Autumn Budget 2025: What’s New and What It Means for You

The Autumn Budget 2025 has been announced, but the biggest question now is how the changes could affect your personal or business finances.

A budget announcement may seem like a set of government decisions, but the impact is often felt through everyday financial choices. Changes to tax rules, allowances and business costs can influence how you plan ahead and manage your obligations.

Whether you are reviewing your tax position or making future financial decisions, understanding the latest updates can help you stay prepared.

This guide explains the key Autumn Budget 2025 changes and the actions you should consider.

What Is the Autumn Budget 2025?

The Autumn Budget 2025 is the government’s main financial statement setting out its plans for taxation, public spending and economic policy. It explains changes that may affect individuals, businesses and employers across the UK.

The budget was delivered by Rachel Reeves, the Chancellor of the Exchequer, who set out the government’s approach to managing public finances while supporting economic priorities. In her Budget speech, Rachel Reeves stated that the measures were focused on providing stability, encouraging investment and supporting long-term economic growth. 

(Source: Budget 2025 speech – GOV.UK)

The Budget is accompanied by supporting documents published by HM Treasury, which explain how announced tax policies will be introduced through legislation, including relevant rates, thresholds and implementation dates. 

(Source: Budget 2025 — Overview of tax legislation and rates – GOV.UK)

The Government’s Perspective on Autumn Budget 2025

The government presented the Autumn Budget 2025 as a plan focused on strengthening economic stability, supporting investment and maintaining sustainable public finances.

The budget included measures designed to:

• Support economic growth
• Encourage investment
• Maintain public services
• Increase tax revenues where required

The overall impact depends on individual circumstances. A measure that increases costs for one taxpayer may have limited impact on another depending on income levels, business structure and financial decisions. 

(Source: Autumn Budget 2025 – GOV.UK)

Key Autumn Budget 2025 Changes

The budget introduced several tax changes that could affect individuals, businesses and employers. The key measures and their potential impact are outlined below.

1. Personal Tax Thresholds Remain Frozen

One of the biggest personal tax announcements was the extension of the freeze on income tax thresholds.

The main thresholds remain:

The freeze has been extended until 2030/31, meaning these thresholds will not increase in line with inflation or wage growth.

What does this mean?

Although tax rates may not increase, more people may gradually pay more tax as their income rises.

This can affect:

• Employees receiving salary increases
• Self-employed individuals with growing profits
• Company directors receiving dividends
• Individuals with savings or investment income

2. Savings Income Tax Rates Will Increase From April 2027

The budget confirmed changes to the taxation of savings income. From April 2027, savings income tax rates will increase by 2 percentage points:

The starting rate for savings remains available for eligible individuals.

Who could be affected?

This may affect individuals with significant:

• Bank interest
• Savings accounts
• Investment income

3. Dividend Tax Changes for Company Owners

Dividend taxation is particularly important for directors and shareholders who extract profits from companies. From April 2026, dividend tax rates will increase for non-additional rate dividends:

Impact on directors

Many small company owners use a combination of:

• Salary
• Dividends
• Pension contributions

to manage their personal tax position.

4. Corporation Tax Changes and Business Planning

For limited companies, Corporation Tax remains one of the most important areas to consider when planning finances.

The Autumn Budget 2025 confirmed that the existing Corporation Tax structure remains unchanged:

• Small Profits Rate: 19% for companies with profits up to £50,000
• Main Corporation Tax Rate: 25% for companies with profits above £250,000
• Marginal Relief: applies to companies with profits between £50,000 and £250,000

These thresholds continue to influence how companies plan their profits, investments and tax liabilities.

What does this mean for companies?

Businesses approaching these profit levels should consider:

• Timing of expenses and investments
• Capital expenditure planning
• Available tax reliefs
• Profit extraction strategies

5. National Insurance Changes and Employer Costs

Changes to National Insurance continue to be an important consideration for employers. From 6 April 2025, employer National Insurance contributions changed:

• Employer NIC rate increased from 13.8% to 15%
• Employer NIC threshold reduced from £9,100 to £5,000
• Employment Allowance increased to £10,500

The increase in Employment Allowance means eligible smaller employers may be able to offset some of the additional employer NIC costs.

Who is affected?

These changes mainly affect:

• Employers with employees
• Businesses planning to hire staff
• Companies with significant payroll costs

6. Savings Income Tax Changes

The budget also announced changes affecting savings income. From April 2027, tax rates on savings income will increase by 2 percentage points across all income tax bands:

Who may be affected?

This could impact individuals receiving:

• Bank interest
• Savings income
• Investment returns

Individuals with significant savings income should review whether their current savings and investment arrangements remain suitable.

7. Property Income Tax Changes

Property owners and landlords should also be aware of changes affecting property income. From April 2027, separate tax rates will apply to property income:

• Basic rate: 22%
• Higher rate: 42%
• Additional rate: 47%

Who could be affected?

This may impact:

• Residential landlords
• Individuals receiving rental income
• Property investors

8. Capital Gains Tax and Business Disposal Relief

Capital Gains Tax remains an important consideration for individuals selling assets.

This includes:

• Property
• Shares
• Investments
• Business interests

The budget confirmed changes to Business Asset Disposal Relief (BADR).

The BADR rate will increase:

• From 14% to 18% from April 2026

Who may be affected?

This could affect:

• Entrepreneurs selling businesses
• Shareholders disposing of qualifying business assets
• Business owners planning retirement

9. Inheritance Tax Changes

Inheritance Tax planning remains important for individuals with significant estates, property portfolios and business assets.

From April 2026:

• 100% relief will be capped at the first £1 million of qualifying assets
• A reduced relief rate will apply above this threshold

Who may be affected?

This may impact:

• Business owners
• Farmers
• Individuals passing wealth to future generations

10. High-Value Property and Mansion Tax Measures

The budget introduced a new High Value Council Tax Surcharge affecting properties valued above £2 million.

The measure is intended to address the difference between council tax paid by average homes and very high-value properties.

Who could be affected?

Owners of properties valued above the threshold should review:

• Property valuation
• Ownership structure
• Future property plans