After months of anticipation, Rachel Reeves has finally delivered her long-awaited budget. Yesterday, the Chancellor unveiled the November 2025 Budget. While it wasn’t the worst-case scenario many had feared or spent weeks preparing for, one thing is certain: the tax burden is set to increase.
- Income tax rate on dividend income will rise by 2%* from April 2026
- Income Tax on investment income (including property income) will rise by 2% from April 2027
- The personal allowance and rate bands will be frozen until April 2031
Everyone will feel the impact of higher Income Tax, as inflationary increases in earnings and investment income push more people into paying extra.
There were several other notable announcements. The £1m Inheritance Tax Agricultural Relief and Business Relief allowance can now be transferred between spouses or civil partners, offering greater flexibility for estate planning. For savers, the annual Cash ISA limit for those under 65 will be reduced to £12,000. Property owners with homes valued at £2m or more will face a new high-value council tax surcharge of at least £2,500. In addition a £2,000 cap on employee salary sacrifice arrangements is on the horizon although it won’t take effect immediately.
As with any Budget, there are rarely clear winners or losers. For a deeper analysis of what these changes mean, read our expert insights here.
As always, we’re here to help guide you through how the November 2025 budget will affect you, your family and your business. Please do not hesitate to call your usual contact to find out how the announcements will impact you.
* Applies to basic and higher-rate taxpayers only
