Autumn Budget 2025

Chancellor Rachel Reeves presented her second Budget to the House of Commons on 26 November, alongside the publication of the Office for Budget Responsibility’s updated forecasts for growth and borrowing.

Below, are the key points she delivered in her speech. To view the full speech, please click the following link.

About this report

This report was written immediately after Rachel Reeves delivered her speech and has been prepared from press releases and other documents. It is not intended to cover every aspect of the Budget but, instead, is designed to act as overview only. No liability is accepted for any action taken or refrained from in consequence of its contents. Advice should always be sought from a professional.

• GDP Growth for: 2025 / 1.5%; 2026 / 1.4%; 2027 / 1.5%; 2028 / 1.5%; 2029 / 1.5%; 2030 / 1.5%
• Inflation is currently 2.5%; 2025 / 3.5%; 2026 / 2.5%; 2027 / 2%; 2028 / 2%; 2029 / 2%; 2030 / 2%
• Public Sector net debt - 2025 /  95%; 2026 /  95.3%; 2027 /  96.3%; 2028 /  97%; 2029 / 96.8%; 2030 /  96.1%
• Borrowing forecast - 2025 / 4.5%; 2026 / 3.5%; 2027 / 3% ; 2028 /  2.6%; 2029 / 1.9%; 2030 / 1.9%
• Borrowing - 2025/26 £138.3B; 2026/27 £112.1B; 2027/28 £98.5B; 2028/29 £86.9B; 2029/30 £67.9B; 2030/31 £67.2B

• Household energy bills – The government is not continuing the funding of the Energy Company Obligation on bills after March 2026 and is announcing £1.5 billion of new funding to support households facing fuel poverty. The government will also fund 75% of the cost of the Renewables Obligation to households in 2026-27, 2027-28 and 2028-29.
• Fuel duty: 2026-27 main rates – The government will extend the temporary 5p fuel duty cut for a further five months, with the cut being reversed in three stages: 1p on 1 September 2026, 2p on 1 December 2026 and 2p on 1 March 2027. This will return rates to pre-March 2022 levels. The planned inflation increase for 2026-27 will not take place, with the government uprating fuel duty rates by Retail Prices Index (RPI) from April 2027.
• Freezing NHS prescription charges – NHS prescription charges in England will be frozen in 2026-27 with the cost of a single prescription remaining at £9.90.
• Working age benefit uprating – Working age benefits will be uprated in line with the September CPI inflation of 3.8% from April 2026. Rates for the Universal Credit Standard Allowance and Health Element remain set in legislation until April 2029.
• Rail fares freeze – The government is freezing all regulated rail fares in England for one year starting from March 2026. This means passengers will not see any changes in the price of season tickets, peak return fares for commuters and off‑peak returns between major cities until March 2027.
  

• Universal Credit: Removing the two-child limit – The two-child limit in the Universal Credit Child Element will be removed from April 2026.
• DWP Fraud and Error: Extend Targeted Case Review of Universal Credit claims to 2031 – The government will extend DWP’s Targeted Case Review, that identifies incorrect Universal Credit claims, to 2031.
• DWP Fraud and Error: Improving accuracy in Pension Credit claims – The government will introduce reviews of Pension Credit claims that are at risk of being incorrect, starting from 2026 and ending in 2029.
• Housing Benefit: Reducing the financial cliff edge for claimants in supported housing and temporary accommodation from Autumn 2026 – To improve work incentives, the government is adjusting how earnings are treated for Housing Benefit and Universal Credit claimants in supported housing and temporary accommodation, so that most claimants will not be subject to reductions in income for working more hours.
• Universal Credit: Extend the £2,500 surplus earnings threshold for one year from April 2026 – The government will maintain the surplus earnings threshold at £2,500 for Universal Credit claimants for a further year until April 2027.
• Operational improvements to health and disability assessments – The government is increasing Work Capability Assessment (WCA) reassessment capacity, extending Personal Independence Payment award reviews periods and increasing face-to-face health assessments.
• Reassessing Carer’s Allowance overpayments caused by official error – The government will reassess Carer’s Allowance overpayments which were the result of incorrect operational guidance, as recommended by the Independent Review into Carer’s Allowance Overpayments. Department for Work and Pensions (DWP) will cancel existing debts or return previously collected debts to affected carers.
• Motability Scheme: Reforming tax reliefs – From July 2026, vehicles leased through the Motability Scheme, or through any equivalent qualifying schemes, will be subject to 20% VAT on top-up payments which are made in addition to the transfer of eligible welfare payments for more expensive vehicles on the scheme. Insurance Premium Tax will also be applied at the standard rate of 12% for insurance related to vehicles leased through the scheme. Tax changes will not apply to vehicles designed for, or substantially and permanently adapted for, wheelchair or stretcher users.
• Universal Credit: Increasing the maximum amount for childcare costs – The maximum amount that can be reimbursed for childcare costs for eligible Universal Credit claimants will increase by £736.06 for each additional child above the current maximum cap for two children.
• Winter Fuel Payments – The £35,000 threshold will be maintained for this Parliament.
• Defined Benefit pensions – inflation protection for pre-1997 pensions in the Pension Protection Fund (PPF) and Financial Assistance Scheme (FAS) – The government will help protect members of the PPF and FAS from the impact of inflation by introducing CPI-linked increases, capped at 2.5% a year, on pre-1997 pension accruals where their original schemes provided this benefit, from January 2027. This will help ensure members’ pensions keep pace with the cost of living.
  

