After weeks of leaks, speculation, and theories, the Chancellor’s Budget is finally here – and our focus is firmly on tax. Wondering what was announced? Here’s your quick guide.
Frozen Tax Thresholds
Income tax and National Insurance thresholds will stay frozen until 2031. As wages rise, more people will drift into higher tax bands – a stealth tax that boosts government revenue without changing headline rates.
Mansion Tax Arrives
From April 2028, if you own property worth over £2 million, you’ll face a new annual charge starting at £2,500, rising to £7,500 for homes above £5 million. This will be collected alongside your council tax.
Savings and Investment Taxes Going Up
From April 2026, taxes on dividends in the basic and higher rates will increase by 2% (there is no change to the additional rate).
The tax rate on savings income and property income will increase by 2% across all bands from April 2027.
Salary Sacrifice Changes
Salary sacrificed pension contributions above an annual £2,000 threshold will no longer be exempt from National Insurance from April 2029.
Capital Allowance Changes
The writing-down allowance (WDA) on the main pool of plant and machinery drops from 18% to 14% per year. However, the 100% Annual Investment Allowance remains meaning the true impact on smaller businesses will likely be negligible.
APR/BPR 100% lifetime allowance
The £1m lifetime allowance for 100% APR/BPR, which will come into effect from April 2026, will now be transferable between spouses and civil partners.
Other Notables
- Electric vehicle mileage charge coming in 2028 (3p per mile or 1.5p per mile for plug in hybrids).
- From April 2027, the £20,000 ISA annual limit is kept, but £8,000 must be in investment (but over 65s are not affected)
These are just the headline changes from today’s Budget. We’ll be back soon with a deeper dive into the wider implications once we’ve had time to work through the detail…