28/11/2025
Here are the key changes you should know about from this weeks budget :-
Higher taxes on dividends, savings and rental/property income
From April 2026, the basic-rate tax on dividends goes up by 2 percentage points to 10.75%, and the higher-rate to 35.75%. From April 2027, the same 2% uplift will apply to savings income and property income.
Frozen income tax thresholds
Income tax personal allowance and tax-band thresholds remain frozen. This stealth measure means many people will creep into higher tax bands over time as wages rise with inflation.
Pension salary-sacrifice tax benefit reduced
From 2029, only the first £2,000 of pension contributions made via salary sacrifice will avoid National Insurance. Above that, NI will apply.
Cash ISA reform from April 2027
Cash ISA limit cut from £20,000 to £12,000 a year for under-65s, but overall ISA limit stays at £20,000 – the extra £8k has to be in investments. Over-65s keep the full £20k cash allowance.
Capital allowances update – WDA main-pool reduced
From April 2026 the annual Writing Down Allowance on main pool plant & machinery will fall from 18% to 14%. The annual investment allowance is still available in full so the effect of this measure should be minimal for most.
The budget also confirmed other measures already announced like the commitment to Making Tax Digital for income tax which will begin in April 2026.
