Autumn Budget 2025

How the Changes Affect Small Businesses, Landlords and Individuals

The Autumn Budget brought several tax and policy announcements that will impact the way my clients plan, earn and invest over the coming years. Below is a simple breakdown of the key changes, what they mean in real terms, and how businesses and individuals can prepare.

This page is designed to be clear, actionable and helpful – whether you’re a business owner, landlord, company director or individual taxpayer looking to understand the financial impact.

Key Autumn Budget Changes at a Glance

Income Tax and National Insurance thresholds frozen until 2031
Dividend tax increases from April 2026
Higher tax on rental income and interest savings from 2027
Salary sacrifice pension NIC exemptions capped from 2029
New “mansion tax” for properties over £2m from 2028
New 40% first-year capital allowance for plant & machinery from 2026
Ongoing business rates relief for retail, hospitality and leisure

Each area will affect clients differently, so understanding the details matters.

Income Tax and National Insurance Threshold Freeze (to 2031)

The government has extended the freeze on tax thresholds. This doesn’t sound dramatic, but it matters because as wages rise, more income falls into higher tax bands – even though rates haven’t changed.

What this means for you

More people may move into higher tax bands without earning significantly more.
Company directors with salary + dividend strategies may see increased tax liability.
Employers could face higher wage-related costs over the coming years.

Planning tip: reviewing remuneration and profit extraction annually will be essential to reduce the impact of “fiscal drag.”

Dividend Tax Increase from April 2026

Dividend tax will rise by 2 percentage points for basic and higher-rate taxpayers.

Here’s a quick summary:

The basic-rate dividend tax will rise from 8.75% → 10.75%.
The higher-rate dividend tax will rise from 33.75% → 35.75%.
The additional-rate dividend tax remains unchanged.

Who is affected

Limited company directors who take dividends instead of salary
Investors with dividend-generating portfolios outside pensions/ISAs

How to prepare

Review timing of dividend withdrawals before April 2026
Make greater use of ISAs and pension wrappers to reduce taxable income
Married couples or partners should ensure both allowances are fully used

This will be a key year for strategic tax planning.

Tax Increase on Savings Interest & Rental Income (from 2027)

Savings income and rental profits will also rise by 2%.
Landlords already feeling pressure from interest rate changes may see further reductions in net yield.

Impact for landlords and savers

Higher tax bills on rental income
Savings interest outside ISAs becomes more expensive
More individuals may enter the higher-rate tax bracket

If you own property or hold large cash reserves, it’s worth planning early.

Salary Sacrifice Pension NIC Restriction from 2029

Salary sacrifice has long been a tax-efficient way to pay into pensions. However, from 2029 only the first £2,000 of pension contributions per employee via sacrifice will be exempt from National Insurance.

This will affect

Higher earners making large pension contributions
Employers offering salary sacrifice pension schemes
Businesses relying on NIC savings for reward structure

Forward-planning employee benefits will be increasingly important.

Mansion Tax for Homes Over £2m (from 2028)

A new annual property surcharge will apply to high-value homes.
This won’t affect most households, but for those with property portfolios or second homes, it could form part of long-term planning and wealth strategy.

Capital Allowances – 40% First-Year Relief from 2026

Businesses will be able to claim a new 40% first-year allowance on qualifying plant and machinery.

Why this matters

Tax savings upfront for equipment and asset purchases
Helps with cashflow planning for growth and investment
Benefits limited companies and unincorporated businesses

The timing of expenditure could make a significant difference to future tax relief.

Business Rates Support for Retail, Hospitality & Leisure

Smaller high-street businesses will benefit from ongoing reduced business rates, while larger commercial sites may see increases.

Good news for cafés, salons, shops, restaurants and tourism-based businesses.

What You Should Do Next

Every client’s situation is different, so tailored advice is key.
Whether you’re a limited company director, a landlord, a small business owner or an individual taxpayer, early planning can reduce your tax exposure and protect profits.

I can help you:

Review salary vs dividend strategies
Plan rental income efficiency
Structure pension contributions effectively
Time business investment for maximum tax savings
Carry out tax projections and future cashflow planning

Book a consultation

If you’d like support navigating the Autumn Budget changes, get in touch and I’ll guide you through the best approach for your situation.