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The Chancellors Autumn Budget 2025 leaves UK businesses and individuals with plenty to think about. With a combination of new tax rises, freezes and reliefs, knowing how the changes impact you is crucial to making informed decisions from here on out.
In this blog, we are going to unpack the most important results details which came out of the Budget, give you everything that you need to be aware about how tax policy changes have affected businesses, property owners, investors and individuals. And Muhammad Sufyan Moavia offer practical advice on planning ahead and using tax reliefs and allowances.
As always, we at IBISS & CO are here to assist you in understanding these changes and ensuring that your financial planning is current.
What is the Autumn Budget 2025?
Chancellor Rachel Reeves, 26 November 2025. The Autumn Budget sets out the government’s fiscal policy for the coming years. Because behind this Budget are tax increases and freezes. The government seem to be trying to square the circle, that of balancing the books without incurring more economic instability.
For companies, savers, investors and individuals. Bottom line: The tax burden will increase & long term tax thresholds will be frozen. For others, this may mean more debt (especially if they don’t plan beforehand).
This Budget will affect your corporate strategy, personal finance and retirement plans. It’s not all bad news but careful planning and guidance is key to staying ahead of such broad changes.
Changes for Businesses in the 2025 Budget
Corporation Tax & Capital Allowances
Corporation tax is one of the central battlegrounds with head line rate at 25 per cent. Smaller businesses still have enjoyed the benefit of the Small Profits Rate and marginal relief. But for those who are in the market to invest, capital allowances continue to be a critical tax planning tool.
Good news for businesses: Full expensing is here to stay, at least for now; it allows firms to write off the cost of capital investments in the year that assets are purchased rather than having to spread out those deductions over time, thus making taxable profits lower. Enterprises can continue to take advantage of a £1m Annual Investment Allowance (AIA) on plant and machinery, for example.
A new 40% 1st year allowance for certain main rate assets is also set to be introduced, effective from January 2026 in order to promote investment in some business assets. It is also worth noting that from April 2026 businesses will find that the writing down allowance for main rate assets has been cut to 14% something for businesses to bear in mind when they are making plans around long term investment.
Employment, Wages & National Living Wage
The National Living Wage will increase to £12.71 an hour from April 2026. That jump also speaks to the government’s pledge to increase pay. But businesses also will have to account for the more expensive compliance that comes with rising wages.
The government is establishing a youth employment guarantee providing 6 months training, work experience or wrk trial to those aged between 18 -21 eligible. This comes in a bid to address youth unemployment. But companies need to be prepared to deal with this new initiative.
Business Rates & High Value Properties
For property owners, there is a new high value property tax. Starting in April 2026. Businesses owning properties worth over £500,000 will see their business rates increase to 50.8p per £1 of rateable value.
The Budget also proposes an extra 2 year relief for small businesses seeking to expand, offering some much-needed support to keep costs manageable during periods of growth.
Making Tax Digital (MTD)
The government will widen MTD requirements to include all sole traders and landlords with turnover above £20,000 by the end of Parliament. But some cohorts will be put back to April 2027. So be sure to keep up with your filing duty if you want to avoid penalties.
EVs and Company Cars
The Budget also set out plans to apply a per-mile tax on electric vehicles (EVs) from April 2028. Businesses that operate EV fleets will have to account for this in their total cost of ownership. Better news is that 100% first-year allowances for zero-emission cars and EV charge points have been extended to March 2027 (for companies) and April 2027 (for individual taxpayers).
What the 2025 Budget Actually Means for You, Savers & Investors
Income Tax & Threshold Freezes
A key focus for people is the freeze in the Personal Allowance (£12,570) and Higher Rate Threshold (£50,270) until April 2031. That means that as wages and inflation grow over time, more people could get pushed into the higher tax rates even though their incomes have not increased.Finally, you should know that Treasury has a second financing option in mind.
Dividend Tax Increases
People will pay more in dividend taxes starting in April 2026. The rate on the ordinary dividend will increase from 8.75% to 10.75%, and it will rise from 33.75% to 35.75%. This is going to hurt a lot of investors, but in particular those who depend on dividends as their main source of income.
Capital Gains & Inheritance Tax
On the capital gains side, the Business Asset Disposal Relief (BADR) rate will jump from 10% to 14% in April 2025 and then again to 18% in April 2026. Employee Ownership Trusts (EOTs) The relief by which the Gain on Disposal of shares from a company to an EOT is 100% with no restriction will be reduced to 50% in November 2025 so if you are considering selling or passing on a business it could make sense to act soon rather than later.
