Tax

Autumn Budget

2025

Putting the

pieces together

Economy
Net deficit amounts (Net deficit) / Surplus 2026/27 – (£28.8) billion 2027/28 – (£4.6) billion 2028/29 – £3.9 billion 2029/30 – £21.7 billion 2030/31 – £24.6 billion The OBR has forecast growth for our economy in each of the next five years, with an overall downgrade from 2026 onwards as follows: 2025 – 1.5% (0.5% higher than expected) 2026 – 1.4% 2027 – 1.6% 2028 – 1.5% 2029 – 1.5% % debt to GDP 2027/28: 83.6% 2028/29: 83.7% 2029/30: 83.0% 2030/31: 82.2% 0.4% fall in inflation by next year.
Spending
£300 million will be invested in 350 new neighbourhood health centres and new technology. Two-child benefit cap lifted in full from April 2026.

Tax Measures
ISA reform – from April 2027 full £20,000 allowance retained but £8,000 restricted to stocks and shares ISAs. Over 65s will retain £20,000 full cash allowance. Corporation tax rates to remain unchanged and full expensing for new plant and equipment is to stay. Income tax and employer NIC thresholds to be frozen for a further three years until end of 2030/31 – a year longer than was expected. Voluntary Class 2 National Insurance Contributions to be abolished for individuals living abroad. Income tax rates to increase by 2% on savings, dividend and property income. Inheritance tax individual £1 million 100% relief allowance (introduced from April 2026) to be transferable between spouses. Salary-sacrificed pension contributions above an annual £2,000 threshold will no longer be exempt from National Insurance with effect from April 2029. Annual mansion taxes: high value council tax surcharge of £2,500 for properties over £2 million rising to £7,500 for properties over £5 million. Relief on CGT for sale of shares to EOTs reducing to 50% from current 100%. A new mileage based tax on electric vehicles will be introduced from April 2028 at 3p per mile for EVs and 1.5p for plug in hybrids. Fuel duty to be frozen at its current rate until September 2026. National living wage increased to £24,784.50 per annum for a full time worker. Energy bills – cuts to green levies will save on average £150 per household from April 2026.

Tax Measures

ISA reform – from April 2027 full £20,000 allowance retained but £8,000 restricted to stocks and shares ISAs. Over 65s will retain £20,000 full cash allowance.
Corporation tax rates to remain unchanged and full expensing for new plant and equipment is to stay.
Income tax and employer NIC thresholds to be frozen for a further three years until end of 2030/31 – a year longer than was expected.
Voluntary Class 2 National Insurance Contributions to be abolished for individuals living abroad.
Income tax rates to increase by 2% on savings, dividend and property income.
Inheritance tax individual £1 million 100% relief allowance (introduced from April 2026) to be transferable between spouses.
Salary-sacrificed pension contributions above an annual £2,000 threshold will no longer be exempt from National Insurance with effect from April 2029.
Annual mansion taxes: high value council tax surcharge of £2,500 for properties over £2 million rising to £7,500 for properties over £5 million.
Relief on CGT for sale of shares to EOTs reducing to 50% from current 100%.
A new mileage based tax on electric vehicles will be introduced from April 2028 at 3p per mile for EVs and 1.5p for plug in hybrids.
Fuel duty to be frozen at its current rate until September 2026.
National living wage increased to £24,784.50 per annum for a full time worker.
Energy bills – cuts to green levies will save on average £150 per household from April 2026.