Rachel Reeves’ Autumn Budget 2025 – What It Means for You

Today’s Budget was one of the most anticipated in recent years. After weeks of

speculation and even a leak from the Office for Budget Responsibility, Chancellor

Rachel Reeves has finally laid out her plans. Her aim was to remain in post while

boosting her credibility with financial markets. This was not the budget for growth.

If you’re a business owner or landlord, here’s what you need to know – and what you

should be thinking about now.

1. Tax Changes – Targeting Business Owners

• Income tax thresholds frozen until 2031 therefore not moved for 10 years– This

means more people will drift into higher tax bands as wages rise – a classic case of

fiscal drag. For businesses, employees may be asking for pay rises to offset tax

creep.

• Property income tax up by 2 percentage points from April 2027 – Landlords will see

basic, higher, and additional rates rise to 22%, and 42%. If you’re relying on rental

income, please get in touch to see if there is a more tax efficient way of taking your

rental profits..

• Dividend income tax up by 2 percentage points to 10.75% under £50k, and 35.75%

for over from April 2026. At Adams Moore we will be working out the best way to

take money from your company over the next few weeks.

• Tax on savings income tax is also going up by 2 percentage points to 22%, 42% and

47%

• Salary-sacrifice pension contributions above £2,000 will be taxed from 2029. Those

people that try and keep their earnings under the £50k and £100k limits will be at

risk.

• There were no changes to first year allowances up to a £1 million on purchase of

capital assets.

• From April 2026 Business Asset Disposal Relief will further rise from 14% to 18%.

2. Employment Costs Are Rising

• National Minimum Wage will rise to £12.71 per hour for over-21s from April 2026.

3. IHT

• No changes in IHT have been announced, with thresholds frozen.

4. Tax Compliance & Administration

• Late Corporation Tax Penalty: The penalty for late filing of a Corporation Tax return

will double from April 2026.

• Making Tax Digital (MTD) Penalties: The new penalty system for late submission

and late payment will be applied to all Income Tax Self Assessment (ITSA)

taxpayers not already joining MTD from April 2027. If you are a sole trader, please

get in touch and we can talk you through your options.

• No changes to the Vat thresholds.

5. The Mansion Tax Arrives

From April 2028, a High Value Council Tax Surcharge will apply to properties worth over

£2 million. £2,500 per year for homes valued between £2m and £2.5m, up to £7,500 for

homes worth £5m+.

In Summary

What you should be thinking of now?

• Calculate the impact of the higher dividend tax on your drawings from your business.

We will be calculating the optimal split of Salary and Dividends over the coming

weeks.

• Budget for wage increases and factor in the impact of frozen tax thresholds on staff

retention.

• Cash Flow Planning: With tax rises phased in over the next few years, proactive

planning is key.

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Our View at Adams Moore, is this Budget is about raising revenue without headline

income tax hikes, and the burden falls squarely on wealth, property, and business

owners. The budget further makes the tax system more complex, and will require us all

to be more savvy.

If you’d like tailored advice on how these changes affect your business or property

investments, get in touch with us today.

Abbey Sandra and Martin

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Adams Moore - Total Support for You and Your Business

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