{"id":410,"date":"2025-12-17T10:13:18","date_gmt":"2025-12-17T10:13:18","guid":{"rendered":"https:\/\/www.unbiasedfinancialgroup.co.uk\/blog\/?p=410"},"modified":"2025-12-17T10:15:25","modified_gmt":"2025-12-17T10:15:25","slug":"autumn-budget-2025","status":"publish","type":"post","link":"http:\/\/www.unbiasedfinancialgroup.co.uk\/blog\/2025\/12\/17\/autumn-budget-2025\/","title":{"rendered":"Autumn Budget 2025"},"content":{"rendered":"\n<p><strong><u>Income Tax<\/u><\/strong><\/p>\n\n\n\n<ul>\n<li>The Income Tax <strong>personal allowance<\/strong> remains <strong>\u00a312,570<\/strong>, the <strong>basic rate band<\/strong> remains <strong>\u00a337,700<\/strong>, and&nbsp;the higher-rate threshold stays at <strong>\u00a350,270<\/strong>. The <strong>additional-rate threshold<\/strong> remains <strong>\u00a3125,140<\/strong>. These bands are now frozen <strong>until April 2031<\/strong>.<\/li>\n\n\n\n<li>Your personal allowance is still reduced by <strong>\u00a31 for every \u00a32 of income over \u00a3100,000<\/strong> \u2013 so it is fully lost once income reaches \u00a3125,140.<\/li>\n\n\n\n<li>Headline <strong>income tax rates<\/strong> on employment and pension income are unchanged at <strong>20% \/ 40% \/ 45%<\/strong>. Only the thresholds are frozen (the \u201cstealth tax\u201d).<\/li>\n<\/ul>\n\n\n\n<p><strong><u>ISAs &amp; Tax-Free Savings<\/u><\/strong><\/p>\n\n\n\n<ul>\n<li>For <strong>2026\/27<\/strong>, the general allowances remain:\n<ul>\n<li><strong>Overall ISA allowance:<\/strong> \u00a320,000<\/li>\n\n\n\n<li><strong>Junior ISA (JISA):<\/strong> \u00a39,000<\/li>\n\n\n\n<li><strong>Child Trust Fund:<\/strong> \u00a39,000<\/li>\n\n\n\n<li><strong>Lifetime ISA:<\/strong> \u00a34,000 (excluding the government bonus); a consultation is planned on a replacement first-time buyer product, but no immediate changes to existing LISAs).<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Cash ISA changes from April 2027<\/strong>.\n<ul>\n<li><strong>Overall \u00a320,000 ISA limit remains.<\/strong><\/li>\n\n\n\n<li>For those aged <strong>under 65<\/strong>, the <strong>maximum that can go into a <\/strong><em><strong>cash<\/strong><\/em><strong> ISA<\/strong> each year will fall to <strong>\u00a312,000<\/strong>.<\/li>\n\n\n\n<li>The <strong>remaining \u00a38,000<\/strong> (if you use the full \u00a320,000) will need to go into <strong>stocks &amp; shares<\/strong> and\/or <strong>innovative finance ISAs<\/strong>.<\/li>\n\n\n\n<li>For those <strong>aged 65 or over within the tax year of subscription<\/strong>, the <strong>\u00a320,000 cash ISA allowance is preserved<\/strong>.<\/li>\n\n\n\n<li>These rules apply <strong>only to new contributions from April 2027<\/strong>, not to money already in ISAs.<\/li>\n\n\n\n<li>Transfers <strong>from stocks &amp; shares \/ innovative finance ISAs into cash ISAs will no longer be permitted<\/strong> (cash-to-cash transfers remain allowed), and <strong>cash held inside non-cash ISAs may be subject to a new tax charge<\/strong> if parked indefinitely.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p><strong><u>Pensions<\/u><\/strong><\/p>\n\n\n\n<ul>\n<li><strong>State Pension<\/strong>\n<ul>\n<li>The government has <strong>re-committed to the triple lock<\/strong> for this Parliament.<\/li>\n\n\n\n<li>Both the <strong>new<\/strong> and <strong>basic<\/strong> State Pension will rise by <strong>4.8%<\/strong> from <strong>April 2026<\/strong> (driven by earnings growth).<\/li>\n\n\n\n<li>The Chancellor has also confirmed that people whose <strong>only income is the State Pension<\/strong> will <strong>not be brought into income tax<\/strong> during this Parliament, even as the State Pension edges above the frozen personal allowance.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Private pensions \u2013 allowances &amp; salary sacrifice<\/strong>\n<ul>\n<li>The <strong>Annual Allowance<\/strong> remains at <strong>\u00a360,000<\/strong> and the <strong>threshold income<\/strong> for tapering remains at <strong>\u00a3200,000<\/strong>.