Budget Summary – 2025
Chancellor Rachel Reeves delivered her long-anticipated Autumn Budget on Wednesday 26 November 2025
Chancellor of the Exchequer Rachel Reeves set out tax-raising measures worth up to £26 billion in the Autumn Budget.
The increases will be achieved through a catalogue of measures and various actions.
We have reviewed the measures that could affect you and your business, you may need some support with these upcoming changes, at Aston Shaw we are here to guide you through.
ISAs
Effective date: April 2027
The ISA allowance is to remain at £20,000 a year however £12,000 is the cap for Cash ISA’s for under 65-year-olds. The remaining £8,000 is reserved for investments.
Over-65s, will be eligible to contribute £20,000 into Cash ISAs per year.
Tax Rates
Effective date: April 2026 & April 2027
Tax rates will be increased by 2 percentage points in relation to property, dividend and savings income.
Dividend rates increase by two percentage points from April 2026 to 10.75% at the lower rate and 35.75% at the higher rate while the additional rate remains unchanged at 39.35%.
Property income and saving income tax rates apply from April 2027 at 22% for basic rate, 42% at higher rate and 47% for additional rates.
Wages
Effective date: April 2026
The chancellor confirmed increases in April to the minimum wages.
Legal minimum wage for over-21s to rise 4.1% from £12.21 to £12.71 per hour. Wages for 18 to 20-year-olds will increase by 8.5%, from £10.00 to £10.85 per hour.
For those aged 16 or 17, the minimum wage will rise to £8.00 an hour, up from £7.55.
The separate apprentice rate which applies to eligible people under 19 years or those over 19 years in the first year of an apprenticeship will also increase to £8.00 an hour, from £7.55.
Sacrifice
Effective date: April 2029
Salary-sacrificed pensions above £2,000 will no longer be exempt from employee and employer contributions.
This means employee and employer's NIC’s will be due on salary-sacrifice pension contributions over the £2,000 threshold. Ordinary employer pension contributions will remain exempt from NICs.
Electric Vehicle Excise Duty
Effective Date: April 2028
Rachel Reeves announced that a new Electric Vehicle Excise Duty will be introduced from April 2028. The duty will be charged at 3p per mile for electric cars and 1.5p per mile for hybrid cars.
This tax change will add an additional cost for electric vehicle drivers.
Inheritance Tax
Effective Date: April 2026
The Chancellor announced that Agricultural Property Relief and Business Property Relief—each with a £1,000,000 allowance—will become transferable to a spouse or civil partner upon death.
This measure offers welcome reassurance to farmers and business owners concerned about last year’s budget changes, which increased inheritance tax liabilities.
Business Rates
Effective Date: April 2026
The Chancellor announced changes to business rates, including a reduction in the rates multiplier for businesses in the retail, hospitality, and leisure sectors. There will also be an increase in business rates for businesses operating from high-value properties.
Businesses in the retail, hospitality, and leisure sectors will welcome the reduction in their business rates liabilities.
EOT – Employee Ownership Trusts
Effective Date: November 2025:
The capital gains tax relief on disposals of shares to an Employee Ownership Trust will be reduced from 100% of the disposal proceeds to 50%
This change represents a significant tax increase for business owners looking to exit their business while transferring ownership to their employees.
How can Aston Shaw support you?
At Aston Shaw, our dedicated tax advisors are here to support you and your business and guide you through what the Autumn Budget means for you step-by-step. We will remove the worry regarding managing your taxes and as we are not limited to any specific sector, we have a breadth of knowledge that will suit you and your specific business.
Contact us
We are only an email or telephone call away, email us at taxadvisory@astonshaw.co.uk or call us on 01603 616300, we will be delighted to advise and help.