Autumn Budget 2025: What The Key Changes Mean For You, Your Family And Your Business

The Autumn Budget on 26 November 2025 introduces several measures that will influence the decisions individuals, families and businesses make over the coming year. Government announcements can feel overwhelming, particularly when you are working hard to plan for stability and growth. Gareth Horner, Managing Partner, provides an overview here highlighting the most relevant points to those we work with, with a clear focus on what the changes mean in practice.

Support for employers and businesses

The Budget contains several measures that will influence staffing decisions, budgets and long-term planning.

National Minimum Wage and National Living Wage increases

From 1 April 2026, the National Living Wage for workers aged 21 and over will rise to £12.71 per hour (up from £12.21).

Practical impact:

• Employers with larger workforces, part-time roles or hourly-paid teams will see an immediate rise in payroll costs.
• Working patterns, overtime arrangements and internal pay structures may need review.
• Workforce planning and budgeting exercises should begin early to avoid pressure points.

Our Employment Law team are on hand to assist you with reviewing contracts and staffing structures to ensure you remain compliant and prepared.

Employer National Insurance contributions

Employer NIC thresholds remain frozen, but some businesses may benefit from other Government adjustments to payroll costs, which could help offset the impact of the freeze.

Skills, apprenticeships and training funding

The Government has confirmed additional funding to support apprenticeships, including a new commitment to fully fund training for under-25 apprentices in small and medium-sized businesses.

Practical impact:

• Employers may find it easier to recruit and train early-career staff.
• This may help organisations facing skills shortages or looking to grow their teams sustainably.

Property and Commercial Property

Several announcements will influence buying, selling, letting and development decisions across the region.

Stamp Duty Land Tax (SDLT)

SDLT thresholds remain unchanged, giving buyers and investors short-term stability as they plan purchases and sales.

Practical impact:

• No immediate SDLT rate changes provide short-term certainty for buyers.
• First-time buyer support remains under review, so clients may wish to act before any Spring 2026 reforms.
• Investors can plan transactions without unexpected near-term tax changes.

Capital Gains Tax on residential property

Although CGT bands remain unchanged for now, increases to tax on rental and investment income may affect planning for landlords and property owners.

High-Value Home Surcharge (Mansion Tax)

The Budget introduces a new annual surcharge for homeowners whose properties are valued at more than £2 million, effective from April 2028. The surcharge will be tiered based on property value, starting at around £2,500 per year for homes valued between £2 million and £2.5 million, increasing to around £7,500 for the highest-value homes.

Practical impact:

• Buyers and owners of high-value homes will need to factor this annual cost into long-term budgeting and affordability assessments.
• For those considering purchasing a property near the £2 million threshold, you may wish to review the implications before committing.
• Owners of second homes or investment properties should assess how the surcharge affects net returns.
• Families with older relatives in high-value homes may need to consider whether the ongoing cost could become burdensome, especially where property values continue to rise.

Business rates support

Relief for retail, hospitality, and leisure businesses will continue, with ongoing business rates support designed to ease financial pressures, as well as possible extensions of other targeted schemes that help reduce operational costs in these key sectors. These measures aim to support recovery and growth, particularly for high-street businesses and those in the leisure and hospitality industries.

Practical impact:

• Extended reliefs may ease financial pressure on retail, hospitality and leisure businesses.
• The multiplier freeze offers stability for commercial tenants and property owners, ensuring that business rates bills remain predictable and preventing unexpected cost increases during planning and budgeting for the year ahead.

Planning and growth zones

The continuation of funding for Growth Zones may create new opportunities for development and investment across parts of the South.

Practical impact:

• Developers may see increased opportunities within designated zones.
• Landowners could experience greater interest from investors or development partners.
• Improved infrastructure could support relocating or expanding businesses.

Our Property and Commercial Property teams can help you understand the impact of these measures on your plans or projects.

Changes to investment, savings and property income taxation

The Budget confirmed higher tax on certain types of income:

Dividend income – from 6 April 2026

• Basic-rate dividend tax: 10.75% (up from 8.75%)
• Higher-rate dividend tax: 35.75% (up from 33.75%)

Savings interest, rental income and other property income – from 6 April 2027

• Basic rate: 22% (up from 20%)
• Higher rate: 42% (up from 40%)

Practical impact:

• Landlords will see reduced net rental yields.
• Investors may see reduced return on savings and accumulated investments.
• Business owners taking dividends should factor this into remuneration planning.

Employee Ownership Trust changes

The Budget confirmed changes to the tax relief available on sales to Employee Ownership Trusts (EOTs), reducing the Capital Gains Tax relief for business owners transferring their company into an EOT.

Practical impact:

• Business owners considering transitioning their company to employee ownership may face a higher tax charge than under the previous regime.
• Those exploring EOTs as part of succession planning may wish to revisit the timing and structure of any proposed sale.
• Owners already planning an EOT transfer should review whether the reduced relief affects the commercial viability of their plans.