• National Living Wage and National Minimum Wage increases – From 1 April 2026, the National Living Wage will increase by 4.1% to £12.71 per hour. The National Minimum Wage for 18-20 year olds will also increase by 8.5% to £10.85 per hour and for 16-17 year olds and apprentices by 6.0% to £8.00 per hour. The accommodation offset will increase by 4.1% to £11.10 per day.
• Youth Guarantee and Growth and Skills Levy – The government is making available more than £1.5 billion for additional employment and skills support, and the Growth and Skills Levy, over the spending review period. This will ensure young people have access to high-quality training opportunities and the support they need to earn or learn, alongside measures to simplify the apprenticeship system and make it more efficient. Further details will be announced shortly.
  
• Youth Guarantee: Jobs Guarantee scheme – The government will guarantee a six-month paid work placement for every eligible 18-21 year old who has been on Universal Credit and looking for work for 18 months. This will cover 100% of employment costs for 25 hours a week at the relevant minimum wage, and additional wraparound support.

• Accelerating capital investment – The government brought forward capital investment at SR25 to accelerate delivery of major infrastructure projects. Alongside, the Budget confirms investment in new schemes including £890 million for the Lower Thames Crossing.
• NHS Tech – An additional £300 million capital investment for NHS technology to support NHS productivity and improve patient outcomes.
• Business rates – From 1 April 2026, business rates bills in England will be updated to reflect changes in property values since the last revaluation in 2023. As a result of the revaluation, the small business multiplier will decrease from 49.9p in 2025-26 to 43.2p in 2026-27, and the standard multiplier will decrease from 55.5p to 48p.
• A package worth £4.3 billion over the next three years will support businesses as they transition to their new bills. The government will also introduce new permanently lower retail, hospitality and leisure multipliers, to deliver the manifesto commitment to rebalance the business rates system and support the high street. English local authorities will be fully compensated for the loss of income as a result of these business rates measures and will receive new burdens funding for administrative and IT costs.
• Business rates Transitional Relief – To support ratepayers facing large bill increases at the revaluation the government is introducing a redesigned Transitional Relief scheme worth £3.2 billion over the next three years, providing more generous support for those paying higher tax rates. The Transitional Relief caps will be as follows for properties with a rateable value of. Note: These caps are applied before changes in other reliefs and local supplements:
  • Up to £20,000 (£28,000 in London): in 2026-27 – 5%, in 2027-28 – 10% (plus inflation), in 2028-29 – 25% (plus inflation).
  • £20,001 (£28,001 in London) to £100,000: in 2026-27 – 15%, in 2027-28 – 25% (plus inflation), in 2028-29 – 40% (plus inflation).
  • Over £100,000: in 2026-27 – 30%, in 2027-28 – 25% (plus inflation), in 2028-29 – 25% (plus inflation).
• Business rates Transitional Relief Supplement – The government is introducing a 1p supplement to the relevant tax rate for ratepayers who do not receive Transitional Relief or the Supporting Small Business scheme to partially fund Transitional Relief. This will apply for one year from 1 April 2026.
• Business rates 2026 Supporting Small Business scheme – Bill increases for the smallest businesses losing some or all of their small business rates relief or rural rate relief will be capped at the higher of £800 or the relevant transitional relief caps from 1 April 2026. Note, support is applied before changes in other reliefs and local supplements.
• Business rates 2026 Supporting Small Business scheme – The government has expanded the 2026 Supporting Small Business scheme to ratepayers losing their retail, hospitality and leisure (RHL) relief. This will apply for three years from 1 April 2026, giving additional support worth £1.3 billion to those losing RHL relief. Note, support is applied before changes in other reliefs and local supplements.
• Business rates 2023 Supporting Small Business Scheme – The government is introducing a one-year extension of the 2023 Supporting Small Business scheme in 2026-27. This support will protect the smallest businesses from overnight bill increases. Note, support is applied before changes in other reliefs and local supplements.
• Business rates retail, hospitality and leisure multipliers– From 1 April 2026, the government is introducing two permanently lower business rates multipliers for eligible RHL properties with rateable values below £500,000. These rates will be 5p lower than the national multipliers , making the small business RHL multiplier 38.2p in 2026-27 and the standard RHL multiplier 43p in 2026-27.
• Business rates high value multiplier – From 1 April 2026, the government is introducing a high-value business rates multiplier for properties with rateable values of £500,000 and above 2.8p above the national standard multiplier, making the high-value multiplier 50.8p in 2026-27.
• Film studios relief – At Spring Budget 2024, the government announced that eligible film studios in England will receive a 40% reduction on their gross business rates bills until 2034. The government will continue to provide this relief at the current level to support the creative sector.
• Business rates: Extension of the SBRR grace period – The government is extending the Small Business Rates Relief (SBRR) grace period from one to three years. This means businesses will now remain eligible for SBRR on their first property for three years after expanding into a second property. Businesses expanding after Budget day will be eligible.
• Leeds City Fund (BRR zone) – Subject to business case, the government is supporting West Yorkshire Combined Authority by establishing the Leeds City Fund. This is a business rates retention (BRR) zone in Leeds city centre, within which Leeds City Council can retain 100% of business rates growth above an agreed baseline for 25 years.
• Business rates retention – The government will extend the Greater London Authority enhanced BRR arrangements and the 100% pilots in Cornwall, the West of England and Liverpool City Region for a further three years, to 2028-29.
• UK Listing Relief – Taking effect from 27 November, transfers of a company’s securities will be subject to relief from the 0.5% Stamp Duty Reserve Tax charge for three years from the point the company lists on a UK regulated market.
• Charity Tax Relief – A new VAT relief will be introduced from 1 April 2026 for business donations of goods to charity for distribution to those in need or use in the delivery of their charitable services.

