The Autumn Budget took place yesterday (November 26th), and with it brought a wave of changes affecting Capital Gains Tax, Inheritance Tax, Personal Tax, Income Tax and much more.
Implemented immediately
- 100% CGT relief for disposals of shares to Employee Ownership Trusts is restricted to 50% from 26 November 2025
From January 2026
- New 40% First Year Allowance for most ‘main rate expenditure’ which does not already qualify for ‘full expensing’ or the £1 million Annual Investment Allowance (e.g. assets for leasing and assets above £1 million bought by unincorporated businesses)
- A new Advance Clearance Service to provide certainty for some R&D claims is to be introduced ‘in Spring 2026’ following consultation
From April 2026
- Income tax thresholds and bands frozen (and continue to be frozen until April 2031)
- Income tax rates on dividend income rise from 8.75% to 10.75% (basic rate) and from 33.75% to 35.75% (higher rate); additional rate remains 39.35%
- The same increase will apply to corporation tax payable on loans to close company participators which are not repaid to the company within 9 months of its year end
- The basis for company car benefit charges increases by one percentage point for 2026/27
- Benefit charges for company vans and private fuel in company vehicles increased
- Employers’ NIC threshold frozen at £5,000, and NIC Upper Earnings Limit remains £50,270 (also frozen until 2031)
- NIC Lower Earnings Limit and Small Profits Threshold increased by 3.8%
- Confirmation of the introduction of Making Tax Digital for Income Tax Self-Assessment from April 2026, with easements for the first year in relation to filing penalties
- Writing down allowances on main rate expenditure cut from 18% to 14%, and on special rate expenditure from 6% to 3%, from 1 April 2026 (companies) or 6 April 2026 (unincorporated trades)
- Extension until March 2027 of the 100% first year allowance for qualifying expenditure on zero-emission cars and charging points for electric vehicles
- Corporation Tax late filing penalties doubled from 1 April 2026
- CGT rate on disposals qualifying for Business Asset Disposal Relief increased from 14% to 18%
- CGT relief on incorporation to be claimed from 6 April 2026, rather than applying automatically
- ‘Carried interest’ moved to the income tax regime, with a discount for certain qualifying disposals
- IHT Agricultural Property Relief and Business Property Relief at 100% will only apply to the first £1 million of combined value; above that limit, the maximum relief will be 50%; the £1 million will be transferable between spouses and civil partners
- IHT Business Property Relief restricted to 50% for all ‘unlisted’ shares which are quoted on recognised stock exchanges such as the Alternative Investment Market
- VAT rules changed to prevent private hire vehicle operators using the ‘Tour Operators Margin Scheme’ to pay VAT only on their profit margin
- From July 2026, the Motability scheme will be reformed to reduce the relief available on high-end cars
- Fuel duty remains frozen, and the temporary 5p cut announced in March 2024 will be extended to 31 August 2026
- Increases in online gambling taxes from April 2026
- Increases in National Living Wage and State pension in line with the September 2025 inflation figure (3.8%)
- The ‘two-child benefit cap’ for Universal Credit is removed, increasing the available benefits for claimants with more than two children
From April 2027
- Income tax rates on property and savings income rise from 20% to 22% (basic rate), from 40% to 42% (higher rate), and from 45% to 47% (additional rate)
- For under-65s, no more than £12,000 of the annual £20,000 ISA investment limit can be invested in a cash ISA; the other £8,000 will have to be in stocks and shares
No change, or later
- High Value Council Tax Surcharge to be introduced on properties worth more than £2 million (in 2026) to apply from April 2028: £2,500 for properties over £2 million rising to £7,500 for properties over £5 million
- New mileage based e-Vehicle Excise Duty payable on use of electric and hybrid cars from April 2028
- From April 2029, salary sacrifice schemes putting more than £2,000 into an employee’s pension will be charged to NIC as if cash salary was paid
- All VAT invoices to be electronic from April 2029
- All low value import consignments to be subject to customs duties from April 2029
- Company car tax rates were announced last year for 2028-29 and 2029-30, to provide long-term certainty; the incentives for purchasing electric vehicles will be maintained
- Plan 2 Student Loan repayment thresholds frozen until April 2030
Final thoughts
There will likely be more announcements in the days and weeks that follow, and we’ll be sure to keep you up to date on these as they come through.
If you have any questions on any of the above, please don’t hesitate to get in touch with our team of experts who would be more than happy to help.
