Autumn Budget 2025 - How will it affect you? - GBH Law
The Chancellor Rachel Reeves delivered the 2025 Budget this week, setting out a range of measures that will affect individuals and businesses alike.
Here are some of the key points:
👛Increase to minimum wage but individuals may pay more tax
– Income tax thresholds will remain frozen until 2031, extending the freeze by a further three years. As wages rise, more people will find themselves moving into higher tax bands or having a larger proportion of their income taxed. This “fiscal drag” effect means that even without changes to tax rates, many taxpayers will see their overall tax burden increase.
– National Minimum Wage will increase (see our update earlier this week), benefitting up to 2.7million people but potentially increasing costs for employers.
– From April 2029, only the first £2,000 of employee pension contributions made through salary sacrifice will be exempt from employer and employee National Insurance Contributions.
🏠Property and investment income
– From April 2026, dividend tax will rise by two percentage points for basic and higher rate taxpayers.
– From April 2027, tax rates on property and savings income will increase to 22% (basic), 42% (higher) and 47% (additional).
-From April 2028, a new High-Value Council Tax Surcharge will apply to properties valued over £2m, charged at £2,500 to £7,500 depending on band. Valuations will be carried out by the Valuation Office in 2026 and reviewed every five years.
📈Business and investment measures
– Corporation tax remains at 25%, still the lowest headline rate in the G7.
– From April 2026, asset and investment limits for Venture Capital Trusts (VCTs) and the Enterprise Investment Scheme will double, although VCT income tax relief will reduce from 30% to 20%.
– Enterprise Management Incentive options will benefit from higher asset and employee thresholds and extended exercise periods of up to 15 years.
– Employee Ownership Trusts will see the CGT exemption on sales reduced to 50% with immediate effect.
💡Additional measures include:
– Company car tax rates will increase for the 2026/27 tax year for cars with zero emissions and emissions below 75g/km
– A new Electric Vehicle Excise Duty for electric and hybrid cars will be introduced in 2028, with drivers charged per mile
– The two-child benefit cap will be removed from April 2026
If you would like to discuss what the Budget means for you or your business, please do get in touch with a member of the GBH Law team on 01483 421 234 or email info@gbhlaw.co.uk