• Kernow Industrial Growth Fund – The government is establishing a £30 million fund to invest in Cornwall’s comparative sectoral advantages, including critical minerals, renewable energy and marine innovation, subject to a full business case.
• Mayoral Revolving Growth Fund – The government will provide a share of the £500 million Mayoral Revolving Growth Fund to the Mayoral Strategic Authorities of Greater Manchester, West Midlands, Liverpool City Region, North East, West Yorkshire and South Yorkshire. The Mayoral Revolving Growth Fund is a strategic investment partnership which will see central government and Mayors sharing risk to overcome access to finance barriers in key city regions, accelerating investment, unlocking development and boosting growth.
• Local Growth Fund – The government will launch the Local Growth Fund for the Mayoral Strategic Authorities of Greater Manchester, North East, West Midlands, South Yorkshire, West Yorkshire, Liverpool City Region, Greater Lincolnshire, Tees Valley, Hull & East Yorkshire, York & North Yorkshire and East Midlands. These strategic authorities will each receive a share of the £902 million over four years to invest in growth-driving interventions, including local infrastructure, business, and employment support and skills programmes.
• Growth Mission Fund – The government has allocated funding from the Growth Mission Fund to the following projects: £20 million to construct a sports quarter in Peterborough, £20 million for redevelopment of the Inchgreen dry docks in Inverclyde, and £16 million for the construction of a STEM centre in Darlington. Officials are working with Fife Council to develop plans which would regenerate the area between the Kirkcaldy High Street and waterfront, improving the public realm and creating a new growth and innovation workspace in the centre of the town. Further details on the project and confirmation of funding will follow in due course.
  
• Industrial Strategy Zones announcements (SWNI Freeports & Interest Zones (IZs)) – The government is approving the business cases for Flintshire & Wrexham Investment Zone, Anglesey Freeport, and Forth Green Freeport, and announcing the proposed sector, geography and co-investment for the Northern Ireland Enhanced Investment Zone.
• Local roads maintenance funding – By 2029-30, the government will commit over £2 billion annually for local authorities to repair, renew and fix potholes on their roads – doubling funding since coming into office. This record level of funding will enable the government to exceed its manifesto commitment to fix an additional 1 million potholes per year by the end of the Parliament.
• Grangemouth funding – The government is announcing up to £14.5 million of funding in Grangemouth to support industrial projects that can create new jobs.
• Funding for the Lower Thames Crossing in 2027-28 and 2028-29 – The government is committing a further £891 million to complete the publicly funded works for the Lower Thames Crossing, as part of its staged approach, after which the private sector will take forward construction and long-term operation.
• Port Talbot land remediation – £4.2 million for the remediation of brownfield land in Port Talbot supporting the Harbourside Innovation District, aligned to the Celtic Freeport, helping to unlock further investment.
  
• Wales DSIT spending announcements – Supporting high-skilled jobs and to drive economic growth, £10 million will be invested in the South Wales world-leading semiconductor technologies cluster.
• UK internal market package for Northern Ireland – To boost trade between Northern Ireland and Great Britain, £16.55 million will be provided over three years from 2026-27.

