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Posted by Julie on November 27th, 2025 • 0 Comments • Full article

The Chancellor of the Exchequer, Rachel Reeves, delivered the 2025 Autumn Budget yesterday (26 November).

Taxes, Pensions and Savings

NICs and Income Tax – National Insurance Contributions (NICs) and income tax thresholds will be frozen for another three years from 2028.
Salary Sacrifice Scheme – the tax-free amount put into a salary sacrifice scheme will be capped at £2,000 from April 2029.
Living Wage / Minimum Wage – National Living Wage will increase by 4.1% from April 2026 to £12.71 per hour. National Minimum Wage will increase for 18 to 20 year olds by 8.5% to £10.85 per hour.
Dividends, Property and Savings Income – the tax rates applied to dividends, property income, and savings income will increase by 2 percentage points.
Cash ISA limits reduced – From 6 April 2027, savers will be able to invest a maximum of £12,000 annually in a cash ISA. Individuals who are aged 65 or over can continue to invest at the current limit of £20,000 per year. The ISA limits will stay at the current thresholds of £20,000 overall, £4,000 for lifetime ISAs and £9,000 for junior ISAs until 5 April 2031.

Capital Allowances – From 1 April 2026 for corporation tax and 6 April 2026 for income tax, main rate writing-down allowances will reduce from 18% to 14%. The government will introduce a new 40% first year allowance (FYA) for main rate expenditure. The new FYA will be available for expenditure incurred from 1 January 2026.
Penalties for late filing of corporation tax returns – The rate will be doubled, so for example the penalty for a return being late will increase from £100 to £200.
Business rates – The budget includes a comprehensive package of changes to the business rates system, designed to reduce rates liabilities overall, with targeted relief for smaller companies and those operating in the retail, hospitality and leisure (RHL) industries.

Apprenticeships – training for under 25’s on apprenticeships will be made free for SMEs.

Electric Vehicles – a new vehicle excise duty for electric vehicles will be introduced from April 2028. This is a mileage charge at 3p per mile for electric cars and 1.5p for plug-in hybrids. The new system will be integrated into the existing vehicle excise duty (VED) process administered by the DVLA. Drivers will estimate their annual mileage when renewing their tax and pay the charge upfront or via monthly direct debit. These estimates will later be reconciled against odometer readings taken during MOTs or at other official service intervals.

Not budget related but worth mentioning. Companies House filing fees are increasing again from 1 February 2026. Examples of new fees are
- Incorporation digital filing fee £100
- Confirmation statement digital filing fee £50
- Voluntary strike off digital filing fee £13

The Institute of Chartered Accountants in England and Wales (ICAEW) has some excellent articles on the Budget if you want to look at it in detail: https://www.icaew.com/technical/economy/autumn-budget-2025

Thanks

Julie and Katie