&nbsp;<\/li>\n\n\n\n<li>From <strong>April 2029<\/strong>, a new <strong>\u00a32,000 cap on National Insurance-free salary sacrifice into pensions<\/strong> will apply:\n<ul>\n<li>Salary sacrifice pension contributions <strong>above \u00a32,000 per year<\/strong> will attract <strong>both employer and employee NI<\/strong>, collected via payroll.<\/li>\n\n\n\n<li>Contributions made via sacrifice will <strong>still count towards reducing \u201cadjusted net income\u201d<\/strong>, so they can continue to help with things like restoring Child Benefit or the Personal Allowance.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Pensions and Inheritance Tax (IHT) from April 2027<\/strong>\n<ul>\n<li>From <strong>6 April 2027<\/strong>, <strong>most unused pension funds and pension death benefits will fall within the taxable estate for IHT purposes<\/strong>, even where trustees\/administrators have discretion.<\/li>\n\n\n\n<li><strong>Death-in-service benefits<\/strong> from registered schemes will <strong>remain outside the estate<\/strong>.<\/li>\n\n\n\n<li>Personal representatives will be able to ask scheme administrators to <strong>withhold up to 50% of taxable pension benefits for up to 15 months after death<\/strong> to cover potential IHT and interest.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p><strong><u>Savings, Dividends &amp; Capital Gains<\/u><\/strong><\/p>\n\n\n\n<ul>\n<li><strong>Dividend tax<\/strong> (outside ISAs)\n<ul>\n<li>From <strong>April 2026<\/strong>, the <strong>ordinary (basic-rate)<\/strong> dividend tax rises from <strong>8.75% to 10.75%<\/strong>, and the <strong>upper (higher-rate)<\/strong> from <strong>33.75% to 35.75%<\/strong>.<\/li>\n\n\n\n<li>The <strong>additional rate<\/strong> remains at <strong>39.35%<\/strong>.<\/li>\n\n\n\n<li>The <strong>Dividend Allowance stays at \u00a3500<\/strong> per person, per tax year.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Savings and rental \/ property income<\/strong> (non-dividend)\n<ul>\n<li>From <strong>April 2027<\/strong>, tax on <strong>savings income<\/strong> (e.g. bank\/building society interest) and <strong>property income<\/strong> (e.g. rental income from second properties) increases by <strong>2 percentage points<\/strong> to <strong>22% \/ 42% \/ 47%<\/strong> for basic \/ higher \/ additional-rate taxpayers.<\/li>\n\n\n\n<li>The <strong>Personal Savings Allowance<\/strong> is unchanged (<strong>\u00a31,000<\/strong> for basic-rate, <strong>\u00a3500<\/strong> for higher-rate; none for additional-rate).<\/li>\n\n\n\n<li>The <strong>Property Allowance<\/strong> remains at <strong>\u00a31,000<\/strong> per year.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Capital Gains Tax (CGT)<\/strong>\n<ul>\n<li><strong>No changes<\/strong> were made to CGT rates in this Budget.<\/li>\n\n\n\n<li>The <strong>annual exempt amount<\/strong> remains <strong>\u00a33,000<\/strong> for individuals and personal representatives, and <strong>\u00a31,500<\/strong> for most trusts for <strong>2026\/27<\/strong>, with main CGT rates staying at <strong>18% \/ 24%<\/strong> (residential property) and other existing rates unchanged.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p><strong><u>Inheritance Tax (IHT)<\/u><\/strong><\/p>\n\n\n\n<ul>\n<li>The <strong>IHT nil-rate band (NRB)<\/strong> stays at <strong>\u00a3325,000<\/strong> and the <strong>residence nil-rate band (RNRB)<\/strong> at <strong>\u00a3175,000<\/strong>, with both now <strong>frozen until at least April 2031<\/strong>, in line with income tax and NIC thresholds.<\/li>\n\n\n\n<li><strong>Business Property Relief (BPR)<\/strong> and <strong>Agricultural Property Relief (APR)<\/strong> will continue to benefit from the 100% IHT relief up to a limit of \u00a31 million. Business property in excess of the limit will benefit from a 50% relief. the \u00a31 million allowance is to be transferable between spouses\/civil partners if unused on first death.<\/li>\n\n\n\n<li><strong>Gifts out of normal expenditure<\/strong> and other lifetime exemptions remain unchanged \u2013 regular gifts from surplus income and use of the nil-rate band every 7 years continue to form the core of standard IHT planning.