Autumn Budget 2025 - What does it mean for you?

The Budget 2025 has been announced, but what does that mean for Small business Owners and Individuals - lets explore the key take aways :

Sole Traders, Partnerships and Individuals

Income tax thresholds and bands frozen (and continue to be frozen until April 2031)
Income tax rates on dividend income rise from 8.75% to 10.75% (basic rate) and from 33.75% to 35.75% (higher rate); additional rate remains 39.35%
Confirmation of the introduction of Making Tax Digital for Income Tax Self-Assessment from April 2026, with easements for the first year in relation to filing penalties
Increases in National Living Wage and State pension in line with the September 2025 inflation figure (3.8%)
National minimum wages will increase from April 26 onwards :

Plan 2 Student Loan repayment thresholds frozen until April 2030
From April 2029, salary sacrifice schemes putting more than £2,000 into an employee’s pension will be charged to NIC as if cash salary was paid

Limited Company's and Employers : From April 2026

Income tax thresholds and bands frozen (and continue to be frozen until April 2031)
Income tax rates on dividend income rise from 8.75% to 10.75% (basic rate) and from 33.75% to 35.75% (higher rate); additional rate remains 39.35%
The same increase will apply to corporation tax payable on loans to close company participators which are not repaid to the company within 9 months of its year end
The basis for company car benefit charges increases by one percentage point for 2026/27
Benefit charges for company vans and private fuel in company vehicles increased
Employers’ NIC threshold frozen at £5,000, and NIC Upper Earnings Limit remains £50,270 (also frozen until 2031)
NIC Lower Earnings Limit and Small Profits Threshold increased by 3.8%
Writing down allowances on main rate expenditure cut from 18% to 14%, and on special rate expenditure from 6% to 3%, from 1 April 2026 (companies) or 6 April 2026 (unincorporated trades)
Extension until March 2027 of the 100% first year allowance for qualifying expenditure on zero-emission cars and charging points for electric vehicle
Corporation Tax late filing penalties doubled from 1 April 2026
CGT rate on disposals qualifying for Business Asset Disposal Relief increased from 14% to 18%
CGT relief on incorporation to be claimed from 6 April 2026, rather than applying automatically
VAT rules changed to prevent private hire vehicle operators using the ‘Tour Operators Margin Scheme’ to pay VAT only on their profit margin

Limited Company's and Employers : From Jan 2026

New 40% First Year Allowance for most ‘main rate expenditure’ which does not already qualify for ‘full expensing’ or the £1 million Annual Investment Allowance (e.g. assets for leasing and assets above £1 million bought by unincorporated businesses)
A new Advance Clearance Service to provide certainty for some R&D claims is to be introduced ‘in Spring 2026’ following consultation

From April 2027 - Property owners and savings income changes :

Income tax rates on property and savings income rise from 20% to 22% (basic rate), from 40% to 42% (higher rate), and from 45% to 47% (additional rate)
For under-65s, no more than £12,000 of the annual £20,000 ISA investment limit can be invested in a cash ISA; the other £8,000 will have to be in stocks and shares

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If you would like support on anything raised or to see how HPC Accountancy could support you and save you tax, get in touch today!

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