What the Autumn Budget means for you and your business

The Autumn Budget brought a long list of changes for individuals, landlords, sole traders, and small business owners. Some changes start soon, and others run right through to 2031. If you run a small business, rent out property, or take a director salary and dividends from your company, this Budget will affect you.

Below is a simple guide to what is changing, when it is happening, and what it means for your day to day finances.

Personal tax thresholds staying frozen until 2031

The personal allowance and the thresholds for higher and additional rate tax will stay frozen until April 2031. When tax bands do not move but wages do, more of your income is pushed into higher rates.

As well as anyone in a PAYE role, this will affect:

– Sole traders
– Employees with extra income
– Landlords
– Directors who take salary and dividends

It is one of the biggest long term changes in the Budget.

Higher tax on dividends, savings and rental profits

Dividend tax rising in April 2026

From April 2026, tax on dividends increases by 2%.

The basic rate becomes 10.75%, and the higher rate becomes 35.75%.

Make the most of the lower dividend tax rate while you can.

Savings income tax rising in April 2027

From April 2027, tax on savings interest increases. The basic, higher, and additional rates will rise by 2% each.

Landlord tax rising in April 2027

Landlords will pay more tax on rental profits from April 2027, as the same 2% point rise is applied to property income.

The new rates will be:

– Basic rate tax on rental income: 22%
– Higher rate tax: 42%
– Additional rate tax: 47%

If you rely on dividends or rental income, it is worth reviewing your tax position well in advance.

National Insurance and minimum wage changes

National Insurance thresholds remain frozen until April 2031.

Changes to pension salary sacrifice from April 2029

From April 2029, only the first £2,000 of pension contributions made through salary sacrifice will be free from National Insurance. Contributions above that amount will be charged National Insurance.  This applies to those who pay into a pension as part of their PAYE income and payments.

This will reduce the tax advantage for employees and directors who use salary sacrifice for pensions.  However, remember that a Director can pay into a pension as an employer contribution.

Potential reductions from late 2025

The Budget forecasts suggest that National Insurance may start to fall slowly from late 2025, although any reductions will be gradual.

Minimum wage and youth wage rises from April 2026

The government has confirmed new rates for 1 April 2026. These will affect staff costs for employers and take home pay for employees:

– Ages 21 and over: £12.71 per hour
– Ages 18 to 20: £10.85 per hour
– Ages 16 to 17: £8.00 per hour
– Apprentices under 19 or in their first year: £8.00 per hour

If you employ staff, this is a good time to review your payroll budget for next year.

Student loan changes from April 2027

For graduates with a Plan 2 student loan, the repayment threshold will be frozen at 29,385 pounds from April 2027 for three years.

Once income rises above this level, 9 per cent of everything earned above the threshold is repaid towards the loan.

Because the threshold stays fixed, more people will begin repayment as wages rise.

Changes for limited companies

Corporation tax penalties increasing

From April 2026, the penalty for filing a late corporation tax return will double.

Capital allowances changing

Some investment reliefs are being reduced.

– The full first year allowance for zero emission cars is available until March and April 2027 depending on your business structure.
– From April 2026, the writing down allowance for many business assets will fall from 18% to 14%.

If you are planning major equipment or vehicle purchases, timing will matter more than usual.

Electric vehicle road charge from April 2028

A new mileage based road charge for electric and plug in hybrid vehicles begins in April 2028. It is expected to be set at around half the current level of fuel duty. Businesses using electric vehicles should factor this into future running costs.

The wider economic picture

– Inflation is expected to return to 2% in 2027, meaning higher prices will continue for some time.
– Interest rates are expected to fall slowly from late 2025, offering gradual relief on borrowing costs.

What should you do now?

Each business and individual is affected differently. For most people, the main impacts will come from the ongoing freeze of tax thresholds, higher tax on dividends and rental profits, and rising wage costs from April 2026.

If you would like help working out what this means for you, we can prepare a personalised review based on your income, business structure, and plans for the year ahead.

We are always here to help.