Autumn Budget 2025 Tax Changes

1. Income Tax and National Insurance

The Budget keeps the main UK Income Tax rates at 20%, 40% and 45%, but the freeze on Income Tax and National Insurance thresholds is extended to April 2031. That means more people gradually move into higher tax bands or pay more NI through “fiscal drag” as their earnings rise.

For many employees, company directors and professionals, this means effective tax bills will increase over time even without a headline rate rise. Reviewing your mix of salary, dividends, bonuses and pension contributions becomes even more important.

Accusolve can support you with: Self-Assessment tax returns, income planning and director/shareholder remuneration strategies that reflect the new long-term freeze.

2. Higher Taxes on Dividends, Property and Savings

A core theme of Autumn Budget 2025 is to narrow the gap between how work and wealth are taxed. The government will raise tax rates on dividends, property and savings income by 2 percentage points, with changes phased in from April 2026 and fully in place by April 2027. Existing allowances (such as the Personal Savings Allowance and the remaining Dividend Allowance) will still protect many people with modest investment income.

2.1 Dividend tax

Dividend income for individuals will be taxed at higher rates once the reforms take effect, increasing the cost of extracting profits from owner-managed companies through dividends and affecting investors with significant share portfolios. The government’s stated aim is to reflect that dividend income is not subject to National Insurance in the same way as employment income.

For many small and medium-sized companies, the “optimal” mix of salary, dividends and pension contributions for directors may now change. Accusolve’s Corporation Tax and accounting services can help you reassess your profit extraction strategy.

2.2 Property income

Unincorporated landlords will have a separate set of tax rates for rental income from April 2027, with property income to be taxed at higher basic, higher and additional rates than standard earnings, and finance costs relieved at the new basic rate. This reinforces the trend of the past decade towards tighter tax treatment of buy-to-let and investment property income.

Accusolve already works with many UK and non-resident landlords on rental accounts, mortgage interest restrictions and UK Capital Gains Tax planning when disposing of properties.

2.3 Savings income

The Budget also raises tax rates on many forms of savings income by 2 percentage points, again on the basis that this income does not attract employee National Insurance contributions. Most people with small savings pots will still fall within allowances, but higher-balance savers will see larger tax charges, especially in combination with the new reduced Cash ISA allowance and other changes highlighted by consumer groups.

3. “Mansion Tax”: High Value Council Tax Surcharge

The Chancellor confirmed a new High Value Council Tax Surcharge on homes worth over £2 million – widely described as a modern “mansion tax”. Properties will fall into bands above £2m, with a flat annual surcharge starting at a few thousand pounds for homes just over £2m and rising to a higher figure for homes above £5m. The surcharge is expected to apply from April 2028, with a consultation on technical details (including reliefs and SPV-held properties) in early 2026.

For owners of London and South East prime property, or those with multiple high-value homes, this surcharge comes on top of existing Council Tax, Stamp Duty Land Tax and CGT on disposals, increasing the long-term cost of holding such properties.

Accusolve can help you model these changes as part of broader CGT, inheritance tax and wealth-planning strategies.

4. Capital Gains Tax (CGT)

The Autumn Budget 2025 does not radically change CGT rates, but comes after earlier cuts to the CGT annual exemption and sits alongside the new council tax surcharge on high-value homes. Together, these measures increase the importance of planning the timing and structure of disposals for shares, businesses and property.

The existing requirement to report and pay CGT on UK residential property disposals within 60 days continues to apply for UK-resident and non-resident sellers alike. Errors or missed deadlines can lead to penalties and interest.

Accusolve’s Capital Gains Tax service covers UK-resident and non-resident landlord property disposals, share portfolio reorganisations and business exit transactions.

5. Inheritance Tax and Long-Term Wealth Planning

Despite significant speculation, the Budget does not make dramatic changes to Inheritance Tax (IHT) rates. However, key thresholds – including the Nil-Rate Band and Residence Nil-Rate Band – remain frozen, effectively bringing more estates into IHT over time as asset values increase. Combined with the new property surcharge and higher tax on investment income, this underscores the importance of integrated estate and wealth planning.

Accusolve supports clients with inheritance tax planning, including wills and gifting strategies, the use of business and agricultural reliefs and cross-border estate considerations for internationally mobile families.

6. Corporation Tax, Business Reliefs and SMEs

For companies, the main Corporation Tax rate remains at 25%, with the small-profits rate unchanged. The Budget confirms the continuation of full expensing for qualifying plant and machinery expenditure and maintains various sector-specific support and investment schemes, but in the context of an overall higher tax burden in the economy.

With higher taxes on dividends and investment income, plus ongoing wage and cost pressures, robust financial planning and forecasting are increasingly critical for small and medium-sized enterprises.

Accusolve provides:

• Accounting services and management accounts for growing SMEs.
• Corporation Tax compliance and planning.
• Financial forecasting and cash-flow planning.
• Virtual finance office / part-time CFO services for ambitious businesses in the UK and overseas.

7. Non-UK Residents, Non-Doms and Cross-Border Issues

The Budget does not immediately rewrite the non-dom regime, but government commentary and professional analysis confirm that offshore structures, non-dom rules and larger cross-border holdings remain under close review, with further consultations expected. At the same time, higher taxes on UK-source dividends, savings and property income will directly affect many non-residents with UK investments.

Non-UK residents and expats with UK companies, property or other UK-source income need to consider double-taxation agreements, UK tax residency rules and local filing obligations in parallel.

Accusolve specialises in: non-UK resident tax advice, non-resident tax returns and business & investment for expats, helping overseas clients use the UK as a base while staying compliant.

8. What This Budget Means for You – and How Accusolve Can Help

Taken together, the Autumn Budget 2025 raises the overall tax burden to historically high levels, largely through frozen thresholds and higher taxes on investment and property income, rather than through rate rises on work and consumption. The impact will be felt most by landlords, investors, high-value homeowners, business owners and wealthier households – but many ordinary taxpayers will also notice the effect of fiscal drag over time.

As certified accountants, AAT supervised and AML regulated, with over 15 years’ experience, Accusolve can help you:

• Analyse how the Autumn Budget 2025 affects your personal tax position and file your Self-Assessment tax return correctly.
• Plan UK and overseas property investment, including for non-resident landlords and expats.
• Re-optimise your salary, dividend and pension mix as a company director.
• Structure savings and investments to make best use of allowances and tax-efficient wrappers.
• Implement compliant bookkeeping, VAT returns, payroll and annual accounts processes.
• Develop long-term inheritance tax and succession plans aligned with evolving UK tax policy.