For our clients, the Budget brings urgent focus to pension strategies, property taxation, dividend/savings planning, and cash flow impact for both individuals and businesses.
Key announcements
Freeze in personal tax thresholds will be extended from April 2028 until April 2031, raising £8.3bn by the end of the decade. The policy drags more people into the tax system or higher tax brackets each year as their pay increases.
Salary sacrifice pension contributions will be capped at £2,000 a year before national insurance applies, raising £4.7bn by the end of the decade.
Council tax surcharge will be applied to homes worth more than £2mn from April 2028, raising £400mn in 2029-2030.
Two-child benefit cap will be scrapped, adding about £3.5bn to the welfare bill. The current cap limits the number of children for whom low-income families can claim welfare benefits.
Cash ISA allowance to be cut from £20,000 to £12,000 for people under the age of 65, as of April 2027. Over-65s will retain the existing cash allowance of £20,000.
Immediate Assessment and Analysis by tax experts at HB&O
Helen Coombes, Head of Tax
“The messaging from Government ahead of today’s all-important fiscal address was that this was going to be a tough Budget, with measures that would impact many of our clients in one way or another.
“And so it proved because a lot of the changes announced are going to create genuine complexities and make the UK tax system more involved.
“The freeze on income-tax and NIC thresholds and increase in tax on dividends, savings and property income, along with the upcoming cap on tax-efficient pension salary-sacrifice from 2029, will require serious planning for many clients.
“Whilst some support for small businesses was announced, many employers are still dealing with NIC increases from the last budget and this could impact upon their plans for growth going forward.
“It’s clear that our clients will need to exercise greater tax discipline in the coming years to safeguard the future of their finances.”
Neil Allcroft, Tax Director
“I view the 2025 UK Autumn Budget as a clear signal that the tax landscape for investors, property owners and higher-earners is set to shift significantly.
“At the same time, increases to taxes on dividends, savings, property income, and the new surcharge on high-value homes will require fresh planning strategies.
“The dividend income change is actually quite a big contradiction if they are looking to encourage entrepreneurial activity. A proactive review of commercial and personal finances will be essential to mitigate cost and preserve value.”
“Another interesting announcement in respect of Employee Ownership Trusts may also impact Entrepreneurs. By reducing the tax benefits available to business owners, it may reduce their appetite to pass on businesses to employees. While still an attractive exit strategy, it could make them reconsider their options.”
Vanessa Glenn, Senior Tax Manager
“To single out a particular policy, it would be fair to say there’s been something of a U-Turn on Agricultural Property and Business Property Relief.
“The Autumn Budget last year announced a £1million cap for 100% relief which was not transferrable between spouses and civil partners. This has been changed, with any unused relief now being transferrable.
“This will help and simplify tax planning for some clients, but does not go anywhere near far enough.”
