The 2025 Autumn Statement has taken more of a scattergun approach to raising revenue than last year’s more targeted assault on business. As expected from all the leaks, this budget has affected many different areas. Five of the main takeaways are below but the wide-ranging approach will mean that many are affected in different ways.
- Income Tax – Individuals will see higher rates of tax on savings and property income. This is the single largest change to individuals with dividend rates of income tax changing in April 2026 and the 2% increase to income tax applying to savings income and rental income from April 2027.
- Vehicles – Pay per mile for VED (road tax) will arrive in April 2028 for plug in electric and hybrid vehicles but, in the meantime, the electric car grants and tax benefits have been extended and the Expensive Car supplement will apply over £50,000 on new electric cars
- Mansion Tax – Those with residential properties worth at least £2m will see a ‘mansion tax’ apply from April 2028 as a ‘High Value Council Tax Surcharge’ although notably in England with the devolved administrations to consider their own levies.
- Businesses and employers – The £2,000 cap on salary sacrifice NIC treatment will increase employer and employee NIC from April 2029. The increase to the minimum wage will impact many businesses, particularly those employers with younger employees with an increase of 8.5% for 18-20 year olds. The Government has announced changes to business rates that will benefit those with retail, hospitality and leisure properties rated under £500,000, see higher multipliers for those with more valuable properties and see revaluations to the 2023 property values with an expected overall increase in tax.
- Inheritance Tax – The Inheritance Tax treatment of Business and Agricultural property will benefit from a transferrable allowance between spouses and civil partners – allowing a combined £2m allowance rather than £1m each. This may make planning simpler for some but may still require planning around the Residence Nil Rate Band. Family members of those affected by the infected blood scandal will see some limited extension to the application of inheritance tax relief on these payments.
Written by Andrew Titmus, Partner & Head of Estate Planning at Parfitt Cresswell Solicitors.