a new council tax surcharge will apply to properties worth more than £2 million.

Annual charge: £2,500 to £7,500
Applies to the homeowner, not the occupier
Valuation will be set before the tax is introduced

This will particularly affect landlords, holiday let owners and those with high-value main residences.

ISA Changes: Cash Limit for Under-65s

The overall ISA limit stays at £20,000, but major changes arrive in April 2027:

Under-65s can only place £12,000 each year into a cash ISA
Over-65s retain the full £20,000 cash ISA allowance

This will be a significant shift for regular savers who rely on tax-free returns.

Minimum Wage Increases (April 2026)

Millions of UK workers will receive a pay rise:

National Living Wage (21+): £12.71
18–20 Rate: £10.85
16–17 & apprentices: £8.00

This change benefits workers but increases payroll costs for employers — something business owners should factor into 2026/27 planning.

Electric Vehicle Road Charge Introduced

From April 2027, the UK will introduce a mileage-based road charge:

3p per mile for electric cars
1.5p per mile for hybrids

This marks the beginning of a new era in EV taxation as the government seeks to replace lost fuel duty revenue.

Corporation Tax: No Change to Rates

Corporation tax remains unchanged into 2026/27:

19% small profits rate
25% main rate for profits over £250,000

However, combined with increased dividend taxes, company directors should review their remuneration strategies.

Making Tax Digital (MTD) Moves Forward

For sole traders and landlords with turnover above £50,000, MTD for Income Tax becomes mandatory from April 2026:

Quarterly digital submissions required
No penalties for late quarterly filings in year one
Annual submissions still required

This is a major shift for property landlords and small businesses.

Stamp Duty: No Changes for Homebuyers

There were no changes to Stamp Duty Land Tax (SDLT) in England or Northern Ireland:

Threshold remains £125,000
First-time buyer relief unchanged
Additional property surcharges continue to apply

This stability will be welcomed by buyers and landlords planning acquisitions.

How Bicknell Business Advisers Can Help

These Budget changes mean many individuals and businesses will face higher tax bills and greater compliance obligations. Early planning is essential.

We can support you with:

Personal tax planning for 2026 and beyond
Dividend and remuneration strategies
Property and landlord tax reviews
Business planning for wage and NIC changes
Preparing for Making Tax Digital
Inheritance tax and estate planning

If you’d like personalised advice, please get in touch.
We’re here to help you plan with confidence.

https://www.bicknells.net/meet-the-team

Could taxes go up in the Autumn Budget? How to be ready

At the last general election, the Labour party pledged to not raise taxes for ‘working people’,with assurances that there will be no changes to income tax, national insurance (NI) and VAT.

While this pledge may appeal to UK workers, it does limit what the Chancellor, Rachel Reeves, can do when it comes to raising taxes and reducing the UK’s current economic deficit.

With individual taxes protected, some commentators have argued that it’s UK businesses that will bear the brunt of any hikes in taxation.

But what tax changes are most likely? And could any changes impact you and your business?

Possible changes that could be announced in the Autumn Budget

Let’s take a look at some of the potential changes we could see being announced by Rachel Reeves on the 26th November.

Remember, these are speculative outcomes from the Budget and nothing has yet been confirmed by the Chancellor or the Labour party.

Here are the areas most likely to see amendments

Personal taxes

Capital Gains Tax:

Capital gains tax (CGT) is widely tipped for changes. The government may raise the rates of CGT or reduce the annual tax-free allowance, which has already been significantly cut in recent years. There’s also speculation about extending CGT to high-value homes as an easy way to raise more tax revenue when property owners sell more expensive properties.

Inheritance Tax (IHT):

Reforms to IHT are being considered. This could include lowering the current tax-free threshold of £325,000, which has been frozen since 2009, or tightening rules around gifting to prevent large estates from avoiding tax.

Income Tax Thresholds:

While the government has pledged not to raise the rate of income tax, a common ‘stealth tax’ is to freeze tax thresholds. It’s possible the current freeze on income tax thresholds could be extended. This would pull more people into higher tax brackets as wages rise, generating more tax revenue for HMRC.

Pensions:

Changes to pensions are possible, with a focus on areas like the tax-free lump sum that can be taken from a pension, or restricting the tax efficiency of salary sacrifice schemes.

Business taxes

VAT changes:

It’s possible that widening the scope of VAT could raise significant tax revenue. There’s also speculation that the Chancellor may reduce the VAT registration threshold, currently set at £90,000 p.a. This would require many more businesses to register for VAT and charge the tax on goods and services.

Business rates:

Although not part of the Autumn Budget, changes to business rates could have a major impact for some businesses. Businesses are already facing new business rate burdens, but some commentators are warning of an ‘unavoidable double hit’ that could push UK business rates bills up by £2.5bn.

Business Asset Disposal Relief (BADR):

For business owners who plan to sell their company, changes to CGT on these sales have already been announced. The rate for BADR rose from 10% to 14% in April 2025, and there’s a further increase to 18% planned for April 2026. Changes to the rate, or the period of availability of BADR are additional possibilities.

Property Taxes: A Likely Target Area

Stamp Duty Land Tax (SDLT) Reform

The Chancellor is considering replacing SDLT with a national property tax or sale-based levy on homes worth over £500,000.
This could reduce costs for first-time buyers but increase tax for luxury properties.

Council Tax Reform

Council tax may finally be revalued after more than 30 years, with proposals to:

Link bills to current market values

Shift liability to property owners rather than occupants

Give local councils rate-setting powers

CGT on High-Value Homes

Homes worth over £1.5 million may lose full CGT exemption — a move aimed at capturing untaxed gains from the wealthiest property owners.

Landlords and Rental Income

The government could extend National Insurance Contributions to rental income and revisit mortgage interest and loss relief rules, increasing costs for private landlords.

We’ll be summarising the key points of the Autumn Budget once the Chancellor delivers her speech.