Insights

On 26 November, the Labour government announced its second Budget which claimed to take the “fair and necessary choices” to deliver on the government’s promise of change including cutting the cost of living and cutting debt and borrowing.

Following much ongoing media speculation, the Chancellor of the Exchequer delivered the eagerly awaited Autumn Budget statement but not without it being overshadowed by the Office for Budget Responsibility releasing the measures early.

We set out below a summary of the main tax announcements but please speak to your usual Statura contact should you wish to discuss the content of this document in more detail or indeed the way in which the November Budget might affect your personal circumstances.

Personal taxes and National Insurance

Frozen thresholds and NI changes

• Income‑tax and National Insurance thresholds frozen to 2031 – Personal allowances and higher‑rate thresholds remain at current levels for an extra three years from April 2028, pulling more people into higher bands.
• Employer NI secondary threshold frozen – The earnings level at which employers start paying NICs will also stay fixed until April 2031.
• Abolition of voluntary Class 2 NICs for expatriates – From 6 April 2026 people living abroad will no longer be able to pay voluntary Class 2 NICs, closing a route to preserve benefit entitlements.
• Cap on salary‑sacrifice pensions – From 2029 only the first £2,000 of employer and employee pension contributions made through salary sacrifice will be exempt from NICs. Contributions above that threshold will be subject to both employer and employee NICs.

Taxes on dividends, savings and property income

• Higher rates for dividends – From 2026–27 the dividend ordinary rate rises from 8.75 % to 10.75 %, and the upper rate from 33.75 % to 35.75 %. The additional rate remains at 39.35 %.
• Separate property income tax bands – From 2027–28, property income will have its own bands: 22 % basic rate, 42 % higher rate and 47 % additional rate. Property income is not subject to NICs, so these new rates align tax treatment with other income.
• Savings income taxed more – Savings income tax rates will rise by two percentage points across all bands from 2027–28, matching the new property income rates.

Wealth and estate planning

Inheritance Tax (IHT)

• Transferable agricultural and business property relief – The unused portion of the £1 million 100 % rate allowance for agricultural property relief (APR) and business property relief (BPR) will be transferable between spouses and civil partners from 6 April 2026.
• Cap on excluded‑property trusts – A £5 million cap will apply over each 10‑year period to the value of assets that excluded‑property trusts can shelter before periodic charges arise. This change will be legislated in Finance Bill 2025‑26 and take effect from 6 April 2025.

Housing and property taxes

• High‑value council tax surcharge – Properties in England valued at £2 million or more will face a High Value Council Tax Surcharge from April 2028. Charges start at £2,500 per year and rise to £7,500 for homes worth over £5 million, payable by the owner rather than the occupier.
• The surcharge will be based on updated valuations to identify properties above the threshold, and is expected to raise about £0.4 billion annually.

Business and investment reliefs

• Corporation tax – The main rate remains at 25 %.
• First Year Allowance – A new 40 % First Year Allowance (FYA) applies to main‑rate capital expenditure, including most leased assets, from 1 January 2026. The FYA allows businesses to deduct 40 % of qualifying expenditure in the year of purchase. Writing‑down allowances on the main pool will reduce from 18 % to 14 % from 1 April 2026 for corporation tax and 6 April 2026 for income tax.
• Venture Capital Trust (VCT) and Enterprise Investment Scheme (EIS) – Company investment limits will double (e.g., from £5 million to £10 million for VCTs and from £12 million to £24 million under EIS) with higher limits for Knowledge Intensive Companies. However, VCT income tax relief for investors will fall from 30 % to 20 %.

Additional updates

• Voluntary class 2 NICs abolished for UK expats – As noted above, expatriates will lose the option to pay voluntary class 2 NICs from April 2026.
• Temporary non‑residence anti‑avoidance tightened – From 6 April 2026, distributions or dividends received from a close company during a period of temporary non‑residence will be fully chargeable to UK income tax, removing the current exemption for “post‑departure trade profits”.

Takeaway

The Autumn Budget 2025 continues the shift towards stealth taxation: rather than raising headline tax rates, the government freezes thresholds, caps reliefs and increases taxes on dividends, savings and property income. Homeowners of high‑value properties, individuals with significant investment or rental income, employers offering salary‑sacrifice pensions and expatriates will all face higher tax bills. At the same time, some reliefs (such as transferable APR/BPR allowances) and investment incentives (FYA and expanded VCT/EIS limits) offer planning opportunities.