Budget Summary 2025

On 26 November 2025, Chancellor Rachel Reeves presented her second budget to parliament.

We have put together a summary to highlight the key points that may affect you and your business.

Here’s a link to it if you would like to download it for future reference.

After the tax-raising budget of 2024, it had been hoped by the government that widely applicable tax increases would not be required again in 2025.  However, with economic pressures continuing to apply, tax increases have been announced and these will affect the vast majority of households.

Headlines included:

• National Insurance (NI) and income tax thresholds were frozen for an extra three years beyond 2028. This will bring more people into higher rates of tax over time.
• Dividends income will see a 2 percentage point rise to the ordinary and upper tax rates from April 2026.
• Savings and property income tax rates will be increased by 2 percentage points from April 2027.
• From April 2027, the cash Individual Savings Accounts (ISA) savings limit will be capped at £12,000 a year for those aged under 65.
• A council tax surcharge is being introduced for properties worth more than £2 million.
• Any unused portion of the £1 million agricultural property relief and business property relief allowance will be transferable to spouses and civil partners from April 2026.
• A new excise duty will become payable on electric cars at 3p a mile for electric cars and 1.5p a mile for hybrid cars.

Further Budget announcements will be made on 13 January and 20 January 2026 in relation to taxes unique to Scotland and Wales respectively.