The Autumn Budget 2025
Following the Autumn Budget Announcement on Wednesday 26th November, we appreciate that understanding the latest changes is important for you, your family, and your business. At Parfitt Cresswell, we are committed to keeping you informed with timely insights to help you navigate any updates that may affect your legal needs.
Our comprehensive 2025 Autumn Budget Report summarises the key ‘takeaways’ from the Chancellor’s statement and provides practical commentary on how the announcements could impact your finances, your daily life, and your future plans.
Click here to view the 2025 Autumn Budget Report
If you have any questions or would like to discuss how the Budget might affect your personal circumstances, please do not hesitate to get in touch with our team. We offer a Complimentary Initial Consultation and are always here to help you with your legal needs.
Our key takeaways:
Estate planning:
- The IHT relief for infected blood compensation payments will be extended to cover wider inheritance
- The IHT allowance for BPR will be transferrable between spouses
- An increase of 2% to the rates of tax on unearned income:
- From 6th April 2026, the ordinary and upper rates of income tax on dividend will increase to 10.75% and 35.75% respectively, bringing them closer to standard income tax rates. The additional dividend income tax rate (applicable to many trusts) will remain the same at 39.35%.
- From 6th April 2027, the income tax charged on savings and property income (the definitions of which are yet to be settled) will increase by 2% for each tax band (ostensibly with the intention to bring these in line with earned income on which National Insurance is charged), bringing the rates to 22%, 42% and 47%.
- A more subtle change will be to change the order in which income is taxed to tax savings, dividend and rental income at the higher rates when received in combination with earned income.
Residential property:
- An additional tax - “Mansion Tax” - to be introduced on residential properties valued over £2m of between £2500 and £7500 per annum.
- Properties in Council Tax Bands F, G and H will need to be revalued as a result of this change, affecting less than 1% of all homeowners. Most of these properties will be in London and the South East of England.
Business and Employment:
- Lower business rates for retail, hospitality and leisure firms.
- Higher business rates to hit larger ‘online’ businesses as rates to be increased for larger industrial units
- £2k cap on salary sacrifice treatment RE pensions will be relevant to businesses, particularly those with a large number of employees.
- Customs duty with no lower limit on imports – for a lot of internet shopping arriving from abroad that could cause a lot of expense with the Royal Mail minimum charge for interception and billing.
- The Government has confirmed updated National Minimum Wage rates which will take effect from April 2026:
- Age 21 and over: £12.71 per hour
- Ages 18–20: £10.85 per hour
- Ages 16–17 & apprentices: £8.00 per hour
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