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After months of speculation, Chancellor Rt Hon Rachel Reeves delivered the long-anticipated Autumn Budget on Wednesday 26th November 2025, one of the most significant fiscal statements in recent years.
Amid rising welfare costs following policy revisions and facing a fiscal black hole, Reeves has introduced a mix of structural and targeted tax measures to increase revenue.
In a notable U-turn, the Chancellor dropped her plans to increase income tax rates, which would have been the first rate increase since 1975. Instead, the freeze on income tax thresholds has been extended by three years to 2031, together with a range of other measures including those around pension contributions made by salary sacrifice; increases in tax rates on dividends, property and savings income; and a new mileage-based tax on electric cars. A quieter, but no less costly way to balance the books.
We’ve put together a breakdown of 10 key points that may impact businesses and business owners, as outlined by Rachel Reeves in Wednesday afternoon’s announcement:
1. Capital allowances: The £1m annual investment allowance (AIA) remains in place, providing full tax relief in the year of acquisition for qualifying plant and machinery. A new 40% first year allowance will also be introduced from January 2026 to encourage expenditure and investment in assets where other reliefs are not available (for example assets bought for leasing and by unincorporated businesses). The main pool writing down allowance will reduce from 18% to 14% from April 2026.
2. Minimum wage increase: The chancellor has confirmed that from April 2026, the national minimum wage will be increased by 4.1% to £12.71, giving a pay rise for millions of workers. The government have said this change will increase gross annual earnings for around 2.4 million low-paid workers.
3. Fuel duty: The chancellor has announced that the 5p cut in fuel duty will be extended until September 2026, providing temporary relief for transport and logistics businesses. The 5p cut will then be reversed through a staggered approach.
4. Capital gains tax: Effective immediately, capital gains tax relief on shares sold by business owners to Employee Ownership Trusts (EOTs) has been halved from 100% to 50%.
5. Pension contributions made by salary sacrifice: Although not effective until April 2029, there will be an additional tax burden to be borne by both employers and employees following the capping of National Insurance Contributions (NIC) relief to pension contributions made by salary sacrifice to the first £2,000 per year.
6. Tax payable on dividends, savings and property income: From April 2026, the basic and higher rates of tax on dividends will increase by 2% to 10.75% and 35.75% respectively (with the additional rate remaining unchanged at 39.35%). From April 2027, the rate of tax on savings and property income will increase by 2% across all bands, making the basic rate 22%, the higher rate 42% and the additional rate 47%.
7. Property tax reform: A £2,500 council tax surcharge on properties worth £2 million and above will be put in place, set to raise £400 million in 2029-30. This will rise to £7,500 for properties over £5 million. In addition, the Government is reforming Stamp Duty Land Tax (SDLT) rules to close loopholes and improve fairness, particularly around mixed-use property and multiple dwelling relief.
8. Business rates reform: From April 2026, over 750,000 retail, hospitality and leisure businesses will benefit from permanently lower business rate multipliers, worth nearly £900 million annually, providing long-term certainty for high street businesses. This will be funded through higher rates on properties valued at over £500,000. Electric vehicle infrastructure businesses will also benefit from a 10-year 100% business rates relief for EV charging points and EV-only forecourts, supporting the transition to green transport.
9. Pay per mile tax: The Government has announced it will be introducing a ‘pay per mile’ tax for drivers of electric vehicles. From April 2028, drivers of battery electric cars will be hit by a 3p per mile tax, rising annually in line with inflation.
10. Regional investment: There will be £13 billion of flexible funding for seven mayors to invest in skills, business support and infrastructure.
Closing her statement, Chancellor Rachel Reeves stated, “Those are my choices. Not austerity, not reckless borrowing, but cutting the debt, cutting waiting lists and cutting the cost of living.”
What this means for you
These measures will impact everything from cashflow and payroll costs to investment planning and property ownership. Businesses should review their tax strategy and financing options now to stay ahead.
If you think you’ll be impacted by the changes outlined in 2025’s Autumn Budget, we’re happy to support you. If you’d like to review your financing options or benchmark your existing facilities, get in touch with one of our experts today on 0161 633 2548 or email info@pmdbusinessfinance.co.uk.