BUDGET AUTUMN 2025

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BUDGET AUTUMN 2025

Some bullet points from today’s budget:

Income Tax

  • 2% increase to the basic, higher, and additional rates of property income tax from April 2027. The new rates will be 22%, 42%, and 47% respectively.
  • Otherwise Income Tax thresholds frozen until 2030/2031

Holiday Lets

Regional mayors will gain powers to introduce an overnight visitor levy for

  • Airbnb
  • Serviced accommodation
  • Short-stay rooms
  • B&Bs and hotels

– watch out or a consultation on this

Council Tax

  • High Value Council Tax Surcharge to be introduced on properties valued over £2 million starting from April 2028. The surcharge ranges from £2,500 to £7,500 a year across bands F G and H

Business Rates

  • Lower multipliers for retail, hospitality, and leisure properties.
  • Apackage of transitional relief intended to cap increases following the 2026 revaluation.

National Insurance

  • Thresholds to be frozen
  • The freeze on the employer National Insurance Contributions (NICs) secondary threshold (which applies above the lower earnings limit) extended for a further three years until 2030-31.
  • Salary-sacrificed pension contributions above an annual £2,000 threshold will no longer be exempt from NICs. These contributions will become subject to both employer and employee NICs from April 2029

Savings

  • ISA cash element to be capped at £12,000
  • Balance up to £20,000 to be in investments

Benefits

  • LHA to remain frozen
  • 2 child benefit cap to be removed from 2026
  • Help to Save scheme, ( offers people on universal credit a bonus on savings) extended and expanded beyond 2027
  • Adjustment to how earnings are treated for Housing Benefit and Universal Credit claimants in supported housing and temporary accommodation

The Writing Down Allowance (WDA)

  • Main rate will reduce from 18% to 14% starting from April 2026.
  • Applicable to corporation tax paying companies and unincorporated businesses (sole traders) in the self-assessment regime for expenditures that do not qualify for full expensing, such as second-hand assets and cars.

Health

  • Prescription Charges frozen for another year (£9.90 per item)

Transport

  • Electric and plug-in hybrid vehicle owners to pay tax based on mileage from 2028
  • 5p “temporary” cut in fuel duty on petrol and diesel extended again, until September 2026
  • Regulated rail fares for journeys in England frozen next year
  • Premium cars to be excluded from Motability Scheme

Pensions

Basic and new state pension payments to go up by 4.8% from April

Wages

National Minimum Wage increases from April 2026:

  • Over-21s: £12.71 per hour
  • Ages 18–20: £10.85 per hour
  • Under-18s and apprentices: £8 per hour