Published: 28th November 2025
• Many possible changes were the subject of speculation leading up to the Budget: this list includes
things that have been ruled out, as well as changes that the Chancellor announced
• These key points include measures that were announced previously but are about to come into force
• Measures which will not take effect until future dates are listed separately below
Implemented immediately
• 100% CGT relief for disposals of shares to Employee Ownership Trusts is restricted to 50% from 26
November 2025
• New 40% First Year Allowance for most ‘main rate expenditure’ which does not already qualify for ‘full
expensing’ or the £1 million Annual Investment Allowance (e.g. assets for leasing and assets above £1
million bought by unincorporated businesses)
• A new Advance Clearance Service to provide certainty for some R&D claims is to be introduced ‘in
Spring 2026’ following consultation
• Income tax thresholds and bands frozen (and continue to be frozen until April 2031)
• Income tax rates on dividend income rise from 8.75% to 10.75% (basic rate) and from 33.75% to
35.75% (higher rate); additional rate remains 39.35%
• The same increase will apply to corporation tax payable on loans to close company participators which
are not repaid to the company within 9 months of its year end
• The basis for company car benefit charges increases by one percentage point for 2026/27
• Benefit charges for company vans and private fuel in company vehicles increased
• Employers’ NIC threshold frozen at £5,000, and NIC Upper Earnings Limit remains £50,270 (also frozen
until 2031)
• NIC Lower Earnings Limit and Small Profits Threshold increased by 3.8%
• Confirmation of the introduction of Making Tax Digital for Income Tax Self-Assessment from April
2026, with easements for the first year in relation to filing penalties
• Writing down allowances on main rate expenditure cut from 18% to 14%, and on special rate
expenditure from 6% to 3%, from 1 April 2026 (companies) or 6 April 2026 (unincorporated trades)
• Extension until March 2027 of the 100% first year allowance for qualifying expenditure on zero
emission cars and charging points for electric vehicles
• Corporation Tax late filing penalties doubled from 1 April 2026
• CGT rate on disposals qualifying for Business Asset Disposal Relief increased from 14% to 18%
• CGT relief on incorporation to be claimed from 6 April 2026, rather than applying automatically
• ‘Carried interest’ moved to the income tax regime, with a discount for certain qualifying disposals
• IHT Agricultural Property Relief and Business Property Relief at 100% will only apply to the first £1
million of combined value; above that limit, the maximum relief will be 50%; the £1 million will be
transferable between spouses and civil partners
• IHT Business Property Relief restricted to 50% for all ‘unlisted’ shares which are quoted on recognised
stock exchanges such as the Alternative Investment Market
• VAT rules changed to prevent private hire vehicle operators using the ‘Tour Operators Margin Scheme’
to pay VAT only on their profit margin
• From July 2026, the Motability scheme will be reformed to reduce the relief available on high-end cars
• Fuel duty remains frozen, and the temporary 5p cut announced in March 2024 will be extended to 31
August 2026
• Increases in online gambling taxes from April 2026
• Increases in National Living Wage and State pension in line with the September 2025 inflation figure
(3.8%)
• The ‘two-child benefit cap’ for Universal Credit is removed, increasing the available benefits for
claimants with more than two children
• Income tax rates on property and savings income rise from 20% to 22% (basic rate), from 40% to 42%
(higher rate), and from 45% to 47% (additional rate)
• For under-65s, no more than £12,000 of the annual £20,000 ISA investment limit can be invested in a
cash ISA; the other £8,000 will have to be in stocks and shares
No change, or later
• High Value Council Tax Surcharge to be introduced on properties worth more than £2 million (in 2026)
to apply from April 2028: £2,500 for properties over £2 million rising to £7,500 for properties over £5
million
• New mileage based e-Vehicle Excise Duty payable on use of electric and hybrid cars from April 2028
• From April 2029, salary sacrifice schemes putting more than £2,000 into an employee’s pension will be
charged to NIC as if cash salary was paid
• All VAT invoices to be electronic from April 2029
• All low value import consignments to be subject to customs duties from April 2029
• Company car tax rates were announced last year for 2028-29 and 2029-30, to provide long-term
certainty; the incentives for purchasing electric vehicles will be maintained
• Plan 2 Student Loan repayment thresholds frozen until April 2030
