Well, the anticipation had been building for some time and whilst the OBR let the cat out of the bag in an astonishing error, the Chancellor’s speech did not disappoint. Many of the changes are not immediate, but the impact will be felt by all taxpayers’ one way or another. There is much to ponder and review, but our initial highlights are as follows:

FOR INDIVIDUALS

• A continued freeze on allowances and thresholds for individuals until 2031 and (whilst not mentioned in the speech), a continued freeze to the IHT nil rate band until the same time. Fiscal drag in full effect.
• Taxes on dividend income will increase by 2% from 6 April 2026 for basic and higher rate taxpayers. Interestingly, there is no increase for those paying tax at the additional rate, which does seem at odds with government policy.
• Tax on interest and property income will increase by 2% from 6 April 2027 for basic, higher, and additional rate taxpayers. In addition, the relief for mortgage interest will increase from 20% to 22%. As with dividend income, property and interest income will not be permitted to use personal allowances in priority to employment, trading, or pension income.
• The annual cash ISA limit for under 65s will reduce to £12,000 from 6 April 2027.
• The National Insurance saving for employees (and employers) on salary sacrifice arrangements above £2,000 per year will be scrapped from 6 April 2029. Income tax reliefs remain.
• The main CGT change is the reduction in relief where business owners sell their businesses to Employee Ownership Trusts. The rate, which was a complete exemption previously, will be a 50% exemption for sales from today.
• Many people have moved to electric or hybrid cars, and the Treasury is noticing a reduction in the amount it collects in fuel duty. Therefore, to balance the books (albeit maintaining an incentive to switch), a mileage-based system will come in from 6 April 2028, which will result in a charge of 3 pence per mile for electric car users and 1.5 pence per mile for hybrid car users, payable yearly with Car Tax.
• The much-mooted “mansion tax” has been announced, subject to consultation. Effective from 6 April 2028, this will take the form of a council tax surcharge and will be a sliding scale for properties valued over £2m, where the charge starts at £2,500 per annum and rises to £7,500 per annum for properties worth over £5m. The consultation will focus on operation and options where payment would cause financial hardship (such as a deduction from sale proceeds following an owner’s death).

FOR BUSINESSES

• The main Corporation Tax rate remains at 25%, but the writing down allowance for capital allowances reduces to 14% per year from 6 April 2026. A new 40% first-year allowance comes in from 1 January 2026.
• Perhaps to lessen the minimum wage increases and hikes to National Insurance previously, there does seem some potential relief to business rates for those in the retail, leisure, and hospitality industries, from April 2026.
• Online retailers will need to be aware that customs duty will apply to items of any value entering the UK for UK customers from March 2029 (at the latest).
• The limits related to EIS and VCT will double from 6 April 2026 and there will be a significant expansion of the eligibility requirements for access to EMI schemes to incentivise employees, including increasing the maximum holding period to 15 years.

We will publish more in-depth analysis of the Chancellor’s Autumn Budget announcements tomorrow.