27 November 2025
After months of speculation, the Chancellor’s Autumn Budget set out a mix of tax freezes, targeted rises and selective reliefs aimed at balancing the public finances while supporting investment and household pressures. With the Office for Budget Responsibility (OBR) reporting improved growth and inflation forecasts, the statement focused on steadying the economic backdrop and signalling where individuals, landlords and businesses may feel the effects in the coming years.
The drama began even before Reeves took to the dispatch box, with the Office for Budget Responsibility (OBR) accidentally releasing an announcement ahead of the speech. The premature reveal confirmed stronger-than-expected growth forecasts and inflation set to fall dramatically to 0.4% next year.
Against this backdrop, the Chancellor stressed that £1 in every £10 of public spending is currently swallowed by debt interest, framing her plans as a call for “everyone to make a contribution”. Frozen allowances, targeted tax rises and fresh investment incentives form the backbone of her script for steadying the nation’s finances.
Personal Tax: More Freezes, Some Offsets
Reeves confirmed that personal tax thresholds will remain frozen for a further three years, extending to 2031. In return, the Government announced freezes on rail fares, prescription charges and fuel duty, along with a promised reduction in household energy bills.
A major revenue-raiser arrives in the form of a 2p tax increase on property, dividend and savings income, areas that fall outside the National Insurance system. The Chancellor said this move helps narrow the “tax gap between landlords and tenants”.
Further up the property ladder, a new High Value Council Tax Surcharge, dubbed a “mansion tax” by commentators, will levy £2,500 per year on homes worth over £2 million, rising to £7,500 for properties exceeding £5 million.
From April 2029, high earners will lose some of the benefits of salary sacrifice for pensions, with contributions above £2,000 a year attracting both employer and employee National Insurance.
Business and Entrepreneurs: Incentives with a Few Stings
Business owners selling to Employee Ownership Trusts will see capital gains tax relief halved from 100% to 50%, reducing one of the more generous succession-planning mechanisms.
There was also disappointment for those expecting major structural reforms. However, firms did benefit from a suite of investment-focused measures, including:
Corporation tax remains at 25%.
More than 750,000 retail, leisure and hospitality properties will benefit from permanently lower business rates from April 2026. A £4.3bn package will cushion sharp increases following the next revaluation, offering support across all sectors.
Meanwhile, film studios retain their 40% business rates relief until 2034, fuel duty remains frozen with the temporary 5p cut extended to August 2026, and loopholes for low-value online duty-free imports will be closed.
For SMEs, training for under-25 apprentices will become completely free, a move likely to be welcomed by employers battling persistent skills shortages.
Families and Workers: A Mixed Bag
Despite persistent rumours, neither triple lock reforms nor changes to pension tax-free drawdown emerged. The Government did, however, abolish the two-child benefit cap from April 2026 and confirmed funding for a library in every school.
Young workers in particular will see a substantial uplift through rises in both the National Living Wage and National Minimum Wage, with 18–20-year-olds gaining around £1,500 a year.
The full speech delivered by the Chancellor is available here. If you would like tailored advice on how these changes may affect you or your business, the team at Aldridge Brownlee Solicitors is available to help with tax planning, commercial strategy and legal compliance.
Contact us today: Call 01202 294411 or send us a message online here.
