The Chancellor of the Exchequer presented the UK Budget 2025 on 26 November 2025. The Budget document confirms that headline rates of income tax, National Insurance contributions (NICs) and VAT are not rising, but that revenue will be raised by extending threshold freezes and increasing taxes on income from assets.
Corporate INTL Newsroom · Tax
UK Budget 2025 Extends Threshold Freeze and Raises Taxes on Asset Income
By The Corporate INTL Newsroom · 27 November 2025
Thresholds and reliefs
Income tax thresholds and the equivalent employee and self-employed NICs thresholds will be held at their current levels for a further three years, from April 2028 to April 2031, keeping the Personal Allowance at £12,570 and the higher rate threshold at £50,270. Inheritance tax thresholds are maintained for a further year to April 2031, and the employer NICs secondary threshold is frozen from April 2028 to April 2031.
From 2029 NICs relief on salary sacrifice into pension schemes will be capped at the first £2,000 of contributions per person. Capital gains tax relief on disposals to Employee Ownership Trusts is reduced from 100% to 50%.
Taxes on property, dividends and savings
The ordinary and upper rates of tax on dividend income rise by 2 percentage points from April 2026, with no change to the additional rate. From April 2027 the tax rate on savings income rises by 2 percentage points across all bands, and separate rates apply to property income: 22% basic, 42% higher and 47% additional. The property income rates apply in England, Wales and Northern Ireland, while the dividend and savings changes apply UK-wide.
A High Value Council Tax Surcharge will apply in England from April 2028 to residential properties worth £2 million or more. According to the full Budget text, charges start at £2,500 a year and rise to £7,500 for properties valued above £5 million, will be levied on owners rather than occupiers, and are expected to affect fewer than 1% of properties.
Who is affected
Landlords, owner-managers paid through dividends, savers outside ISAs and owners of high-value homes are most directly affected. A new Electric Vehicle Excise Duty mileage charge for electric and plug-in hybrid cars is also planned from April 2028. Individuals and businesses should review remuneration, pension and property holding structures before the changes take effect.
Sources
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