<\/li>\n\n\n\n<li><strong>Charity exemption tightened<\/strong>\n<ul>\n<li>IHT relief for charitable gifts will, from <strong>26 November 2025 \/ 6 April 2026 (depending on the event)<\/strong>, be <strong>restricted to gifts made directly to UK charities and Community Amateur Sports Clubs (CASCs)<\/strong>.<\/li>\n\n\n\n<li>Gifts to trusts that do not themselves qualify as UK charities or CASCs will <strong>no longer be exempt from IHT<\/strong>.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p><strong><u>Employment &amp; National Insurance<\/u><\/strong><\/p>\n\n\n\n<ul>\n<li>For <strong>2025\/26<\/strong>:\n<ul>\n<li><strong>Class 1 employee NICs:<\/strong> 8% (main rate) and 2% (upper rate).<\/li>\n\n\n\n<li><strong>Employer NICs:<\/strong> 15%.<\/li>\n\n\n\n<li>The <strong>Secondary Threshold<\/strong> \u2013 the point at which employers start paying NICs \u2013 is effectively equivalent to <strong>\u00a35,000 per year<\/strong> per employee (via a reformed system and updated Employment Allowance rules).<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>For the <strong>self-employed<\/strong>:\n<ul>\n<li><strong>Class 4 NICs<\/strong> are <strong>6% and 2%<\/strong> for <strong>2025\/26 and 2026\/27<\/strong>.<\/li>\n\n\n\n<li>Access to contributory benefits (including State Pension) continues via <strong>Class 2 credits<\/strong> where profits are above <strong>\u00a36,845<\/strong>, without a separate Class 2 payment.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>The <strong>National Living Wage \/ minimum wage<\/strong> has risen, for example to <strong>\u00a310.85 per hour for 18\u201320-year-olds<\/strong> from April 2026.<\/li>\n<\/ul>\n\n\n\n<p>&nbsp;<br><strong><u>Corporation Tax &amp; Business Owners<\/u><\/strong><\/p>\n\n\n\n<ul>\n<li><strong>Corporation Tax<\/strong>\n<ul>\n<li>The <strong>main rate remains 25%<\/strong> for profits over <strong>\u00a3250,000<\/strong>.<\/li>\n\n\n\n<li>The <strong>small profits rate<\/strong> remains <strong>19%<\/strong> for profits up to <strong>\u00a350,000<\/strong>.<\/li>\n\n\n\n<li>Profits between <strong>\u00a350,001 and \u00a3250,000<\/strong> attract marginal relief, giving a gradual rise in the effective rate between 19% and 25%.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>VCTs and EIS<\/strong>\n<ul>\n<li>From <strong>6 April 2026<\/strong>, <strong>Venture Capital Trust (VCT)<\/strong> income tax relief on new subscriptions falls from <strong>30% to 20%<\/strong>, though annual and company investment limits are being increased.<\/li>\n\n\n\n<li><strong>EIS<\/strong> keeps its <strong>30% income tax relief<\/strong>, while also benefiting from wider availability and higher company size limits.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p>&nbsp;<br><strong><u>Property &amp; \u201cMansion Tax\u201d<\/u><\/strong><\/p>\n\n\n\n<ul>\n<li><strong>Landlords \/ rental income<\/strong>\n<ul>\n<li>From <strong>April 2027<\/strong>, tax on <strong>property income<\/strong> rises by <strong>2 percentage points<\/strong> across basic \/ higher \/ additional rates (22% \/ 42% \/ 47%), as above. This is explicitly framed as aligning the tax on rental income more closely with earned income.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>High Value Council Tax Surcharge (HVCTS) \u2013 England only<\/strong>\n<ul>\n<li>From <strong>April 2028<\/strong>, there will be a new <strong>High Value Council Tax Surcharge<\/strong> on <strong>owner-occupied residential properties valued at over \u00a32 million in England<\/strong>.<\/li>\n\n\n\n<li>The current design is:\n<ul>\n<li><strong>\u00a32,500 per year<\/strong> for properties worth <strong>\u00a32m &#8211; \u00a32.5m, \u00a33,500 worth between \u00a32.5m- \u00a33.5m, \u00a35,000 worth between \u00a33.5m &#8211; \u00a35m and \u00a37,500 above \u00a35m.<\/strong><\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>Valuations will be based on prices as at <strong>April 2026<\/strong>, with charges indexed to CPI from <strong>2029\/30<\/strong> onwards.