• Public Authorities Fraud Investigation and Enforcement Service – The government will establish the Public Authorities Fraud Investigation and Enforcement Service by 2026-27, which will recruit skilled investigators to pursue recovery of fraud against the public sector; and trial innovative approaches to enforcement activity for fraudulent Covid loans.
• International Student Levy – The government is introducing a new levy on higher education providers’ income from international students, of £925 per student per year of study, starting in August 2028 academic year 2028-29. All providers will be given an allowance for the first 220 international students per year, for whom they will not pay the charge.
• Integrated settlements for Mayoral Strategic Authorities – Confirming at least £13 billion of SR25 funding for Greater Manchester, West Midlands, West Yorkshire, South Yorkshire, Liverpool City Region, the North East, and the Greater London Mayoral Strategic Authorities for 2026-27 to 2029-30 through their integrated settlements. This empowers Mayors with greater funding flexibility to drive growth in their regions.
• Playgrounds – The government will invest £18m over two years in up to 200 playgrounds across England, renewing communities and supporting the government’s commitment to Pride in Place.
• NHS Neighbourhood Health Centres – The government is announcing plans for delivery of 250 new Neighbourhood Health Centres, of which 120 will be operational by 2030. These will be delivered through the NHS Neighbourhood Rebuild Programme through a combination of public sector investment and a new model of Public-Private Partnership. To ensure transparency and fiscal sustainability, these projects will be budgeted for as if they are on balance sheet.
• Books for secondary schools – The government will provide £5 million of new funding to state-funded secondary schools in England in 2026-27 to increase book supplies to support the National Year of Reading.
• Welsh Government Fiscal Framework – To enable the Welsh Government to support people, businesses and public services in Wales, in 2026-27 the Welsh Government’s annual and cumulative capital borrowing limits, overall Wales Reserve limit and annual RDEL and CDEL drawdown limits will all be increased by 10%. From 2027-28, each of those limits will be uprated annually in line with inflation. The government will also provide a temporary waiver of the Wales Reserve drawdown limits in 2026-27.
• Infected Blood Compensation Scheme (Amendment) Regulation – The government will update legislation to implement a number of recommendations in the Inquiry’s Additional Report, improve the administration of the Scheme, and clarify the policy intent. Subject to Parliamentary approval, these should become law by 31 December 2025.
• Compliance and enforcement – Illegal working – The government will establish a dedicated ‘hidden economy’ team within the new Fair Work Agency, launching April 2026, to take action in sectors known to have egregious breaches of employment rights legislation alongside illegal working and tax issues.
  

• Income tax Personal Allowance and higher rate thresholds– The government is maintaining the income tax Personal Allowance at £12,570 and higher rate threshold at £50,270 from April 2028 to April 2031. The additional rate threshold remains at £125,140 from April 2028 to April 2031. The Personal Allowance threshold applies UK-wide. The higher rate threshold for non-savings, dividend and property income and for property income will apply to taxpayers in England, Wales and Northern Ireland, and for savings and dividend income it will apply UK-wide. This will be legislated for in Finance Bill 2025-26.
• Inheritance tax thresholds – The inheritance tax nil-rate bands are already set at current levels until April 2030 and will stay fixed at these levels for a further year until April 2031. The forthcoming combined allowance for the 100% rate of agricultural property relief and business property relief will also be fixed at £1 million for a further year until 5 April 2031. This will be legislated for in Finance Bill 2025-26 and take effect from 6 April 2030.
• National Insurance contributions thresholds for employees and the self-employed – The government is maintaining the NICs Primary Threshold (PT) and Lower Profits Limit (LPL) at £12,570 from April 2028 until April 2031. The NICs Upper Earnings Limit (UEL) and Upper Profits Limit (UPL) will be maintained at £50,270 from April 2028 to April 2031, as well as other employer NICs relief thresholds aligned with the UEL. The government will legislate for this measure in affirmative secondary legislation in early 2028.
• Employer National Insurance contributions – secondary threshold – The government is maintaining the per-employee threshold at which employers become liable to pay National Insurance (the Secondary Threshold) at £5,000 from April 2028 until April 2031. The government will legislate for this measure in affirmative secondary legislation in early 2028.
• Student loans: Freezing Plan 2 repayment threshold for three years from April 2027 – The repayment threshold for Plan 2 student loans will be frozen at £29,385 for three years from April 2027.
• Changes to tax on property income – The government will create separate tax rates for property income. From 2027-28, the property basic rate will be 22%, the property higher rate will be 42%, and the property additional rate will be 47%. These rates will apply across England, Wales and Northern Ireland. The government will engage with the devolved governments of Scotland and Wales to provide them with the ability to set property income rates in line with their current income tax powers in their fiscal frameworks. This will be legislated for in Finance Bill 2025-26 and take effect from 6 April 2027.
• Changes to tax on dividend income – The government is changing the rates of income tax applicable to dividends. From 2026-27, the ordinary rate will be increased by 2 percentage points to 10.75% and the upper rate will be increased by 2 percentage points to 35.75%. The additional rate will remain unchanged at 39.35%. This will be legislated for in Finance Bill 2025-26 and take effect from 6 April 2026.
• Changes to tax on savings income – The government is changing the rates of income tax applicable to savings income. From 2027-28, the savings basic rate will be increased by 2 percentage points to 22%, the savings higher rate will be increased by 2 percentage points to 42% and the savings additional rate will be increased by 2 percentage points to 47%. This will be legislated for in Finance Bill 2025-26 and take effect from 6 April 2027.
• Ordering of income tax reliefs and allowances – The government is changing income tax rules so that reliefs and allowances deductible at steps 2 and 3 of the income tax calculation will only be applied to property, savings and dividend income after they have been applied to other sources of income. This will be legislated for in Finance Bill 2025-26 and take effect from 6 April 2027.
• National Insurance contributions re-rating – The government will increase the Lower Earnings Limit (LEL) and the Small Profits Threshold (SPT) by the September 2025 CPI rate of 3.8% from 2026-27. For those paying voluntarily, the government will also increase Class 2 and Class 3 NICs rates by September CPI of 3.8% in 2026-27. The LEL will be £6,708 per annum (£129 per week) and the SPT will be £7,105 per annum. The main Class 2 rate will be £3.65 per week, and the Class 3 rate will be £18.40 per week. The government will legislate for this measure in affirmative secondary legislation in early 2026 as part of the annual setting of National Insurance contributions limits and thresholds, as is standard practice.
• Voluntary National Insurance contributions (NICs) abroad – From 6 April 2026, the government will remove access to pay voluntary Class 2 NICs abroad and increase the initial residency or contributions requirement to pay voluntary NICs outside of the UK to 10 years. These changes will be made via secondary legislation laid before Parliament ahead of April 2026. The government will also launch a wider review of voluntary NICs with a call for evidence in the new year.
• Salary sacrifice for pension contributions – The government will charge employer and employee NICs on pension contributions above £2,000 per annum made via salary sacrifice. These changes will be legislated for through primary and secondary legislation which will be introduced in due course. This will take effect from 6 April 2029.
• High Value Council Tax Surcharge – The government will introduce the High Value Council Tax Surcharge a new charge on owners of residential property in England worth £2 million or more, starting in 2028-29. Local authorities will collect this revenue on behalf of central government. Revenue will be used to support funding for local government services, with further detail to be set out at the next spending review. The government will consult on implementation of HVCTS in the new year.
• Non-resident dividend tax credit – The government will abolish the dividend tax credit for non-UK residents with UK income, aligning their treatment with UK residents. This will be legislated for in Finance Bill 2025-26 and take effect from 6 April 2026.
• Tobacco Duty Rates – Duty rates on all tobacco products will increase by RPI inflation +2 ppts. These changes will take effect from 6pm on 26 November 2025. The one-off increase of £2.20 per 100 cigarettes or 50g of other tobacco products and annual uprating of tobacco duty by RPI + 2 ppts next year will take effect from 1 October 2026 and will be included in Finance Bill 2025-26.
• Alcohol Duty rates – All Alcohol Duty rates will increase in line with RPI inflation. The Small Producer Relief discounts will also be uprated so eligible small producers receive relative duty reductions as now. These changes will take effect from 1 February 2026.
• Capital allowances: Writing-Down Allowances – The government will introduce a new 40% First Year Allowance for main rate expenditure - including most expenditure on assets for leasing and expenditure by unincorporated businesses – from 1 January 2026. From 1 April 2026 for Corporation Tax and 6 April for Income Tax, main rate writing-down allowances will reduce from 18% to 14%.
  

