The latest Autumn Budget announced a series of significant tax and financial changes that will impact individuals, investors, businesses, and property owners over the next few years. At Mullen Stoker, we’ve analysed the budget and highlighted the key points, to help you understand what’s changing, when the measures come into effect, and how early planning can help you stay ahead.
Below is a clear breakdown of the major updates.
Income Tax: Threshold Freeze and Rising Rates
Income tax thresholds will remain frozen until 2030/31, continuing the long-running trend of fiscal drag. With wages increasing but tax bands standing still, more people are expected to move into higher tax brackets over time.
Several targeted tax rises were also confirmed:
- Property income tax will increase by two percentage points from April 2027, moving to 22%, 42% and 47% for basic, higher and additional rate taxpayers.
- Dividend tax will rise by two percentage points from April 2026, with the basic rate moving to 10.75% and the higher rate to 35.75%.
- Savings income tax will also rise by two percentage points from April 2027, matching the revised property income tax rates.
These changes will notably affect landlords, savers, and investors, particularly those who rely on returns from diversified income streams.
Corporation Tax: Adjustments to Capital Allowances
Businesses face meaningful adjustments to capital allowance reliefs designed to influence long-term investment behaviour.
- The main rate of Writing Down Allowances will fall from 18% to 14% from April 2026, reducing ongoing annual tax relief on qualifying assets.
- A new 40% first-year allowance will launch in January 2026, enabling companies to claim a larger upfront deduction in the year of purchase.
For companies planning significant investment or equipment upgrades, careful timing and tax forecasting will be crucial.
Pension Salary Sacrifice: New NI Charges
From April 2029, pension contributions made under salary sacrifice above £2,000 a year will no longer be exempt from National Insurance.
This is a substantial change that may affect:
- Employees who maximise pension contributions through salary sacrifice
- Employers offering enhanced or flexible remuneration packages
Now is an excellent time for both employers and individuals to review pension planning strategies.
Property Tax: High-Value Council Tax Surcharge
Owners of high-value residential properties will see a new high-value council tax surcharge introduced from April 2028.
The charge will apply to properties valued at £2 million or more, with four bands:
- £2,500 for properties worth £2m–£2.5m
- Scaling up to £7,500 for properties valued above £5m
This will be particularly relevant for premium homeowners and landlords with higher-value portfolios.
Savings, ISAs and Dividend Changes
Savers will face a reduction in tax-free allowances. From April 2027, the annual limit for cash ISAs will fall from £20,000 to £12,000, except for savers aged over 65 who retain the higher allowance.
For business owners, another important change is the reform of capital gains tax relief for sales to employee-owned trusts. The relief, previously at 100%, has now been reduced to 50% with immediate effect, which may influence decisions around succession planning and employee ownership structures.
Student Loans
The Government has confirmed a three-year freeze on the repayment and interest rate thresholds for Plan 2 student loans, beginning in 2027/28.
This freeze will increase the repayment burden for graduates as wages rise but thresholds remain static.
Electric Vehicles: New Pay-Per-Mile Charging
Electric vehicle owners will face a new motoring tax framework. From 2028/29, EV drivers will be charged 3p per mile under a new pay-per-mile scheme.
However, there is some relief: the threshold for the “expensive car supplement” under Vehicle Excise Duty will rise from £40,000 to £50,000 for EVs from April 2026, easing the tax position for many new electric vehicle purchases.
E-Invoicing: A Step Towards Digital Efficiency
Electronic invoicing (e-invoicing) will become mandatory for all VAT invoices in B2B and B2G transactions from April 2029. E-invoicing enables the direct digital exchange of invoice data between accounting systems, helping businesses process invoices faster, reduce errors, and improve compliance. The government will undertake stakeholder engagement from January 2026 to finalise the framework, giving companies time to prepare their systems and processes for a smooth transition.
Preparing for the Changes Ahead
Many of these measures have long lead-in periods, but planning early can make a significant difference, especially for business investments, pension contributions, personal tax strategy and property ownership.
At Mullen Stoker, our tax and advisory teams are ready to help you understand how these changes could affect your personal or business finances and identify opportunities to optimise your position.
