As the Chancellor gears up for the 2025 Autumn Budget announcements tomorrow, a question I have been getting from every client and professional contact is “what do you think”? ‘Mixed’ is my normal response, with some hidden tax increases.
Businesses are anxious about costs increasing, but at the same time, fingers are crossed that there is some encouragement for investment and growth.
Following my client meetings, I have put a summary of my expectations below. I will find out if I’m correct shortly.
- Wages: Companies are already feeling the pressure of NIC and minimum wage increases. Expecting no increases to the Employment Allowance, secondary thresholds to be reduced. Income tax bands no change.
- Business Tax: Corporation Tax to remain at 25% for large companies, no changes to capital allowances.
- Tax planning, Capital Gains: Business owners planning exit will be hit, CGT Annual exemption to be cut or removed completely, BADR lifetime limit to be lowered.
- Indirect taxes could be creeping up: Fuel and energy costs are slowing on the rise again, especially difficult for freight businesses, expecting the cut in fuel duty to be removed, an increase in alcohol duty (as always), VAT registration threshold to be lowered.
I asked Sarah Hamilton from our tax team for her pre-budget considerations, who provided much more detail than myself:
- Freezing the income tax thresholds until 5 April 2030.
- CGT rules for the sale of private residences to be reviewed.
- Creating a new tax on the sale of high-value homes in excess of £500k. A specific ‘mansion tax’.
- May bring in rental income from private landlords and partnerships within the scope of NIC. Rent a room exemption would also apply for NIC purposes.
- The annual cash ISA limit may be reduced from its current £20,000 limit.
- May remove the 0.5% stamp Duty charge on buying shares but would apply to ISA investors only.
- The current £500 tax-free allowance for dividends is unlikely to be removed.
- NIC on partnerships – Possibility of making partners’ earnings liable to employer’s NIC.
- BADR – Will be in line with the lower main rate of CGT from 6 April 2026. The reduced rate may be removed or the lifetime limit of £1,000,000 of gains that qualify for BADR may be reduced.
- Reducing or removing the CGT annual exemption.
Let’s see what happens at approximately 12.30 on 26 November 2025..
Disclaimer
The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.