Following an unprecedented and 'deeply disappointing' leak at the OBR, Chancellor Rachel Reeves delivered her Autumn Statement on Wednesday 26 November 2025 to a particularly noisy House of Commons.
The chancellor began her speech by defending the 'fair and necessary' choices made so far – saying that the record tax rises announced in the budget are to fill the £22 billion fiscal 'black hole' left by the Conservatives.
SoGlos spoke to Nick Haines, head of tax at leading Gloucestershire accountancy, tax and audit firm, Hazlewoods, to get his key takeaways from this budget – and what they mean for businesses and individuals.
OBR forecasts growth, but downgrades projections from 2026
GDP is forecast to grow by 1.5 per cent by the end of 2025, 0.5 per cent higher than expected, but the outlook has been downgraded for the remainder of the forecast period, down to 1.4 per cent in 2026; and 1.5 per cent in the following three years. Inflation is also due to fall by 0.4 per cent by next year.
Nick said: 'It was inevitable that tax was going to rise – and so it did. The policy decisions indicate the tax increases do not raise enough to plug the gap, unless the economy grows, yet raising taxes tends not to stimulate economic growth.'
Personal tax threshold freeze extended
The freeze on personal tax thresholds is being extended for another three years, from 2028/29 to 2030/31 – a year longer than expected.
Nick said: 'The largest tax raiser came from the freezing of Income Tax and National Insurance thresholds for a further three years to 2030/31, anticipated to raise £13.3 billion per year by that point.'
Increase to National Living Wage
It was announced before the budget that the National Living Wage was being increased to what Nick describes as an 'inflation busting' 4.1 per cent for over 21s, eight per cent for those aged 18 to 20 and six per cent for those aged 16 to 18.
He said: 'With unemployment on an upwards trajectory, this, combined with the previous increase in employer’s National Insurance and the day one rights for employees, makes it look likely that it will keep rising.'
National Insurance on salary sacrifice pension contributions
From April 2029, salary sacrifice pension contributions over £2,000 will no longer be exempt from National Insurance. Any contributions above £2,000 will be liable for National Insurance in line with other employee pension contributions.
Nick described it as 'a, perhaps, odd decision, when it should be promoted to save for your retirement, rather than rely on the government'.
Cash ISA reforms
The annual ISA limit of £20,000 is being retained, but £8,000 of that will be ringfenced for stocks and shares ISAs from April 2027.
However, this only applies to savers aged under 65, with over 65s retaining the full £20,000 cash allowance.
Income tax increases on dividend, property and savings income
The government is increasing Income Tax rates by two percentage points on dividend income from April 2026; and property and savings income from April 2027.
Nick said: 'For property and savings income, the tax rates across all levels will be increased by two per cent, giving rise to 22 per cent, 42 per cent and 47 per cent rates, whilst dividend rates increase by two per cent for only basic and higher rate taxpayers, resulting in rates of 10.75 per cent and 35.75 per cent, maintaining the 39.35 per cent for additional rate taxpayers. Quite why the additional rate taxpayers were excluded from the increase is unclear, particularly given the chancellor’s view that the wealthy should pay more.'
New 'mansion tax' being introduced
From April 2028, the government is introducing a so-called 'mansion tax' for houses worth more than £2 million, to be collected as a high value Council Tax surcharge ranging from a rate of £2,500 for properties worth more than £2 million, up to £7,500 for properties worth more than £5 million.
Nick said: 'Given the vast majority of those houses will be in the south and London specifically, it seems to be a tax on geography, not necessarily wealth. In addition, many will have inherited the properties so may not actually be cash rich, although there will be consultation in the future on whether relief will be available.'
Reduction to Capital Gains Tax relief
Nick said there was 'more bad news' for businesses wanting to sell company shares to an employee ownership trust (EOT).
Capital Gains Tax relief on business disposals to employee ownership trusts are being slashed by 50 per cent, incurring an effective 12 per cent Capital Gains Tax rate with immediate effect.
Concession on Inheritance Tax relief
While the hoped for U-turn on the 'family farm tax' didn't come, the chancellor did provide a concession, in that the inheritance tax individual £1 million 100 per cent relief allowance can be transferred between spouses from April 2026. This effectively doubles the allowance for married couples.
Nick said: 'There was some brief relief in that, having listened to various lobbying, the £1 million business property and agricultural property relief allowance will be transferable between spouses, when the new rules come into force in April 2026, bringing it in line with the nil rate band and residential nil rate band regime.'
New tax on electric vehicles
Electric and plug-in hybrid vehicle owners will be subject to a new tax per mile from April 2028.
Rates are set at 3p per mile for pure electric vehicles and 1.5p per mile for hybrids.
Support for British businesses
The chancellor said 'if you build here, Britain will back you', with the government announcing reliefs on upfront investments for entrepreneurs and businesses. Corporation tax rates remain the same and full expensing for new plant and equipment is staying, too.
Nick said: 'The chancellor was keen to promote the UK as the place to do business, improving the reliefs available under incentive schemes such as the EMI employee share option arrangement, or the Enterprise Investment Scheme and Venture Capital Trust opportunities. However, with so many other taxes seemingly forever on the rise, it is questionable whether that really is the case.'
Highest earners may move abroad
Nick warns that the continued squeeze on the wealthiest and highest earners could result in them leaving the country – especially after the mass exodus after the abolition of the non-domiciled regime.
He said: 'Given the top 10 per cent of earners in the UK contribute 60 per cent of the tax receipts, the government needs to be careful to make the UK a place people do not feel persecuted for being successful.'
For specialist tax advice from Hazlewoods, email nick.haines@hazlewoods.co.uk or call 01242 680000.
