Personal Tax Threshold Freeze, Corporate Tax Cuts, New Property Policies... Our Take on the Autumn Budget
- TBA
- 4 days ago
- 5 min read
On 26 November 2025, British Chancellor of the Exchequer Reeves announced the highly anticipated Autumn Budget.
Before the speech, the Office for Budget Responsibility (OBR) rarely leaked data in advance, causing an uproar. However, this did not stop Reeves from announcing her economic reconstruction plan with a tough stance.
After opening by pointing out that the OBR's early release of data was a 'serious mistake', Reeves announced this budget containing a total of £26 billion in tax increases, including the extension of the personal income tax threshold freeze, minimum wage increases, property taxes, and a new round of tax policy adjustments such as customs duties on e-commerce parcels.
This Autumn Budget includes several tax measures aimed at businesses and individuals, covering areas such as venture capital, business rates, income tax thresholds, and high-value property taxes.
Personal income tax threshold freeze
The government announced that the thresholds for personal Income Tax and National Insurance (NI) will be frozen for another three years until after 2028. This move means that as wages rise, more taxpayers will be pushed into higher tax brackets.
Reeves admitted that this move would 'affect working people', but emphasised that the new tax reforms still ensure that 'the wealthiest bear the most'.
At the same time, she confirmed that the basic rate of income tax, Value Added Tax (VAT), and National Insurance rates will not be increased.
Corporation Tax reform
For local UK businesses, approximately 750,000 retail, hospitality, and leisure businesses will enjoy long-term preferential business rates.
At the same time, the support scheme for venture capital will be expanded, providing a three-year stamp duty exemption for companies listing in the UK.
In addition, companies will receive a 40% investment allowance, allowing more upfront capital investment to be included in the scope of tax relief.
Customs duties on e-commerce parcels
In the budget, Reeves clarified that customs duties will be levied on all parcels entering the UK to prevent online retailers from undercutting local shops with lower prices.
Fuel duty freeze, new mileage tax for electric vehicles
Fuel duty is frozen again for at least five months until September 2026. The rate has been frozen since the 2010-11 financial year.
Thereafter, the temporary 5p per litre cut implemented in spring 2022 will be gradually phased out.
Additionally, the UK will implement a new mileage-based tax system for electric vehicles, which is expected to bring in £1.4 billion in tax revenue in the future:
Electric vehicles: 3p per mile
Hybrid vehicles: 1.5p per mile
Dividend Tax & Asset Income Tax increase
Tax rates on dividends, property income, and savings gains will be uniformly increased by 2 percentage points. Furthermore, Capital Gains Tax relief when selling a business to an Employee Ownership Trust will be reduced from 100% to 50%.
Council tax surcharge on high-value properties
Labour will impose an additional council tax on high-value properties:
Properties worth over £2 million: Additional levy of £2,500 per year
Properties worth over £5 million: Additional levy of £7,500 per year
Gaming duty increase
Remote gaming duty will be increased from 21% to 40%, and online betting duty will be increased from 15% to 25%.
Bingo duty will be abolished from April 2026. This is expected to increase revenue by more than £1 billion.
Minimum Wage increase
From April 2026, the minimum wage will be increased across the board, with specific adjustments as follows:
21 years and over: Hourly rate increases by 50p to £12.71/hour
18-20 years: Hourly rate increases by 85p to £10.85/hour
Under 18s and apprentices: Hourly rate increases by 45p to £8/hour
However, the business community has warned that following this year's wage increases and the rise in employer National Insurance costs, a continued rise in the minimum wage could lead to recruitment freezes or a reduction in new job openings.
State Pension changes
The UK government announced that from April 2029, salary sacrifice pension contributions exceeding £2,000 per year will be subject to National Insurance.
Under the 'triple lock' mechanism, the State Pension will increase from April 2026:
Old State Pension recipients: Increase of £440 per year
New State Pension recipients: Increase of £575 per year
Cash ISA reforms
The tax-free deposit limit for Cash ISAs will be reduced from £20,000 per year to £12,000.
This is to encourage more funds to be invested in Stocks and Shares ISAs to promote long-term investment. However, savers aged 65 and over will retain the £20,000 tax-free allowance per year.
Abolition of the two-child benefit cap
The government will abolish the two-child benefit cap from April 2026.
Current policy stipulates that for a third and subsequent child born after 6 April 2017, the amount of benefits parents can claim is restricted.
After the cap is lifted, it is estimated that about 450,000 children will be lifted out of poverty.
In addition, the Autumn Budget also includes the following new changes:
Energy bill cuts: From April 2026, by lowering surcharges, average annual energy bills will be reduced by £150.
Tax on ride-hailing services: Ride-hailing services such as Uber and Bolt will be subject to tax.
Rail fare freeze: Regulated rail fares within England, for English operators, will be frozen for the first time in 30 years.
NHS expansion: Investment of £300 million for NHS technology upgrades and the construction of 250 new community health centres.
Defence spending: 2.6% of Gross Domestic Product (GDP) will be spent on defence.
After the Budget is announced each year, the relevant tax measures and financial plans need to go through a series of parliamentary procedures before they formally come into effect.
Budget Resolutions will last for four days and are expected to end on 2 December (Tuesday).
If the Budget Resolutions are approved by the House of Commons on the final day of debate, they can take effect immediately, but to have permanent legal effect, they must also pass the Finance Bill.
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