Autumn Budget 2025: What it means for businesses and individuals
The Chancellor’s Autumn Budget 2025 sets the tone for the UK’s economic strategy over the next few years. While headline income tax rates remain unchanged, the budget introduces significant measures that will affect both businesses and individuals. Here’s a breakdown of the key points.
Impact on businesses
- Business rates relief
Retail, hospitality, and leisure sectors will benefit from permanent lower business rates, alongside a £4.3 billion support package to cap increases from April 2026. Film studios also receive an extra year of 40% relief, supporting the creative industry. - Investment incentives
To encourage growth, the government has made the 40% First Year Allowance permanent for main rate assets and retained the £1 million Annual Investment Allowance. Additionally, £2 billion is allocated for the EV transition, and EV-only forecourts will enjoy 10 years of 100% business rates relief. However rate of writing down allowance for most assets will reduce from 18% to 14% from April 2026. - Venture capital investment
There are changes being made from 6 April 2026 that increase the size of a company that can issues share options under the Enterprise Management Incentive scheme, and shares under the Enterprise Investment Scheme. For EMI schemes the maximum exercise period for options is increased from 10 to 15 years. This will also apply to currently unexercised options. The rate of tax relief given to individuals who invest in VCT’s is to reduce from 30% of the amount of the investment made to 20% with effect from 6 April 2026 - Minimum wage hike
- Starting April 2026:
- £12.71/hour for workers aged 21+
- £10.85/hour for 18–20-year-olds
- £8/hour for under 18s and apprentices
This will increase costs for labour-intensive sectors.
- Sugar tax extension
The sugar levy now applies to pre-packaged sugary milk drinks, with thresholds tightening to 4.5g sugar per 100ml by 2028. - Stamp duty exemption
Newly listed UK shares will enjoy a three-year stamp duty exemption, aiming to boost investment in domestic markets.
Impact on individuals
- Income Tax & NI threshold freeze
Thresholds remain frozen until 2030–31, pulling more earners into higher tax bands and generating an estimated £8 billion extra revenue by 2029–30. - Pension salary sacrifice cap
From April 2029, only the first £2,000 of salary sacrifice for pensions will be exempt from NI. Contributions above this will attract NI charges. - Savings & investment changes
• Cash ISA allowance cut from £20,000 to £12,000, with £8,000 required in stocks & shares ISAs.
• Dividends, rental income and savings tax rates rise by 2 percentage points except that the additional rate of tax on dividends remains the same at 39.35%. - Property taxes
A “mansion tax” will apply to homes worth £2 million or more, costing £2,500–£7,500 annually, with effect from 1 April 2028, based on property values in 2026. - EV mileage tax
From April 2028, electric vehicles will incur a 3p per mile tax, indexed to inflation. Hybrid electric vehicles will have a 1.5p per mile tax. - State Pension & minimum wage
The State Pension rises by 4.8% under the triple lock, bringing the full new pension to £241.30 per week. Minimum wage increases will benefit workers but may push more into higher tax brackets due to frozen thresholds. - Childcare & welfare
The two-child benefit cap will be scrapped from April, costing £2.3 billion and aiming to reduce child poverty. - Capital gains tax
With effect from today, disposals of shares in trading companies to an employee share ownership trust which have been capital gains tax free because of 100% relief, will now only be relieved at 50% - Inheritance tax
The new £1 million exempt amount for assets qualifying for agricultural property relief or business property relief will be transferable between spouses and civil partners when it comes into effect in April 2026