2025 UK Autumn Budget Summary
Today, Wednesday 26 November 2025, the government set out its latest Autumn Budget, with Chancellor Rachel Reeves outlining how Labour intends to manage the public finances over the coming year. The message was clear: the government wants to raise more revenue and tighten the rules around compliance, while trying to shield ordinary earners from direct tax increases.
Income tax rates have been left alone, there were no major surprises for everyday savers, and the feared overhaul of property taxation turned out to be less dramatic than anticipated.
Reeves explained that the Budget is designed to repair the public finances and create a more stable economic backdrop. While she repeated her commitment not to raise taxes on people earning typical wages, she did introduce new or higher charges in areas the government considers less economically sensitive. These include changes affecting investment income, higher-value properties, certain business activities and a range of products linked to health and lifestyle.
Capital Gains Tax, which had been the subject of intense speculation, avoided the sweeping reform some expected. Changes have been introduced, but the headline rate for residential property remains untouched.
You can find a summary of the key measures from the 2025 Autumn Budget below, along with an explanation of how they may affect you or your business.
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Businesses
- Corporation Tax and VAT rates are unchanged
- From April 26, any unused £1 million allowance for the 100% rate of agricultural property relief and business property relief will be transferable between spouses and civil partners.
- Reduction in ‘main rate’ Writing Down Allowances from 18% to 14% from April 26
- Introduction of new first-year allowance of 40% for ‘main-rate assets’ from 1 January 2026, does not apply to second-hand assets or cars
- Minimum Wage/Living Wage increases from April 2026:
- Apprentices from £7.55 to £8
- 18-20 year olds from £10 to £10.85
- Over 21 from £12.21 to £12.71
- “Salary sacrifice” pension contributions above £2,000 will be liable to employee and employer National Insurance from April 2029. Any contributions above £2,000 will still get tax relief.
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Individuals
- Freeze on Income Tax & National Insurance thresholds for a further three years until April 2031, this will mean more people will find themselves in the higher bands over time.
- A 2% tax rate increase on dividends, savings and rental income from April 2027.
- Plan 2 student loan repayment thresholds will be frozen from 2027-28 until 2029-30
- The yearly ISA limit is still £20,000, but from April 2027 anyone under 65 will have to put at least £8,000 of it into a non-cash ISA, like a stocks and shares ISA.
Removal of the two-child limit on the “child element” of Universal Credit (UC) from April 2026- A new mileage tax for electric vehicles from April 2028. The charge will equal 3p per mile for battery electric cars and 1.5p per mile for plug-in hybrid cars. This means an electric car driver travelling 8,500 miles per annum will have an additional £255 charge.
- Fuel duty to remain frozen until September 2026.
- In April 2026, the State Pension will increase by 4.8%.
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National Living Wage Changes From April 2026
