26/11/2025
๐๐๐๐๐บ๐ป ๐๐๐ฑ๐ด๐ฒ๐ ๐ฎ๐ฌ๐ฎ๐ฑ - ๐๐ผ๐บ๐ฒ ๐ธ๐ฒ๐ ๐ฝ๐ผ๐ถ๐ป๐๐ ๐ฎ๐ ๐ฎ ๐ด๐น๐ฎ๐ป๐ฐ๐ฒ
Income tax and national insurance
โข Income tax and national insurance thresholds will be frozen for another three years from 2028, continuing a freeze implemented by the previous government. This will bring more people into higher tax bands.
โข Reeves admits this decision will โaffect working peopleโ but says changes to the tax system will ensure the wealthiest contribute the most.
โข Headline rates of income tax, VAT and national insurance will not go up, which Reeves says means Labour has kept its manifesto pledge not to raise taxes on working people.
Property and council tax
โข The basic and higher rates of tax on property, dividend and savings income will go up by two percentage points each.
โข From April 2028 there will be a high-value council tax surcharge โ AKA the โmansion taxโ โ for properties worth more than ยฃ2m, of ยฃ2,500 a year, rising to ยฃ7,500 for properties worth more than ยฃ5m.
Pensions
โข From April 2029, there will be a ยฃ2,000 cap on the amount that can be put into a pension and shielded from national insurance contributions through salary sacrifice. Contributions above that level will be taxed in the same way as other employee pension contributions.
โข Removing tax benefits from salary-sacrifice pension schemes is forecast to raise ยฃ4.7bn in extra national insurance contributions, the OBR says.
ISA reform
โข From 6 April 2027 the annual ISA cash limit will be set at ยฃ12,000, down from ยฃ20,000. The government will publish a consultation in early 2026 on the implementation of a new, simpler ISA product to support first time buyers to buy a home.
Two-child benefit limit
โข โThe biggest barrier to equal opportunity is child poverty,โ says Reeves, as she abolishes the two-child limit for universal credit and tax credit, costing the Treasury ยฃ3bn by 2029-30.
National minimum wage
โข The minimum wage for 18- to 20-year-olds will go up from ยฃ10 to ยฃ10.85 an hour from April, while the national living wage will go up from ยฃ12.21 to ยฃ12.71 an hour.
Business taxes
โข There will be an expansion of entrepreneurial investment schemes and there will be a three-year stamp duty holiday on the purchase of shares in companies newly listed in the UK.
โข Reeves is also launching a consultation on how to attract more entrepreneurs. โIf you build here, Britain will back you,โ she says.
โข There will be a 40% allowance to allow businesses to write off more of their upfront investment costs.
โข There will be permanently lowered business rates for 750,000 retail, hospitality and leisure businesses, paid for higher rates on properties worth more than ยฃ500,000, used by โwarehouse giantsโ. There will be ยฃ4.3bn of support for properties that receive a large increase in their bill.
โข Customs duty will apply to parcels of any value, to stop online retailers undercutting high street retailers on price.
Full budget with supporting and related documents can be found at https://www.gov.uk/government/collections/budget-2025
