28/11/2025
Budget Update 2025
Main headlines for the self employed and small company
A total farce on budget day as the full budget changes were leaked and uploaded into the internet 45 minutes before the chancellor stood up.
The labour government in their manifesto at the last election stated no tax rises would be implemented. This budget goes against that pledge as certain income the tax rate increases from 20% to 22%
There are also other measures that increase costs of every business
The following changes are made to English tax rates. Scottish tax rates will be notified later.
For the average client the following changes will be impacted
- A freeze on personal tax thresholds all the way to 2031-2032, meaning that as inflation happens, the personal allowance of £12,570 will be frozen and therefore this is called a fiscal drag, and therefore your income after these frozen allowances will not go as far.
More clients will be pushed into the 40% tax rates
- A new 22% tax rate from April 2026 if you have property/rental income. This is currently 20%. Higher rate tax payers this increases from 40% to 42%
This is making the tax system more complicated with new tax bands.
- a new 22% tax on savings and interest received. If you have over £1000 of interest then the tax rate rises from 20% to 22% from April 2027
- If you don't claim 100% tax relief on your assets in year one, the following years the tax relief on your assets will reduce from currently 18% to 14%
This will directly increase your tax in future years
- Diesel and Petrol fuel duty is frozen until September 2026, then there will be regular increases, driving up the cost of fuel
- A new annual 3p per mile mileage tax on electric vehicles commencing April 2028. So in addition to Road Fund Licence if you do 30,000 miles per annum you will pick up a £900 extra tax charge. Vans are exempt !!
- A new annual 1.5p per mile mileage tax on hybrid vehicles commencing April 2028. So in addition to Road Fund Licence if you do 30,000 miles per annum you will pick up a £450 extra tax charge. Vans are exempt !!
- A new real time forecourt system so that you can see the cheapest fuel for the surrounding area, designed to stop harmonising garages
- Dividend tax rate up to 10.75% from April 2026 for basic rate tax payers and 35.75% for higher rate
-Business Asset Disposal relief tax increasing from 14% to 18% from April 2026, this is the new tax on selling businesses
- English regional mayors will be given the power to charge tourists a tax for staying overnight in their towns and cities, this will be £1.30 per night
-Alcohol duty up
-Business rates down for Leisure sector
-Council tax surcharge of £2500 pa for properties over £2 M and £7500 pa for properties over £5M
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