Key Features of the November 2025 Budget

This year’s Autumn Budget carries a message that accountants can’t afford to miss. While the fine print will keep the profession busy for months, the broader mood is one of recalibration – a shift towards tighter reliefs, greater scrutiny of business and property assets, and a renewed emphasis on demonstrating value for money. Accountants will be central to interpreting not just the figures, but the philosophy behind them: one that prioritises accountability, fairness and transparent structuring over unchecked tax advantages.

For practitioners, this means stepping beyond compliance. Clients will be looking for steady guidance through uncertainty – not just what’s changing, but why it matters to their business, their family wealth or their future plans. The Budget underscores the need for proactive communication: early planning, scenario modelling and frank discussions about long term sustainability. This is the moment to reinforce relationships, anticipate queries and position yourself as both adviser and interpreter of policy intent.

In tone and timing, this Budget feels like a reset. Reliefs are being re-targeted, incentives refocused, and reporting expectations tightened. Accountants should read that as a call to revisit assumptions, refresh client strategies and lead conversations about resilience. The task ahead isn’t just to apply the rules – it’s to navigate the new mood of fiscal realism with professionalism and foresight. Those who do will strengthen their standing as trusted guides in an era when financial clarity is more valuable than ever.

The 2025 Budget included changes for individuals and businesses, with increased income tax rates on some types of non-savings income, a restriction on salary sacrifice for pension contributions, confirmation that the £1 million allowance for inheritance tax agricultural and business property reliefs (APR/BPR) will be transferable between spouses, changes to capital allowances, a future mileage charge for electric vehicles, a new council tax surcharge for properties over £2 million, and the package of anti-avoidance measures consulted on over the summer – including the mandatory registration of tax advisers.

Personal taxes

• Personal allowance and income tax thresholds: The personal allowance and basic rate limit, and equivalent NICs thresholds, will remain frozen until 5 April 2031.
  
  
• Tax rates for property, savings and dividend income: From April 2027, new separate income tax rates will apply to property income, aligned with the following increased rates for savings income which will also apply from April 2027: basic rate 22%, higher rate 42%, additional rate 47%. From April 2026, the ordinary and upper rates for dividend income will increase by 2 percentage points to 10.75% and 35.75%. The additional rate for dividends will remain at 39.35%. The savings and dividend income changes will apply across the UK, and the government is to ‘engage’ with the devolved governments of Wales and Scotland on the property income rates.
  
  
• Salary sacrifice for pensions: From April 2029, the amount that is exempt from NICs will be capped at £2,000 a year per employee, for employee contributions made via salary sacrifice. There are no changes to the income tax treatment of contributions.
  
  
• Inheritance tax APR/BPR: The £1 million allowance for the 100% rate of APR/BPR will be transferable between spouses and civil partners (confirmed in the Budget Red Book at para 2.33). The inheritance tax nil-rate band thresholds are also confirmed as frozen for one further year until the end of 2030–21, as is the amount of the £1 million APR/BPR allowance.
  
  
• Capping inheritance tax trust charges for former non-UK domicile residents: This introduces a cap on relevant property inheritance tax charges for trusts which held excluded property at 30 October 2024. The relevant property charges are capped at £5 million over each ten-year cycle. This has retrospective effect from 6 April 2025. Several inheritance tax anti-avoidance measures have also been announced.
  
  
• Venture capital schemes: The investment and gross asset limits in the enterprise investment and venture capital schemes will be increased, and venture capital trust income tax relief will be reduced from 30% to 20%, from 6 April 2026.
  
  
• Enterprise Management Incentive scheme limits: The options, gross assets and employee number limits will all be doubled for contracts granted on or after 6 April 2026 (with some retrospective options for existing contracts). The exercise period limit will be extended to 15 years.
  
  
• Temporary non-residence rules: The post-departure trade profits provisions will be removed so that all dividends or distributions received from close companies, while temporarily non-resident, will be chargeable to UK income tax. The changes will have effect for individuals returning to the UK on and after 6 April 2026.
  
  
• Overseas workday relief: From 6 April 2026, in-year relief will be restricted to no more than 30% of the employee’s income. This is to align provisional in-year relief with the final tax return amount.
  
  
• Dividends received by non-UK residents: for distributions received on and after 6 April 2026, the notional tax credit that non-UK residents receive for the tax they are treated as having paid at the ordinary rate on dividends from UK companies will be abolished.
  