Frozen tax thresholds until 2031

Income tax and National Insurance thresholds will remain frozen until 2031. The Personal Allowance, which is the amount you can earn before paying income tax, will stay at £12,570. This means that income up to this amount will continue to be tax-free. The basic rate band remains at £50,270, with income over this amount taxed at the higher rate of 40%. For those earning over £125,140, the additional rate of 45% will apply. National Insurance contributions will also start at the £12,570 threshold (or £242 per week), with employees paying contributions above this amount. For employers, the Secondary Threshold (the level at which employer NICs are paid) remains at £5,000 per year.

Practical impact:

• As wages rise with inflation, more individuals may drift into higher tax bands, a phenomenon known as "fiscal drag."
• Those receiving pay increases, bonuses or dividends may see a larger proportion of their income taxed at higher rates.
• Families may need to revisit their tax‑efficiency strategies earlier than expected, as frozen thresholds push more earnings into the higher tax brackets.

Uprating of the State Pension

The State Pension will increase by 4.8% from April 2026, raising annual payments for many pensioners by up to approximately £575 depending on entitlement.

Significant changes to Agricultural and Business Reliefs

These are the most far-reaching reforms for rural communities, farming families and business owners.

New £1 million 100% relief allowance (APR/BPR)

From April 2026, agricultural and business assets will fall under a single £1 million allowance for 100% relief, with 50% relief on qualifying value above that level.

Practical impact:

• Some estates that previously faced no Inheritance Tax may now face a liability.
• Diversified farms and estates (holiday lets, commercial units, rental property, etc.) may see higher exposure.
• Cashflow and liquidity planning becomes essential where the estate is land rich but cash poor.

Transferability between spouses and civil partners

Any unused part of the new allowance can be transferred to a spouse or civil partner, allowing many couples to protect up to £2 million of qualifying assets.

Practical impact:

• Couples benefit from continued protection of high-value agricultural or business holdings.
• Asset restructuring purely for relief purposes may be less necessary.
• Wills and succession plans should still be reviewed to ensure full use of the allowances.

Impact on landowners, farmers and business owners

In practical terms, the reforms may require you to:

• Review whether your estate has sufficient liquidity to meet future IHT liabilities.
• Revisit partnership agreements, business structures or land ownership arrangements.
• Consider gifts, Trust planning or restructuring ahead of the April 2026 deadline.
• Update Wills and succession documents to reflect the new allowance and relief structure.

Our Wills, Probate, and Estate Planning team can work alongside your accountant or rural adviser to build a plan that protects your estate for the next generation.

Personal Finance and Estate Considerations

Inheritance Tax thresholds remain frozen

The standard Inheritance Tax nil‑rate band (NRB) remains at £325,000 per individual. If you pass your main home to direct descendants (children, grandchildren, etc.), you may also benefit from the residence nil‑rate band (RNRB), which remains at £175,000 per individual. Taken together, for a qualifying estate these allowances can allow up to £500,000 to pass free of Inheritance Tax. For a couple using both allowances fully, that figure could be as much as £1 million.

These thresholds have been frozen for many years, and the freeze was reaffirmed in the 2025 Budget, meaning they remain unchanged until at least 2030/31.

Practical impact:

• As property prices and asset values continue to rise, more estates may exceed these thresholds, increasing the likelihood that Inheritance Tax becomes payable.
• Families and couples who wish to pass on their home to children or grandchildren should review their Wills and estate structure to ensure they make full use of the NRB and RNRB, especially where property is likely to appreciate or estates are already near threshold levels.

Trust and succession planning updates

The Budget confirmed that the Government will proceed with plans to streamline and modernise the taxation of Trusts, with changes expected to make Trust structures easier to administer in future.

Practical impact:

• Some families may benefit from modernising older Trust structures.
• Simplified Trust taxation may create opportunities for more flexible planning.

Our team can help you develop a long-term strategy that reflects your wishes and provides clarity for your loved ones.

What should you do now?

The Budget can affect a wide range of decisions; from hiring and investment to buying property and planning for succession. Early advice can help you stay prepared and avoid reactive choices.

You may benefit from speaking with us if:

• You own agricultural land, a business or diversified rural assets.
• You are planning to buy or sell residential or commercial property.
• You employ staff and want clarity on cost changes coming in 2026.
• You wish to review your Will, gifting strategy or estate structure.
• You want reassurance that your long-term plans remain on track.

Gareth commented on the Budget, "Many of the measures in this year's Budget will have a very real impact on the decisions our clients make over the coming months. The introduction of the new £1 million relief allowance for agricultural and business assets is one of the most significant changes we have seen for rural families and business owners in recent years, and we know that many people will already be thinking about how this affects the future of their land or business.

"For employers, the rise in wage bands and the changes to National Insurance will continue to influence staffing budgets and workforce planning, while property investors and homeowners will be looking closely at how the wider tax landscape affects their next move. These are practical issues that shape day-to-day decisions as well as long-term plans."

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.