Posted November 27, 2025

Whitesides 2026 Autumn Budget Update

On Wednesday, Rachel Reeves presented her 2025 Autumn Budget to Parliament. She described it as a budget for fair taxes, strong public services and a stable economy. We have highlighted some of the key announcements below.

Tax Rates and Thresholds

The freeze on income tax and NIC thresholds will be extended for a further 3 years, lasting until April 2031.

The basic and higher rates of tax on dividends will increase by 2% from April 2026 to 10.75% and 35.75% respectively. The additional rate will remain unchanged.

The rates of tax on property and savings income will increase by 2% from April 2027, rising to 22%, 42% and 47%.

Pensions

From April 2029, only the first £2,000 of contributions made through salary sacrifice schemes will be exempt from NICs. Any contributions above this amount will then be subject to employer and employee NICs. All contributions will remain exempt from income tax, and employer contributions will still be exempt from NICs.

Electric Vehicle Excise Duty

A new mileage charge for electric vehicles will be implemented from April 2028. The charge will be 3p per mile for battery electric cars, and 1.5p for plug-in hybrid cars. These rates are set to increase in line with inflation, and will be payable alongside vehicle excise duty.

High Value Council Tax Surcharge

Properties worth £2 million or more will be subject to an additional council tax surcharge from April 2028. The charge will begin at £2,500 a year on properties valued between £2 million and £2.5 million, rising to £7,500 a year for properties valued at £5 million or more.

ISAs

The overall ISA allowance will remain at £20,000 per year, but the limit for Cash ISAs will be reduced to £12,000 from April 2027. This change does not apply to anyone aged 65 or above.

Business Taxes

There are no changes to the rates of corporation tax, but the main writing down allowance rate will be reduced from 18% to 14% from April 2026. At the same time, a new 40% first-year allowance will be introduced for eligible main rate assets.

The government has also unveiled plans to fully fund SME apprenticeships for under-25

If you have any questions about the budget, or would like further information, please do not hesitate to get in touch.