Today, the Chancellor, Rachel Reeves, delivered the government’s Autumn Budget 2025.
Key points include:
- The Office for Budget Responsibility (OBR) expects the UK economy to grow by 1.5% this year, an increase from its 1% projection made in March.
- Inflation is forecast to average 3.5% over the year, then ease to 2.5% in the following year, before reaching the government’s 2% target in 2027.
Personal taxation
- National Insurance (NI) and income tax thresholds will remain frozen for an additional three years beyond 2028, gradually pulling more people into higher tax bands.
- The amount under-65s can pay into cash ISAs each year will be limited to £12,000 from April 2027, with the remainder of the £20,000 allowance reserved for investment products.
- Basic and higher tax rates applied to property, savings and dividend income will rise by 2% from April 2027.
- The additional £1 million Agricultural Property Relief / Business Property Relief allowance will be transferable between spouses.
Wages and pensions
- The statutory minimum wage for workers aged 21 and over will increase by 4.1% in April, moving from £12.21 to £12.71 an hour from April 2026.
- Also in April 2026, pay for 18- to 20-year-olds will rise by 8.5%, going from £10 to £10.85 an hour, as part of a move toward a single adult rate.
- Basic and new state pension rates will increase by 4.8% from April 2026, above current inflation, under the “triple lock.”
- From April 2029, people contributing to pensions through salary-sacrifice arrangements will begin paying NI on contributions above £2,000 a year.
Property
- In England from April 2028, properties valued at more than £2m will be subject to a council tax surcharge of £2,500–£7,500, following a revaluation of homes in bands F, G, and H.
Business
- An expansion of schemes designed to support entrepreneurial investment is planned
- Three-year stamp duty holiday for new debut companies on the London market to attract listing candidates.
- Capital gains tax relief on disposals to employee ownership trusts will decrease from 100 per cent to 50 per cent from today.
- Funding will be made available to ensure that apprenticeships are free for SMEs.
- A consultation will be launched aimed at boosting the UK’s appeal to entrepreneurs.
- Businesses will benefit from a 40% allowance enabling them to offset a greater share of their initial investment costs.
- From April 2026, business rates will be reduced permanently for 750,000 firms in retail, hospitality and leisure, funded by higher charges on properties valued above £500,000 that are used by large “warehouse” operators. A total of £4.3bn will be provided to help properties facing significant bill increases.
- Tax exemption for small packages from overseas retailers worth under £135 will be scrapped from 2029.
Hospitality
- English regional mayors to be given powers to tax overnight stays in hotels and holiday lets.
At B P Collins, we analyse the latest announcements and highlight the key implications and opportunities for you and your business to help you plan ahead. For any further information, please contact our teams at enquiries@bpcollins.co.uk or call 01753 889995.
