Budget Summary 2025

Personal Tax

  • National Living Wage increased to £12.71 per hour from 1 April 2026 for those aged 21 and over. £10.85 per hour for those aged 18-20 and £8.00 for first year apprentices and those aged under 18 years of age.
  • No changes to personal tax thresholds, income tax or employee’s national insurance. Personal tax thresholds frozen until 2030/31 tax year.
  • Dividend tax to increase by 2% to from April 2026.
  • Income Property Tax – separate property tax introduced from April 2027 with rates of 22% basic rate, 42% higher rate and 47% for additional rate tax payers.
  • Savings income tax rates to increase by 2% from April 2027.
  • Salary Sacrifice pension contributions limited to £2,000 per annum from April 2029.
  • Cash ISA limit for under 65’s reduced to £12,000, remaining £8,000 for investments.Over 65’s remains at £20,000 Cash ISA limit.
  • Student Loan thresholds frozen for 3 years from April 2027.

Business Tax

  • A first-year allowance of 40% for main‑rate assets will be introduced from January 2026, cars, second-hand assets plus assets for leasing overseas will not be eligible.
  • Writing down allowances reduced to 14% from April 2026.
  • Business rates to be lower for retail, hospitality and leisure businesses.
  • Business asset disposal relief will increase from 14% to 18% from April 2026.

Electric Vehicles

  • Electric Vehicle Excise Duty (eVED) a new mileage supplement for electric (BEV) and plug in hybrids (PHEV) from April 2028: 3 pence per mile for fully electric and 1.5 pence per mile for plug in hybrids.
  • Electric car grant and funding for EV charging extended to 2029-30.
  • Expensive Car Supplement for zero emissions vehicles increased to £50,000 from April 2026.
  • 100% First Year Allowances for Corporation tax on zero emissions cars and charging points extended until 31 March 2027.

Other

  • High Value council tax charge for residential properties worth £2M+ from April 2028.
  • Fuel duty, 5p cut extended.
  • Tobacco and alcohol duty to rise.
  • Gambling duty increased from April 2026.
  • Rail and prescription prices frozen.
  • Customs Excise Duty payable on low value goods from April 2029.
  • Motability scheme to be reformed excluding premium cars.
  • Universal credit 2 child limit (CAP) removed from April 2026.

For the full details and supporting documents, please click on this link

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