Inheritance Tax (IHT) thresholds are to be frozen until 2031 – potentially bringing more estates into the taxable band as property prices and inheritance rise. If you expect to pass on some wealth, it is also worth considering your IHT planning now.
Pensions & Salary Sacrifice
The National Insurance relief for people who have salary sacrifice pensions will be restricted to £2,000 a year from 6 April 2029. With pensions planning becoming more and more complicated, it is vital to review when contributions should be made in order to achieve maximum tax efficiency.
Mansion Tax & High-Value Property
From April 2028, a mansion tax will be introduced on properties costing more than £2 million. There will be a £2,500 surcharge for homes worth between £2 and 5 million while those higher than that will face a fee of £7,500. Landlords at these price points should be planning for those costs right now.
What Planning can you do to optimise your Tax Situation
With these significant changes on the horizon, careful planning is key to navigating the challenges and opportunities ahead. Here are a few key steps to consider.
For Businesses
Take advantage of full expensing and capital allowances before rates change in 2026.
Review your business rates, especially if you own properties worth over £500,000 to factor in the new high value multiplier.
Prepare for the EV mileage charge if your business has a fleet of electric vehicles.
Plan for Making Tax Digital (MTD) make sure your systems are in place. Especially if you are a sole trader or landlord with income over £20,000.
For Individuals
Maximise your pensions contributions before the salary sacrifice cap kicks in.
Consider selling assets or reorganising your business to take benefit of the current CGT rates before they increase in 2025.
Review your ISA and savings strategy take full advantage of existing allowances before limits are reduced.
Start planning for higher inheritance tax bills by reviewing your estate and considering tax efficient gifting strategies.
Why IBISS & CO is Your Trusted Advisor
Our promise for help businesses and individuals stay ahead of tax changes. Our expert team of accountants and tax advisers offers tailored advice to help you navigate complex changes, optimise your tax position, and plan effectively for the future.
Whether you are a business owner looking to make the most of capital allowances or an individual wants to maximise your pension contributions before the freezes take effect. We are here to guide you every step of the way.
FAQ
Most businesses will continue to pay a corporation tax rate of 25%. Nonetheless small businesses will still have access to a small profits rate and marginal relief.
The freeze in the personal allowance (at £12,570) and higher-rate threshold (£50,270) until 2031 means that inflation may drag more people into higher tax bands, leading to heightened tax liabilities.
From April 2028, a mansion tax will be applied for homes that are priced at more than £2 million. A £2,500 surcharge will be applied to homes worth between £2 and £5 million and there is a further surchage of £7, 500 for homes valued above £5 million.
Capital Gains Tax (CGT) charges will increase in April 2025 and 2026, especially for the disposal of business assets. The BADR rate rises to 14% in 2025, and to 18% in 2026.
The full expensing arrangement enables businesses to claim the cost of qualifying capital assets in the year of purchase, providing an immediate deduction against taxable profits. It is applicable to new unused assets and covers plant, machinery and certain vehicles.
There will be a ‘pence per mile’ charge applied to electric vehicles (EVs) from April 2028. This levy will be applicable to EVs which are used for personal and businesses purposes, impacting the running costs.
Business rates multiplier: The business rates multiplier for properties with a rateable value of more than £500,000 will increase to 50.8p per pound of rateable value from April 2026. Small businesses can also count on more relief for growth being extended by two years.
The National Living Wage will reach £12.71 per hour from April 2026 which may lead to higher staff costs. Businesses will have to draw up in their budget planning for the wage hike.
Contact IBISS & CO about your Budget 2025 Impact Review
The Autumn Budget 2025 has introduced a variety of significant tax changes that will impact businesses, property owners, investors and individuals alike. Whether it is tax freezes, changes in allowances or the introduction of new taxes like the mansion tax or EV mileage charges. It is essential to get ahead of these shifts.
At IBISS & CO., we are here to guide you through these changes. Our team of experienced accountants and expert tax advisors can help you navigate the intricacies of tax planning make sure compliance and optimise your tax strategies for the future.
If you have any questions about how the Budget will affect you or your business. Do not hesitate to contact IBISS & CO for a consultation. We are here to make tax season stress free and help you make the most of every opportunity.