  
• Disposals to employee ownership trusts: Capital gains tax relief will be limited to 50% of the gain on disposal, for disposals made on or after 26 November 2025.
  
  
• Capital gains tax: incorporation relief claims: From 6 April 2026, individuals and trustees transferring a business to a company will need to make a claim for incorporation relief through self-assessment (rather than relief being automatic unless the transferor elects out).
  
  
• Non-resident capital gains tax changes: Changes will be made to the capital gains rules for disposals of UK land by non-UK residents, including changing the definition of UK property rich entities for disposals made by protected cell companies (from 26 November 2025), and clarifying when some individuals need to make double tax treaty claims (from April 2026).

Employment taxes

• Tax relief for homeworking expenses: Claims for additional household expenses incurred in employment duties, where the amounts are not reimbursed by the employer, will be disallowed from 6 April 2026.

• Workplace benefits reliefs: From 6 April 2026, the reimbursement of costs for eye tests, home working equipment and flu vaccinations will be exempt from income tax and NICs.

• Umbrella company non-compliance: From 6 April 2026, recruitment agencies or end clients will be made accountable for PAYE and NICs on payments to workers supplied via umbrella companies.

• Changes to Employee Car Ownership Schemes: Previously announced proposals for employee car ownership schemes will be delayed until April 2030, with transitional arrangements for employees in schemes established before that date.

• Plug-in hybrid electric vehicles: The government is mitigating the impact of increasing benefits in kind (i.e. the car benefit values) for the period from 1 January 2025 through to 5 April 2028.

Business taxes

• Corporation tax late-filing penalties: From 1 April 2026, penalties for late returns under Sch 18 will be doubled.
  
  
• Capital allowances: From April 2026, the main rate of writing-down allowances will be reduced to 14%. From 1 January 2026, a new 40% first-year allowance will be introduced for mainrate assets. Cars, second-hand assets and assets for leasing overseas will not be eligible.
  
  
• Extension of first-year allowances: 100% first-year allowances for zero-emission cars and electric vehicle charge points will be extended for another 12 months to the end of 2026–27.
  
  
• R&D advance clearances: In Spring 2026, HMRC is to launch a limited pilot of a new targeted advance assurance service.
  
  
• Advance tax certainty service: A new service is to launch in July 2026, providing binding clearances for major investment projects.
  
  
• Consultation on tax support for entrepreneurs: Looking at how the tax system could better support businesses from start-up and development, encouraging them to remain in the UK. A separate Entrepreneurship in the UK prospectus has also been published.
  
  
• Transfer pricing, permanent establishment and diverted profits tax: The government is to proceed with reforms, following earlier consultation, with Finance Bill changes expected to have effect from 1 January 2026. SMEs will remain exempt from transfer pricing.
  
  
• Energy profits levy: A permanent Oil and Gas Price Mechanism (OPGM) will be introduced, adopting a revenue-based model, ‘directly linking tax liability to exceptional market conditions’. OPGM tax rate will be 35%. Introduction from the end of the energy profits levy on 1 April 2030 (or sooner if the earlier mechanism is triggered).

 

Property taxes

• High value council tax surcharge: From April 2028 properties valued at over £2 million will be subject to a recurring annual charge in addition to existing council tax liability. The surcharge will operate in bands, depending on property value.
  
  
• Stamp duty reserve tax relief: From 27 November 2025, an exemption will be available from the 0.5% SDRT charge on agreements to transfer securities of a company whose shares are newly listed on a UK regulated market. This will apply for a three-year period from listing.
  
  
• Stamp duty on shares: A new Securities Transfer charge will replace Stamp Duty and Stamp Duty Reserve Tax, and measures will allow HMRC to test a new digital service for self-assessing and paying the charge. Much of the detail will be set out in regulations.

VAT

• Private hire vehicles: Confirmation that the government will not allow private hire vehicle (PHV) operators to act as agent for tax purposes in all cases, and will not introduce a new margin scheme or reduced rate for the sector. Legislation will exclude suppliers of PHV and taxi services from the tour operators’ margin scheme, except where supplied together with certain other travel services.
  
  
• Business donations of goods to charity: A new VAT relief for business donations of goods to charity will come into force on 1 April 2026.
  
  
• Motability scheme and insurance premium tax: New leases of vehicles from 1 April 2026 will be standard rated for VAT (on top-up payments only – amounts covered by welfare benefits will be disregarded) and exemption from IPT will be restricted to certain vehicles.