The Chancellor delivered the UK Budget on 26 November 2025, announcing a number of significant tax changes that will impact individuals, businesses, savers, homeowners, and company directors from 2026 and beyond.

To help you understand what these changes mean for you, we’ve broken down the key updates below — and created a detailed downloadable guide covering all rates, thresholds, and planning considerations.

Overview of the 2025 Budget

This year’s Budget continues the government’s strategy of raising revenue through frozen thresholds and targeted tax increases. While there was a focus on economic growth and easing cost-of-living pressures, many households and business owners will feel the impact of the following changes:

Income Tax & National Insurance

Income tax and NI thresholds will remain frozen until 2031, meaning more people may move into higher tax brackets as their earnings increase (Page 7).

This “fiscal drag” effect is one of the most financially significant elements of the new Budget.

Dividend Tax Increases (Company Directors Take Note)

From April 2026, the basic and higher dividend tax rates increase by 2 percentage points (Page 7).

If you extract profits through dividends, now is the time to reassess your remuneration strategy.

Changes for Landlords & Property Owners

Landlords and property investors face notable changes:

  • Property income tax rates rise by 2 percentage points from April 2027 (Page 7).

  • A new ‘Mansion Tax’ applies to homes worth over £2 million, with a surcharge between £2,500 and £7,500 annually from April 2028 (Page 16).

These changes may influence rental yields, investment decisions, and long-term property planning.

Savings & ISAs

Savers will also see changes from April 2027, including:

  • Savings income taxed at higher rates (Page 7)

  • A reduction of the cash ISA allowance to £12,000 for anyone under 65 (Page 8)

Those over 65 retain the full £20,000 cash ISA option.

Minimum Wage Increases

From April 2026, National Living Wage and Minimum Wage rates rise again (Page 10). This will increase wage bills for businesses employing staff at or near these rates:

  • £12.71 for employees aged 21+

  • £10.85 for ages 18–20

  • £8.00 for ages 16–17 and apprentices

This may affect staffing costs, pension contributions, and recruitment strategy.

Capital Gains, Pensions & Inheritance Tax

This year’s Budget also introduces important updates in long-term planning areas:

  • Capital Gains Tax relief reduction for Employee Ownership Trusts (Page 12)

  • IHT relief caps on agricultural and business property from April 2026 (Page 13)

  • Unused pension funds to form part of your taxable estate from April 2027 (Page 13)

These could affect your retirement and estate planning strategy.

Corporation Tax & Investment Schemes

Corporation tax rates remain unchanged (Page 17), but there are several updates that may benefit or impact business owners:

  • Increased EIS and VCT eligibility limits from April 2026

  • Reduced VCT income tax relief (from 30% to 20%) for investors (Page 17)

📘 Download Your Full UK Budget 2025 Guide

To help you plan ahead, we’ve created a comprehensive summary with all tax tables, thresholds, allowances, and commentary on what these changes could mean for your business and personal finances.

👉 Download the Full Budget 2025 Guide

This guide covers:
✔ Individual tax changes
✔ Business & corporation tax updates
✔ Property & landlord reforms
✔ Capital gains and inheritance tax
✔ Savings, dividends & ISA rules
✔ Employment and payroll updates
✔ VAT & business rates
✔ Practical planning tips for 2026/27

All information is based on the official Budget summary prepared by Harris Lacey & Swain Chartered Accountants.