• State Pension and Simple Assessment – The government will ease the administrative burden for pensioners whose sole income is the basic or new State Pension without any increments so that they do not have to pay small amounts of tax via Simple Assessment from 2027-28 if the new or basic State Pension exceeds the Personal Allowance from that point. The government is exploring the best way to achieve this and will set out more detail next year.
• State Pension and Pension Credit uprating for 2026/27 – The basic and new State Pension will be increase by 4.8% from April 2026, in line with earnings growth, meaning over 12 million pensioners will gain up to £575 each in 2026-27. The Pension Credit Standard Minimum Guarantee will also be uprated by 4.8% from April 2026.
• Low Value Imports – The government is removing the customs duty relief on goods imported into the UK valued at £135 or less, making them subject to customs duty from March 2029 at the latest, and consulting on implementing a new set of customs arrangements for these goods.
• Gambling Duty – Following consultation, the government will not proceed with a single tax on remote betting and gaming. Instead, the government will increase duties on remote gambling, but maintain different rates for remote betting and remote gaming. Remote Gaming Duty will increase from 21% to 40% from 1 April 2026. A new Remote Betting Rate will be introduced at 25% from 1 April 2027 within General Betting Duty. This new rate will not apply to self-service betting terminals, spread betting or pool betting. Remote bets on horseracing will be excluded from these changes and remain taxed at 15%. Bingo Duty will be abolished from 1 April 2026. A summary of responses to the consultation on the Tax Treatment of Remote Gambling has been published alongside the Budget.
• Duty free allowances – A duty free allowance of 50ml per passenger for vaping products will be introduced in October 2026, alongside moving cider and sparkling wine into the beer and still wine duty free categories, respectively.
• Vehicle Excise Duty (VED) exemption for search and rescue vehicles – The government will exempt search and rescue vehicles from VED and will work with stakeholders to design and implement an exemption from April 2027.
• Infected Blood Compensation Payments – The government will update legislation so that payments made under the Infected Blood Compensation Scheme and Infected Blood Interim Compensation Payment Scheme are relieved from inheritance tax in cases where the original infected or affected person eligible for compensation has died before the compensation is paid. First living recipients of compensation payments will also have two years in which to gift some or all of the compensation payment without an inheritance tax charge. This will be legislated for in Finance Bill 2025-26 and will apply to compensation payments made before or after 26 November 2025 and to gifts made on or after 4 December 2025.
• Qualifying Care Relief – The government will uprate Qualifying Care Relief, the amount of income tax relief available to foster carers and shared lives carers, by the September 2025 CPI rate of 3.8%. This will be legislated for in Finance Bill 2025-26 and take effect from 6 April 2026.
• Administrative Changes to Expenses and Record-Keeping for Childminders – The government confirms HMRC will update its guidance to clarify that childminders within Making Tax Digital (MTD) for income tax from April 2026 must follow MTD rules. For other childminders, HMRC will clarify how existing arrangements apply to those working from non-domestic premises.
• Married Couple’s Allowance and Blind Person’s Allowance – The government will uprate the Married Couple’s Allowance and the Blind Person’s Allowance by the September 2025 CPI rate of 3.8%. This will be legislated for through a Treasury Order and take effect from 6 April 2026.
• Employee Ownership Trusts – The government will reduce the Capital Gains Tax relief available on qualifying disposals to Employee Ownership Trusts from 100% of the gain to 50%. This will be legislated for in Finance Bill 2025-26 and take effect from 26 November 2025.
• Non-reimbursed employment expenses for homeworking – The government will remove the deduction from Income Tax for non-reimbursed home working expenses. Employers can still reimburse employees for these costs where eligible without deducting Income Tax and National Insurance contributions. This will be legislated for in Finance Bill 2025-26 and take effect from 6 April 2026.
• Employer National Insurance contributions (NICs) relief for veterans –The government will extend the employer NICs relief for employers hiring veterans in their first civilian role to April 2028, from which point support for veterans into employment will be covered through spending review settlements rather than through this tax relief. During this period, the government will consider the most effective way outside of the tax system to support veterans into employment in line with the Veterans Strategy. This extension of the relief from 6 April 2026 until 5 April 2028 will be delivered via secondary legislation in the new year.
• Inheritance Tax: Unused allowance for agricultural and business property reliefs – Any unused £1 million allowance for the 100% rate of agricultural property relief and business property relief will be transferable between spouses and civil partners, including if the first death was before 6 April 2026. This will be legislated for in Finance Bill 2025-26 and take effect from 6 April 2026.
• Inheritance Tax treatment of unused pension funds and death benefits – Personal representatives will be able to direct pension scheme administrators to withhold 50% of taxable benefits for up to 15 months and pay Inheritance Tax due in certain circumstances. Personal representatives will be discharged from a liability for payment of Inheritance Tax on pensions discovered after they have received clearance from HMRC. This will be legislated for in Finance Bill 2025-26 and take effect from 6 April 2027.
• Inheritance Tax: Anti-avoidance – The government will legislate to prevent Inheritance Tax avoidance through certain loopholes, including ensuring UK agricultural property held via non-UK entities is treated as UK-situated addressing changes in status of trust assets before and exit charge, and restricting charity exemptions to direct gifts to UK charities and clubs. This will be legislated for in Finance Bill 2025-26 and will take effect for trust exit charges from 26 November 2025, gifts to charities in lifetime from 26 November 2025 or on a death from 6 April 2026, and for UK agricultural property from 6 April 2026.
• Capping Inheritance Tax trust charges for excluded property in trusts – The government will introduce a cap of £5 milion on relevant property trust charges for pre-30 October 2024 excluded property trusts. This will be legislated for in Finance Bill 2025-26 and this will apply to trust charges from 6 April 2025.
• VAT on Private Hire Vehicle Services – Suppliers of private hire vehicle and taxi services will be excluded from the scope of the Tour Operators’ Margin Scheme from 2 January 2026, except where these are supplied in conjunction with certain other travel services.
  

