The Autumn Budget 2025 delivers one of the biggest sets of tax changes in recent years, affecting savers, landlords, company directors, business owners and electric vehicle drivers. Below is a clear breakdown of the confirmed changes and when they take effect.

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Savings Income Tax Rises from April 2027

From April 2027, the basic, higher and additional rates on savings income tax will all increase by 2 percentage points.
The new rates will be:

• 22% (basic rate)
• 42% (higher rate)
• 47% (additional rate)

Anyone earning interest from savings accounts, bonds or other taxable savings will see higher tax bills from 2027 onwards.

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Property Income Tax Increasing from April 2027

Landlords will also see a 2-point rise in property income tax from April 2027.
This aligns with the new savings tax rates:

• 22%
• 42%
• 47%

This affects rental profits from residential and commercial properties and will increase the effective tax burden for many property investors.

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Dividend Tax Increase from April 2026

Company directors, shareholders and investors face higher dividend taxes.
From April 2026, dividend tax increases by 2 percentage points to:

• 10.75% (basic rate)
• 35.75% (higher rate)

This widens the gap between taking salary versus dividends and will reduce post-tax income for many small business owners.

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Capital Allowances: WDA Cut from 18% to 14%

From April 2026, the Writing Down Allowance (WDA) main rate will fall from 18% to 14%. This slows down the tax relief available on capital assets such as machinery, equipment and vehicles.

Businesses will claim relief over a longer period, potentially increasing taxable profits in the short term.

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New 40% First-Year Allowance from January 2026

To offset the slower WDA, the government is introducing a new 40% First-Year Allowance (FYA) from January 2026.

This allows businesses to claim 40% upfront relief on qualifying capital expenditure, encouraging investment while maintaining long-term revenue for the Treasury.

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New Mileage Charge for Electric Vehicles from April 2028

A major change for motorists: from April 2028, electric and plug-in hybrid cars will face a mileage-based road charge, ending the historic “zero road tax” advantage.

The rates will be:

• £0.03 per mile for battery electric vehicles
• £0.015 per mile for plug-in hybrids

This marks the transition towards a new taxation model as the government prepares for declining fuel duty revenue.

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Salary Sacrifice Pension NIC Changes: What You Need to Know from April 2029

The Government has confirmed a major change to the way salary-sacrificed pension contributions will be treated for National Insurance purposes. From April 2029, any amount sacrificed above £2,000 per year will no longer be exempt from NICs.

This means that contributions over the £2,000 threshold will be treated as ordinary employee pension contributions, and both employer and employee National Insurance will apply to the excess. Only the first £2,000 of sacrificed pension contributions will benefit from the NIC saving going forward.

Importantly, this change does not affect ordinary employer pension contributions, which will remain fully NIC-exempt.

This shift is expected to have a significant impact on higher earners and anyone using salary sacrifice as part of their pension strategy. Employers and employees should start reviewing their arrangements well ahead of the 2029 implementation date to understand the financial impact.

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Personal Tax Thresholds Frozen Until 2030–31

The Government has confirmed that all main personal tax thresholds will remain frozen for an extra three years, taking the freeze through to 2030–31. This means millions of people will pay more tax over time as wages rise but thresholds stay the same.

What’s Staying Frozen?

• Personal Allowance: £12,570
• Higher-Rate Threshold: £50,270
• Additional-Rate Threshold: £125,140

These figures will now stay fixed until April 2031.

NICs Secondary Threshold Frozen Too

The employer National Insurance secondary threshold will also remain frozen until 2030–31.
This threshold was already reduced from £9,100 to £5,000 in the Autumn Budget 2024, increasing the NIC cost for employers. The freeze means this lower level now stays in place for longer.

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What These Changes Mean for You

These measures collectively increase the tax burden on savings, rental income, dividends and business investment. EV owners will also start contributing through mileage-based charging.

If you receive savings interest, let property, run a business or take dividends, planning ahead will help reduce future liabilities.