Follow our live updates as the Chancellor delivers the Autumn Budget 2025. HB&O’s specialists will share their initial reactions to the key announcements and outline the potential implications for businesses and individuals.
The Autumn Budget last year announced £1million cap for 100% relief which was not transferrable between spouses and civil partners. This has now been reversed.
There will be a new mileage tax for electric vehicles from April 2028. In 2028/29, the charge will equal £0.03 per mile for battery electric cars and £0.015 per mile for plug-in hybrid cars, with the rate per mile increasing annually with CPI.
The dividend income change is actually quite a big contradiction if they are looking to encourage entrepreneurial activity.
Tax rates on property income, savings income, and dividends will each rise by 2 percentage points, increasing the effective tax burden for landlords, investors and individuals with non-salary income streams.
“This will focus the mind of people to save as much as they can before April 2029. Anything over the cap will be taxed in the same way as other employee pension contributions. This may be of interest to some of our clients that are planning for their retirement.”
From April 2029, salary-sacrificed pension contributions will be capped at £2,000 per year, with any excess treated as standard employee contributions and subject to Income Tax and National Insurance.
“The 20% VAT rate to be applied to private hire vehicle operators from January 2026 will remove the opportunity for them to apply a reduced VAT rate to journeys undertaken. In addition, by removing premium cars from the Motability scheme, this could impact the availability of VAT exemptions that would apply to premium cars used by people with disabilities under the scheme.”
Premium cars will be removed from the Motability scheme, which may affect VAT exemptions previously available for luxury vehicles used by people with disabilities.
From January 2026, VAT at 20% will apply to all private hire vehicle fares (PHVF), removing the ability for operators to use the Tour Operators Margin Scheme (TOMS) to reduce VAT liabilities.
“This will ultimately mean that more people pay higher rates of income tax and it fundamentally a tax on working people. This is called fiscal drag, it’s a tax on future pay rises.”
Freeze in income tax and national insurance thresholds: Extended for another three years to April 2031.
“At HB&O, we are proud to support the development of our future workforce. We have taken on a number of school leavers this year and have been incredibly impressed by what they have contributed to the business.
To that end, additional funding to help apprentices aged under 25 to access the skills and training they need to make a genuine difference to not just the accountancy sector, but the wider economy, has to be welcomed.”
The Government will cover 100% of training costs for eligible apprentices, removing the usual employer co-investment requirement and this applies to both levy-paying and non-levy employers.
The Budget includes several changes to business rates, including changes for the multipliers which are used to uprate business rates each year, which will reduce rates for retail, hospitality and leisure properties, and increase rates for high value properties. A transitional relief package will also cap increases following revaluations due in 2026.
“It’s a disappointing move as it may reduce the appetite to pass on businesses to employees. While still an attractive exit strategy, it could make business owners reconsider their options. We’ll be assessing the full details in the coming days.”
Reduced capital gains tax relief on disposals to employee ownership trusts
“By reducing the main rate of writing allowance, this means that companies will receive less tax relief on capital investment. It could lead to higher tax bills, however we will need more clarity on the actual writing down allowance post-budget.”
“It is good to see they have kept the ISA allowance at £20,000, with £12,000 for cash and £8,000 for stock and shares. This is really important to support clients in maximise savings.
“The cash ISA allowance has been reduced to £12,000 under 65s and retained at £20,000 for over 65s.”
£20,000 allowance will remain, but £8,000 of this will now be designated exclusively for investment purposes.
Over 65s, though, will retain the full cash allowance of £20,000.
Certain measures, such as adjustments to alcohol or tobacco duties, can take effect immediately on Budget day or shortly afterwards. For this to occur, the House of Commons passes a ‘Provisional Collection of Taxes’ motion as soon as the Chancellor finishes speaking. Traditionally, this is approved without a formal vote, allowing the changes to take effect from 6pm on Budget day.
This is set to be a complex Budget, with measures that will impact many of our clients in one way or another. Our team will be reviewing the announcement in depth to ensure we can provide clear guidance and practical advice as the implications become clearer.
Chancellor Rachel Reeves is set to deliver her Budget today at approximately 12:30pm. Follow along for live updates.
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