On Wednesday, the Chancellor unveiled the latest Autumn Budget, marking a pivotal moment in the government’s economic strategy. After an opening that felt more like a manifesto pitch than a fiscal statement, the Chancellor eventually turned to the substance of her plan to “build a secure future from strong foundations.”
This budget introduces adjustments across multiple areas of tax and spending, with implications for small businesses, contractors, and the self-employed. To help you navigate the changes, we’ve broken down the key measures tax by tax, focusing on what matters most for independent professionals and limited company owners.
For those who want the full picture, every detail announced by the Chancellor is available in the official documentation on the government website: Big Red Book – November 2025.
Income Tax
Income tax rates have indeed remained steady, allowing the chancellor to repeat her claim of keeping to Labour’s manifesto commitment, however many employees and business owners will feel the ripple effect of this budget.
The main points for income tax coming out of the budget are as follows:
- Personal Allowances: Existing personal tax thresholds will remain frozen for a further three years, until 2031.
- Dividend Tax: Starting April 2026, the basic and higher rates of dividend tax will rise by two percentage points, moving to 10.75% and 35.75% respectively; the additional rate will remain unchanged at 39.35%
- Savings Income Tax: From April 2027, the basic, higher, and additional rates on savings income will each increase by two percentage points, becoming 22%, 42%, and 47%.
- Property Income Tax: Also from April 2027, the same two-point increase applies to property income tax, with rates rising to 22%, 42%, and 47%.
- National Insurance on Pensions: From April 2029, both employees and employers will pay National Insurance on pension contributions made through salary sacrifice that exceed £2,000 per year.
Corporation Tax
The main change to Corporation Tax is not to the headline rates. Instead, the Government will reduce the writing down allowance main rate from 18% to 14% from April 2026, alongside introducing a new 40% first-year allowance from January 2026.
- Writing Down Allowance (WDA): The main rate for plant and machinery will drop from 18% to 14% from April 2026.
- New First-Year Allowance (FYA): A 40% upfront deduction for qualifying main-rate expenditure will apply from January 2026.
Who Will Be Affected?
- Companies and unincorporated businesses (including sole traders and partnerships) that invest in plant and machinery.
- Businesses with large existing main pool balances: They’ll see slower tax relief because the WDA rate is lower.
- Leasing and hire businesses: These benefit most from the new 40% FYA because full expensing and AIA often exclude leased assets.
- Unincorporated businesses: Previously excluded from full expensing, they now gain access to accelerated relief via the new FYA.
- Businesses buying second-hand assets or cars: These are excluded from the new FYA, so they’ll rely on the reduced WDA rate.
Excise Duties
From 2028, the government will introduce a mileage-based charge for battery electric and plug-in hybrid vehicles. This new levy will be set at roughly half the current fuel duty rate paid by petrol car drivers.
Who Will Be Affected?
- Owners of electric and plug-in hybrid cars: They will face a new cost for road use, reducing the current tax advantage over petrol vehicles.
- Fleet operators and businesses with EVs: Companies running electric fleets will need to factor in additional operating costs.
- Private motorists considering EVs: The long-term savings from switching to electric may be less pronounced once this charge is in place.
The government will extend the current freeze on fuel duty for an additional five months, lasting until September 2026. At that point, the 5p per litre cut introduced in 2022 will be gradually phased out through a staggered approach. The planned inflation-linked increase for 2026–27 has been cancelled. From April 2027, fuel duty rates will rise annually in line with the Retail Price Index (RPI).
Who Will Be Affected?
- Motorists: Drivers will benefit from the extended freeze until September 2026 but face higher costs once the 5p cut is phased out and annual RPI increases begin.
- Businesses reliant on transport: Logistics, delivery services, and trades that depend on fuel will see operating costs rise after the freeze ends.
- Consumers: Increased transport costs may lead to higher prices for goods and services.
- Fleet operators: Companies managing large vehicle fleets will need to budget for the gradual reversal of the fuel duty cut and future inflation-linked increases.
The team at Integro Accounting are here to help navigate any concerns you have regarding the latest budget changes. As a client you have complete flexibility to reach out to your dedicated accountant at any time. If you are in need of better support with you and your business, why not book a free, no obligation, discovery call to discuss your tax needs.
