DPC’s Tax Director, Esther Hancock, shares her view on the Autumn Budget 2025.
Following weeks of speculation, Rachel Reeves delivered her first Budget on 26 November, outlining tax measures expected to raise £26 billion by 2029/30. Although the Budget included notable spending commitments – including increases to benefits, removal of the two-child cap and protection for the state pension, many of the tax changes place a growing strain on hardworking savers, property investors and owner-managed businesses.
A decade-long freeze on income tax thresholds until 2031 will push more individuals into higher tax brackets, while increases to tax on dividends, savings income and rental profits from 2027 will further impact those who have saved or invested for their future. Restrictions to ISA allowances and changes to salary sacrifice pension arrangements will also reduce the incentives to save for retirement.
Additional measures include a new high-value property council tax surcharge from 2028, road-usage duties for electric and hybrid vehicles, and tighter rules for non-UK residents with UK income. Adjustments to EIS, VCT and EMI schemes offer some encouragement for investment, though reductions in reliefs limit their benefit.
The OBR’s downgraded economic growth forecasts suggest these measures may slow economic progress and reduce disposable income over time. Landlords may face further pressure to increase rents to offset rising taxes and wage costs, while businesses are likely to see price increases driven by higher National Minimum Wage and NIC obligations.
Now is the time for proactive planning. Business owners should review remuneration strategies ahead of the dividend tax rise in April and assess the impact of wage increases on future budgets. Property investors are advised to calculate how the upcoming tax changes will affect their portfolios and consider how best to navigate the growing fiscal burden presented by this Budget.