• Reform of UK law in relation to transfer pricing, permanent establishment and Diverted Profits Tax – The government will legislate in Finance Bill 2025-26 to simplify taxation of related party transactions, non-resident companies trading in the UK, and profits diverted from the UK, for chargeable periods beginning on or after 1 January 2026.
• Expanding workplace benefits relief – The income tax and National Insurance exemption for employer-provided benefits will be extended to cover reimbursements for eye tests, home working equipment, and flu vaccinations. This will be legislated for in Finance Bill 2025-26 and this will take effect from 6 April 2026.
• Corporate Interest Restriction (CIR): reporting companies – The government will legislate in Finance Bill 2025-26 to simplify administration in relation to reporting companies under CIR. Most of the changes take effect for periods ending on or after 31 March 2026.
• Corporate Interest Restriction (CIR): relief for certain capital expenditure in calculation of tax-EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) – The government will legislate in Finance Bill 2025-26 to make technical amendments to CIR in respect of relief for certain capital expenditure. The changes take effect for periods ending on or after 31 December 2021.
• Making Tax Digital (MTD) administrative changes – The government will introduce new powers from 1 April 2026 to ensure MTD and the new penalty reform legislation works as intended. This will be legislated for in Finance Bill 2025-26.
• Creative Industries and Research & Development Expenditure Credits: administrative measures – The government will introduce legislation in Finance Bill 2025-26 to set out the treatment for Corporation Tax purposes of intra-group payments made in return for surrendered Research & Development Expenditure Credit (RDEC), Audio-Visual Expenditure Credit (AVEC) and Video Games Expenditure Credit (VGEC). This will come into effect for payments made on or after 26 November 2025.
• Annual Tax on Enveloped Dwellings (ATED): Out-of-time claims to relief – The ATED legislation will be updated to reflect the policy intent that relief from ATED is available to companies holding property for qualifying commercial purposes. This includes relief claims within late ATED returns, which remain subject to robust late filing penalties.
• Annual uprating of the Van Benefit Charge and Car and Van Fuel Benefit Charges for 2026-2027 – The government will uprate the Van Benefit Charge and Car and Van Fuel Benefit Charges by CPI from 6 April 2026.
• Technical amendments to residence-based tax regime – The government will publish legislation to make minor corrections to the residence-based tax regime introduced in Finance Act 2025. These changes are technical and should have minimal impact on individuals, trustees and employers. This will be legislated for in Finance Bill 2025-26 and will have retrospective effect from 6 April 2025. There are some provisions which will take effect from date of announcement, date of Royal Assent and 6 April 2026.
• Post departure trade profits – The government will introduce legislation to remove the post departure trade profits provisions from the temporary non-residence anti-avoidance legislation so that all dividends received during a period of temporary non-residence are chargeable to UK tax. This will be legislated for in Finance Bill 2025-26 and take effect from 6 April 2026.
• Aligning PAYE notifications with the Overseas Workday Relief 30% limit – The government will limit the proportion of earnings an employer can exclude from PAYE through a PAYE notification to a maximum 30% where the individual is a qualifying new resident and eligible for Overseas Workday Relief. This will be legislated for in Finance Bill 2025-26 and take effect from 6 April 2026.
• Enabling defined benefit (DB) pension scheme surplus payments to scheme members – The government will enable well-funded DB pension schemes to pay surplus funds directly to scheme members over the normal minimum pension age, where scheme rules and trustees permit it, from April 2027.
• ISA Reform – From 6 April 2027 the annual ISA cash limit will be set at £12,000, within the overall annual ISA limit of £20,000. Annual subscription limits will remain at £20,000 for ISAs, £4,000 for Lifetime ISAs and £9,000 for Junior ISAs and Child Trust Funds until 5 April 2031. Savers over the age of 65 will continue to be able to save up to £20,000 in a cash ISA each year. In addition, financial services firms will be providing new, easily navigable ways for people to find the right UK investment for them.
• Starting Rate for Savings – The Starting Rate for Savings will be retained at £5,000 for 2026-27 and will stay at this level until 5 April 2031, allowing individuals with less than £17,570 in employment or pensions income to receive up to £5,000 of savings income tax-free.
  