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p><strong><u>Benefits &amp; Family Support<\/u><\/strong><\/p>\n\n\n\n<ul>\n<li><strong>Two-child benefit cap scrapped<\/strong>\n<ul>\n<li>From <strong>April 2026<\/strong>, the <strong>two-child limit on Universal Credit and Child Tax Credit<\/strong> is removed. Families can claim support for <strong>all children<\/strong>, which the government estimates will lift around <strong>450,000 children out of poverty by 2030<\/strong>.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>High Income Child Benefit Charge (HICBC)<\/strong>\n<ul>\n<li>The Budget <strong>makes no further changes<\/strong> to HICBC, but earlier reforms (from <strong>April 2024<\/strong>) still apply:\n<ul>\n<li>Charge starts at <strong>\u00a360,000 of adjusted net income<\/strong>.<\/li>\n\n\n\n<li>It withdraws <strong>1% of Child Benefit for every \u00a3200<\/strong> of income between <strong>\u00a360,000 and \u00a380,000<\/strong>, so Child Benefit is fully clawed back at <strong>\u00a380,000<\/strong>.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Winter Fuel Payment \/ Pension Age Winter Heating Payment<\/strong>\n<ul>\n<li>The Winter Fuel Payment has been restored to most pensioners, but with a <strong>\u00a335,000 taxable income threshold<\/strong>: if total income exceeds this, the payment is effectively <strong>clawed back via the tax system<\/strong>. The Budget confirmed that this <strong>\u00a335,000 threshold will be maintained for the rest of this Parliament<\/strong>.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Energy bills<\/strong>\n<ul>\n<li>From <strong>April 2026<\/strong>, green levies on energy bills are being reduced\/reshaped, cutting the typical bill by around <strong>\u00a3150 a year<\/strong>.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p><strong><u>Motoring &amp; Electric Vehicles<\/u><\/strong><\/p>\n\n\n\n<ul>\n<li><strong>Fuel duty<\/strong>\n<ul>\n<li>Fuel duty remains <strong>frozen until September 2026<\/strong>, with the temporary 5p cut being gradually reversed thereafter.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Electric Vehicle Excise Duty (eVED)<\/strong>\n<ul>\n<li>From <strong>April 2028<\/strong>, a new <strong>mileage-based Electric Vehicle Excise Duty (eVED)<\/strong> will apply to <strong>battery electric and plug-in hybrid cars<\/strong>:\n<ul>\n<li><strong>3p per mile<\/strong> for pure electric vehicles.<\/li>\n\n\n\n<li><strong>1.5p per mile<\/strong> for plug-in hybrids.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>This is on top of existing <strong>Vehicle Excise Duty (VED)<\/strong> and is expected to rise with CPI from <strong>2029<\/strong>.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Income Tax ISAs &amp; Tax-Free Savings Pensions Savings, Dividends &amp; Capital Gains Inheritance Tax (IHT) Employment &amp; National Insurance &nbsp;Corporation Tax &amp; Business Owners &nbsp;Property &amp; \u201cMansion Tax\u201d Benefits &amp; Family Support Motoring &amp; Electric Vehicles<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1,6,5,11,2,10,4,3,8,9],"tags":[],"_links":{"self":[{"href":"http:\/\/www.unbiasedfinancialgroup.co.uk\/blog\/wp-json\/wp\/v2\/posts\/410"}],"collection":[{"href":"http:\/\/www.unbiasedfinancialgroup.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.unbiasedfinancialgroup.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.unbiasedfinancialgroup.co.uk\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"http:\/\/www.unbiasedfinancialgroup.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=410"}],"version-history":[{"count":1,"href":"http:\/\/www.unbiasedfinancialgroup.co.uk\/blog\/wp-json\/wp\/v2\/posts\/410\/revisions"}],"predecessor-version":[{"id":411,"href":"http:\/\/www.unbiasedfinancialgroup.co.uk\/blog\/wp-json\/wp\/v2\/posts\/410\/revisions\/411"}],"wp:attachment":[{"href":"http:\/\/www.unbiasedfinancialgroup.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=410"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.unbiasedfinancialgroup.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=410"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.unbiasedfinancialgroup.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=410"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}