UK Chancellor Rachel Reeves described her Autumn Budget as one that “cuts waiting lists, that cuts our debt and borrowing, and cuts the cost of living”. She stated her goal is to “defy the forecasts and break Britain out of its cycle of decline through stability, investment and reform”

Key Tax Changes

  • Tax Thresholds Frozen: Personal tax and National Insurance Contribution (NIC) thresholds, including the personal allowance (£12,570), the higher-rate threshold (£50,270), and the additional-rate threshold (£125,140), will be frozen at their current levels until April 2031.
  • Dividends Tax Increase: Starting in April 2026, dividend tax rates will increase by 2 percentage points. The basic rate will rise from 8.75% to 10.75%, and the higher rate will increase from 33.75% to 35.75%. The additional rate will stay at 39.35%.
  • Savings and Property Income Tax Increase: From April 2027, tax rates on savings and property income will increase by 2 percentage points across all bands, with the basic rate going from 20% to 22%, the higher rate from 40% to 42%, and the additional rate from 45% to 47%. Landlords’ finance cost relief will be at the new basic rate of 22%.
  • High-Value Property Surcharge: An annual “High Value Council Tax” surcharge will be introduced in England in April 2028 for properties valued over £2 million. Properties between £2 million and £2.5 million will face a £2,500 annual charge, while those over £5 million will have a £7,500 annual charge.
  • Pension Salary Sacrifice Cap: From April 2029, NICs relief for pension contributions through salary sacrifice will be capped at the first £2,000 per year. Contributions above this cap will be subject to NICs.
  • Electric Vehicle Excise Duty: A new mileage-based charge will be introduced in April 2028, with electric cars charged at 3p per mile and plug-in hybrids at 1.5p per mile.
  • ISA Allowance Reduction: The annual cash ISA allowance for those under 65 will be reduced from £20,000 to £12,000 from April 2027. The overall ISA limit remains £20,000, with the remaining £8,000 needing to be invested in stocks and shares.
  • Gambling and Bingo Duties: Remote gaming duty will increase from 21% to 40% from April 2026, and a new remote betting rate of 25% will be introduced in April 2027. Bingo duty will be abolished from April 2026.
  • Fuel Duty Freeze: The existing 5p per litre cut to fuel duty has been extended, and the duty will remain frozen until September 2026. 

Key Spending and Policy Measures

The budget also outlines key spending and policy initiatives: 

  • Measures to address the cost of living include reducing energy bills by removing green levies, freezing regulated rail fares and prescription charges, and extending the Warm Home Discount.
  • In welfare and work, the two-child limit for Universal Credit and Tax Credits will be abolished from April 2026. The National Living Wage will increase, and the State Pension will rise under the triple lock.
  • Public services and investment include additional capital investment for the NHS, lower business rates for certain sectors funded by higher rates for large warehouses, and increased investment in infrastructure