Autumn Budget 2025: facing the future

your complete guide to every key change

The Autumn Budget 2025 arrives at a critical moment for the UK economy. After years of inflationary pressure, rising borrowing costs, and ongoing demands on public services, the Chancellor’s message this year is one of caution, recalibration, and long-term restructuring.

Rather than offering headline-grabbing tax cuts, this Budget signals a shift toward a more sustainable and fair fiscal framework, one that seeks to raise revenue while supporting public investment and reshaping the way Britain taxes income, savings, and wealth.

economic and fiscal landscape
The government’s fiscal plans are anchored in expectations of modest but steady economic growth. Budget projections point to improving stability, supported by infrastructure investment and gradual productivity recovery.

At the same time, the Office for Budget Responsibility forecasts the UK tax burden will rise to around 38% of GDP by the end of this Parliament, a historic high that underlines the government’s revenue-raising approach while maintaining essential public spending.

The Chancellor also reaffirmed a commitment to reducing day-to-day borrowing and placing debt on a downward path. These fiscal rules explain the absence of major tax cuts in the short term.

personal taxation: the quiet squeeze continues
Income tax thresholds remain frozen, extending fiscal drag as wage growth pushes more earners into higher tax bands. National Insurance remains unchanged for now, though simplification remains on the government’s agenda.

Dividend tax thresholds also stay frozen, and the planned reduction of the Dividend Allowance from April 2026 is still on course, tightening the landscape for investors and owner-directors who rely on dividend income.

pensions and savings: a defining shift for higher earners
From 2029, a £2,000 cap will apply to salary-sacrifice pension contributions before National Insurance becomes payable. This marks a significant change for higher earners and is expected to raise £4.7 billion by 2029/30.

The 25% tax-free pension lump sum remains untouched for now, though pension reform continues to be an area under review.

While speculation surrounded potential ISA allowance cuts, the Budget confirmed instead a broader ISA review in 2026, signalling that changes may still lie ahead.

property, wealth, and capital taxes
A new surcharge on properties valued above £2 million was announced, with full details to follow. The direction is clear: a greater share of the tax burden is shifting toward wealth and high-value assets.

Capital Gains Tax rates remain unchanged, but allowances continue to reduce. Reliefs for second homes and property portfolios will also be reviewed, raising future costs for landlords and investors.

business and corporate taxation
Corporation Tax remains at 25%, with no increases signalled. Importantly, full expensing has now been made permanent, allowing businesses to deduct 100% of qualifying investment from taxable profits.

R&D incentives have been expanded, particularly for SMEs in science, technology, AI, and advanced manufacturing. A new Innovation Allowance will further support early-stage growth.

Business rates reform will introduce more frequent revaluations, while targeted support for retail and hospitality continues through 2025/26.

public services and infrastructure
Despite fiscal tightening, public investment remains central. Additional NHS funding will focus on digital modernisation, while transport, housing, energy networks, and green projects receive long-term backing.

cost of living measures
Benefits and Universal Credit will rise with inflation from April 2026. Energy support continues for vulnerable households, and the rollout of 30-hour free childcare expands further for working families.

a subtle but significant shift in the tax system
While not dramatic, this Budget represents a meaningful recalibration, tightening reliefs, taxing income and wealth more evenly, and prioritising long-term stability over short-term wins.

For individuals, investors, and business owners, forward planning has never been more important. Understanding these changes now is key to navigating the UK’s evolving tax landscape.

need help navigating the autumn budget 2025?
If you’re unsure how these changes affect your tax position, business strategy, or long-term planning, our expert advisors are here to help.

Speak to DAS Accounting & Partners for personalised tax planning, business advisory support, and strategic guidance.

Get in touch today to discuss how the Autumn Budget 2025 impacts you and how to stay ahead of the changes.