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The Chancellor of the Exchequer Rachel Reeves presented her Autumn Budget to Parliament on Wednesday 26 November 2025, some key tax changes are below:
Income tax and National Insurance
The income tax burden will continue to increase for many of the UK population. The frozen income tax personal allowance, as well as the thresholds for the higher and additional rate tax, will now remain same until the 2030/31 tax year rather than 2027/28 as previously indicated. This results in a higher tax burden increase even though rates of tax remain the same.
Inheritance tax and capital gains tax (CGT)
The existing ABR/BPR IHT relief policy has been modified with regard to the new Agricultural and Business Property Relief £1 million allowance. From April 2026, 100% ABR/BPR IHT relief will be transferable between spouses, thereby enabling married farmers to transfer up to £2 million to their children.
The rates of CGT and the £3,000 annual exemption also remain unchanged. Reducing the relief from Capital Gains Tax (CGT) for disposals to employee ownership trusts from 100% to 50%, effective 26 November 2025.
Pensions
For pension tax-free limit remains 25% up to a maximum of £268,275. However, a new restriction on salary sacrifices arrangements-on those saving via some workplace pensions schemes. Pension salary sacrifice is where an employee gives up a portion of salary in return for their employer paying an equivalent amount into their pension.
From April 2029 the 2029/30 tax year, there is to be a £2,000 cap on the amount of earnings that can be exchanged for pension contributions that benefit from a NI exemption. Employer and employee NICs will be due for pension contributions made through salary sacrifice schemes exceeding that cap. A cap at £2,000 is low enough to catch a lot of people using these schemes. Anyone earning over £40,000 and making the minimum 5% contribution into a workplace pension would be affected. It will be implemented from the 2029/30 tax year, so there is still some time for individuals and employers to adjust or accelerate pension contributions before the changes take effect.
Also, the state pension will increase in with the line of an inflation 4.8%.
Capital allowance
From April 2026, reducing the main writing down allowance rate (WDA) from 18% to 14%, as well as introducing a new 40% first-year allowance for expenditure eligible for the main rate.
Property and council tax Surcharge
New separate tax rates for property income, so property income will have its own individual tax rates. From April 2027, the property basic rate will be 22%, higher rate 42% and additional rate 47%. Finance cost relief will be provided at the separate property basic rate (22%).
This time the chancellor thinking outside the box to implement some kind of ‘wealth tax', owners of homes valued at over £2m will be targeted with a High Value Council Tax Surcharge from April 2028:
- Council Tax Surcharge £2,500 for properties worth more than £2m
- Council Tax Surcharge £3,500 for properties worth between £2.5m to £3.5m
- Council Tax Surcharge £4,500 for properties worth between £3.5m to £5m
- Council Tax Surcharge £7,500 for properties worth more than £5m
This will give huge impacts on some people, who may be asset rich on paper but not enough cash available. This ‘mansion tax' may impact on the high value property of the housing market.
ISAs
From 6 April 2027 the annual Isa cash limit will be set at £12,000, down from £20,000. Currently, anybody can split their £20,000 overall ISA allowance between the main ISA types in whatever proportion they like. This will apply to new deposits only, meaning that existing Cash ISAs are unaffected, and the overall limit of £20,000 is unchanged. However, those using the full £12,000 in a Cash ISA will have the option of adding a further £8,000 to a Stocks & Shares ISA.
Stamp Duty Reserve Tax
A small bright spot among the announcements is a three-year Stamp Duty Reserve Tax (SDRT) holiday for shares of companies newly listed on the London Stock Exchange with immediate effect. SDRT is normally applied at rate of 0.5% to all share purchases on the UK market and it would potentially benefit the UK economy in the long term.
Two-child benefit limit
Two-child limit on Universal Credit will be removed from April 2026. This change is expected to tackle child poverty-helping 450,000 children by 2029/30, compared with what it otherwise would have been.
National minimum wage
The National Living Wage-the minimum wage for people aged 21 and over will increase by 4.1% to £12.71 an hour from April 2026.The minimum wage for 18-to-20-year-olds will increase by 8.5% to £10.85 an hour and the minimum wage for 16-to-17-year-olds and apprentices will increase by 6.0% to £8.00 an hour.
Electric vehicles excise duty & Fuel duty
The government introduced a new excise duty on electric cars, payable alongside vehicle excise duty, at 3p a mile for electric cars and 1.5p for plug-in hybrids, to help double funding for road maintenance in England.
The government has extended the temporary 5p cut in the rates of fuel duty to September 2026 and cancelled the inflation-linked rise in fuel duty rates. And to increase fuel duty rates by Retail Price Index inflation from April 2027.
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