• Electric Vehicle Excise Duty (eVED) – The government is introducing Electric Vehicle Excise Duty (eVED), a new mileage charge for electric and plug-in hybrid cars, with effect from April 2028. Drivers will pay for their mileage on a per-mile basis alongside their existing Vehicle Excise Duty. Electric cars will pay half the equivalent fuel duty rate for petrol and diesel cars, and plug-in hybrid cars will pay a reduced rate equivalent to half of the electric car rate. The government has published a consultation which provides further detail on how eVED will work and seeks views on its implementation. The consultation will remain open until 18 March 2026.
• Local authority chargepoint capability funding – The government will allocate £100 million to local authorities and public bodies to accelerate installation of chargepoints where people live and work.
• Chargepoint: Infrastructure – The government will invest an extra £100 million in EV charging infrastructure, including to support the installation of home and workplace chargepoints.
• Business rates 100% relief for eligible electric vehicle charging points and electric vehicle only forecourts – The government is introducing a 10-year 100% business rates relief for EVCPs separately assessed by the Valuation Office Agency and electric vehicle only forecourts to ensure that they face no business rates liability.
• Company car tax: Employee car ownership schemes – At Autumn Budget 2024, the government announced it would bring employee car ownership schemes (ECOS) into scope of the Benefit in Kind rules from 6 April 2026. To allow more time for the sector to prepare for and adapt to this change in treatment, its implementation will be delayed to 6 April 2030, with transitional arrangements until April 2031.
• Capital allowances: First year 100% allowances for zero emission vehicles (ZEVs) and chargepoints – The government will extend for a further year the 100% first year allowances (FYA) for qualifying expenditure on zero emission cars and the 100% FYA for qualifying expenditure on plant or machinery for electric vehicle (EV) chargepoints. The FYA will now be in place until 31 March 2027 for corporation tax purposes, and 5 April 2027 for income tax purposes.
• Company car tax: Plug-in hybrid electric vehicle (PHEV) tax easement – The government will introduce a temporary benefit in kind tax easement for plug-in hybrid electric vehicles (PHEVs) in the Benefit in Kind system to prevent their tax charge increasing significantly due to new emissions standards. This easement will be in place from 1 January 2025 to 5 April 2028.
• Vehicle Excise Duty for cars, vans and motorcycles – The government will uprate Vehicle Excise Duty rates for cars, vans and motorcycles in line with RPI from 1 April 2026.
• Vehicle Excise Duty for heavy goods vehicles (HGVs) and the HGV levy – The government will uprate Vehicle Excise Duty for heavy goods vehicles (HGVs) in line with the RPI from 1 April 2026. The government will also uprate the heavy goods vehicle levy in line with the RPI from 1 April 2026.
• Vehicle Excise Duty (VED) – Expensive Car Supplement (ECS) – The government will increase the Vehicle Excise Duty Expensive Car Supplement threshold to £50,000 for zero-emission vehicles only. This change will take effect from 1 April 2026 and will apply to ZEVs registered from 1 April 2025 onwards.
• Electric Car Grant – The government will provide an additional £1.3 billion funding for the Electric Car Grant and extend funding to 2029-30.
  

