This Autumn Budget 2025 review breaks down the key announcements and explores what they could mean for businesses, workers and employers.
The Chancellor’s Autumn Budget set out a range of significant tax, welfare, business and economic measures designed to address cost-of-living pressures while attempting to stabilise public finances. Below is a consolidated summary with a focus on the measures most relevant to individuals, employers, recruitment supply chains, umbrella companies and wider industry stakeholders.
Summary of Key Measures
- Taxation & Personal Finances
Income & Savings
- Dividend, property and savings income tax rates will rise by 2 percentage points from April 2026.
- Income Tax and National Insurance thresholds remain frozen until 2030–31, continuing the impact of “fiscal drag.”
ISA changes from April 2027
- Cash ISA allowance reduced from £20,000 to £12,000
- £8,000 allowance ringfenced for Stocks & Shares ISAs (no change for savers aged 65+)
- Student loan repayment threshold frozen for three additional years.
- Inheritance tax: 100% relief allowances can now be transferred between spouses, increasing financial planning flexibility.
National Minimum & Living Wage (from April 2026)
- 21+: £12.21 → £12.71
- 18–20: £10.00 → £10.85
- Under 18s / Apprentices: £7.55 → £8.00
Pensions
- From April 2029, salary sacrifice pension contributions above £2,000/year will no longer be exempt from National Insurance, impacting both employees and employers who use sacrifice arrangements to manage NI costs.
- Business & Investment
- Free apprenticeships for under-25s in SME organisations to boost skills and early-career employment.
- The EIS and VCT schemes are extended, preserving key tax incentives for early-stage business investment.
- Capital Gains Tax relief on sales to Employee Ownership Trusts reduced from 100% → 50%, making EOT transitions less generous.
- Writing Down Allowance (main rate) to fall from 18% to 14% from April 2026, reducing relief on plant and machinery investments.
- £13bn regional funding allocated to metro mayors for infrastructure, skills and business development.
- Business rates reform will:
- Permanently reduce rates for retail, hospitality and leisure,
- Funded by increased rates on commercial properties valued above £500,000.
- Remote gaming duty to rise sharply from 21% to 40% from April 2026.
3. Property, Housing & Vehicles
Tax & Property
- New high-value council tax surcharge (England):
- £2,500 per year for properties over £2m
- £7,500 per year for properties over £5m
Energy & Transport
- Green levies reduced, contributing to lower household energy bills.
- Fuel duty frozen until September 2026.
- Introduction of a per-mile tax for electric vehicles from 2026 (in addition to VED):
- £0.03 per mile for full EVs
- £0.015 per mile for plug-in hybrids
- Families & Public Services
- Two-child benefit cap removed from April 2026.
Education investment
– £5m for school libraries
– £18m for playground upgrades in England
- £300m for NHS technology and creation of 250 neighbourhood health centres.
- Prescription charges frozen.
- Rail fare prices frozen for the first time in 30 years.
- From April 2026, households benefit from an average £150 reduction in annual energy bills.
- £4.9bn redirected to the NHS following local government restructuring, including removing Police and Crime Commissioners.
- Economic Outlook
- Growth forecast for 2025 upgraded from 1% to 1.5%, though projections for the subsequent four years are downgraded, suggesting weaker medium-term prospects.
- Government maintains that the measures introduced will help ease the cost of living and drive inflation further down.
- Borrowing expected to fall annually, with fiscal headroom rising significantly from £9.9bn to £22bn.
- The total tax burden is projected to reach 38% of GDP by 2030, the highest in modern records.
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