Autumn Budget 2025: What it means for you and your business
- Dan Burnell
- 2 days ago
- 3 min read
The Chancellor’s Autumn Budget 2025 delivered a mix of headline tax freezes, targeted welfare support, and technical reforms aimed at investment and compliance. While there were no dramatic changes to the “big three” (Income Tax, VAT, and NICs), the supporting measures will have significant long‑term impacts for households and businesses.
Tax and fiscal measures
Income tax thresholds: Frozen until 2031, pulling more earners into higher bands as wages rise.
Dividend, savings & property income: Rates increase by 2% from April 2026 (dividends) and April 2027 (savings/property).
Council tax surcharge: A new “Mansion Tax” applies to properties worth £2m+, starting at £2,500 per year.
National insurance: Thresholds frozen from 2028–29, raising an estimated £8bn. From 2029, pension contributions above £2,000 via salary sacrifice will attract NI.
Cash ISAs: Annual limit cut to £12,000.
Corporation tax: Capped at 25% for the remainder of this parliament.
Capital gains tax & EOTs: Relief for Employee Ownership Trust disposals reduced from 100% to 50%, effective immediately.
Cost of living and welfare
Minimum Wage: Rising 4.1% to £12.71/hour from April 2026.
Energy Bills: Average household bills cut by £150 from April 2026, funded via general taxation.
State Pension: Increasing 4.8% under the triple lock, worth over £550 annually for full entitlement.
Universal Credit: Two‑child cap scrapped.
Rail Fares: Regulated fares frozen for the first time in 30 years.
Motoring and environment
EV Road Tax: Pay‑per‑mile charge from 2028 (3p/mile for EVs, 1.5p/mile for plug‑in hybrids).
EV Subsidies: £1.5bn package to expand subsidies and charging infrastructure.
Fuel Duty: Short‑term freeze, with increases expected from 2026.
Public services
NHS: Funding for 250 new Neighborhood Health Centers to tackle waiting lists.
Debt & Borrowing: Commitment to reduce borrowing, aiming to ease inflationary pressures.
Business & investment incentives
Enterprise Investment Scheme (EIS) & Venture Capital Trusts (VCTs):
Fundraising caps doubled (to £10m, or £20m for knowledge‑intensive firms).
Lifetime limits raised to £24m (£40m for knowledge‑intensive).
Gross asset thresholds increased.
VCT upfront Income Tax relief reduced from 30% to 20%.
Enterprise Management Incentives (EMI):
Employee limit raised to 500.
Gross assets cap quadrupled to £120m.
Option value doubled to £6m.
Exercise period extended to 15 years.
Administrative requirements streamlined, with notification rules removed by 2027.
Transfer pricing:
SME exemption under review.
New “Undertaxed Transfer Pricing Profits” charge to replace Diverted Profits Tax.
Annual disclosure schedule for intra‑group transactions from 2027.
What this means for BlueFox clients
For individuals, the extended freezes and incremental rate rises mean the tax burden will continue to grow quietly, even without headline rate hikes. For businesses, the expanded EMI and EIS/VCT regimes create opportunities for growth and retention, though relief reductions mean timing is critical.
Community organisations and social enterprises should note the welfare changes, particularly the removal of the two‑child cap and rail fare freeze, which may ease pressures on beneficiaries. Meanwhile, compliance requirements around transfer pricing and e‑invoicing will demand forward planning.
Final Thoughts
This Budget reflects a balancing act: raising revenue through stealth measures while offering targeted support to households and investment incentives for businesses. For BlueFox clients, the key takeaway is to plan ahead, whether that means reviewing remuneration strategies, exploring investment schemes, or preparing for compliance changes.
At BlueFox Accounting, we’ll continue to translate these complex measures into clear, actionable advice so you can focus on building resilient, inclusive businesses that thrive in our community.