Rachel Reeves | Chancellor of the Exchequer

"We are rebuilding our economy. Over the last sixteen months, we have overhauled our planning system – to get Britain building; Forged new trade deals, with the United States, India and the European Union; Reformed our visa system to bring the brightest and the best to Britain; We changed our fiscal rules [redacted political content] and raised public investment to its highest level in four decades; And in last year’s Budget, I raised taxes on business and the wealthiest and we used that money - to fund the biggest ever settlement for our National Health Service. They were the fair and necessary choices. And we faced opposition to them. From opponents to planning reform, who will always demand that the future is built somewhere else, not in their back yard; Opponents to trade, who want to take us down the path of isolation and division; Opponents to investment – who believe that the only good thing a government can do is get out of the way; Opponents who insist that the only way to balance the books is to cut public spending; And opponents who say that we don’t need to balance the books at all. But we made these choices for a reason. Investment, not cuts, to our public services; Stability for our public finances – the single most important factor in getting the cost of living down; And economic growth – the best means to improve wages, create jobs, and support public services. That is what our plan – that is what this government, and our Prime Minister - is all about. Today’s Budget builds on the choices that we have made since last July. " Read full speech here.

Kemi Badenoch | Shadow Prime Minister

"After constant leaks, it is now confirmed that Labour have hiked taxes by £26 BILLION. We all saw it coming. A tax raid on working people, pensioners and savers to pay for more benefits. In just 14 months she’s broken her promise to the electorate twice. It's clear that Labour doesn't have a plan to turn our economy around. Only the Conservative Party has a credible plan, the team and backbone to deliver a stronger economy." Read full speech here.

Shevaun Haviland | Director-General of the British Chambers of Commerce

“The Chancellor has listened to our calls and made the right choice by not piling major new tax rises on businesses’ shoulders, which will calm nerves. Firms will be pleased to see the commitment to transport and infrastructure, and critically the funding for planners the BCC has called for. It is now vital that the Government delivers on these promises. Business will welcome support for youth employment, stamp duty relief, protection for capital spending, a reduction in business rates multipliers and some investment tax breaks. They will be worried about salary sacrifice changes, mandatory wage increases, and retention of the energy profits levy, which will maintain cost pressures. Alongside this, we have seen UK-wide business support funding of almost £1bn axed and replaced with a system of piecemeal support which favours select urban regions. That risks further regional inequality and damage to rural economies. While most businesses will weather this new financial landscape, they are still being squeezed by rising costs. Many will be disappointed that this Budget did not provide a more compelling blueprint to deliver transformational growth.” Read full response here.

Confederation of British Industry

“The CBI's Autumn Budget campaign asked the government to take a strategic approach to the tax system and deliver the interventions required to get the government's growth mission in gear. This included outlining how the government could tackle key delivery barriers in the here and now to fast track infrastructure, maximise workforce potential, scale technology, and boost competitiveness. Setting the fiscal headroom at £21.7bn should mitigate the risk of the Chancellor having to make further tax and spend decisions over the shorter term and better position businesses to plan over the longer term. The government has also listened to our calls to address the resourcing challenges in the planning system, expand technology adoption support to additional sectors, and provide funding to support young people back into employment, education, and training. The CBI and our members are now fully focused on working with the government to turn the strengthened fiscal position into the tangible policy delivery required to achieve the shared growth mission. " Read full response here

Anna Leach | Chief Economist

“Whilst this Budget further increases the tax burden on business, it is partially offset by some helpful measures. We welcome the funding for the Youth Guarantee and the full funding of SME apprenticeships for those eligible under 25, which will support young people in their careers. The decision not to converge the two rates of Landfill Tax will also be a relief to the construction sector. We also welcome the more than doubling of the headroom against the fiscal rules. This will help calm the frenzy of speculation which has surrounded fiscal events. The decision to only assess performance against the fiscal rules once a year may also contribute to greater stability in policy making. But the leaking of policy choices in the run-up to this Budget is of grave concern. It has contributed to substantial declines in business and consumer confidence, with real impacts on economic activity. This Budget does not substantively change the UK’s growth outlook, however – the OBR judge that none of the policies announced have a material impact on GDP. Public spending is higher, and business investment even lower than before. The scaling back of National Insurance relief on pension contributions – even while the government has launched its Pension Commission – will undermine retirement savings and the very investment pools that we need, as well as heaping further costs on employment.” Read full response here.