Autumn Budget 2025: What It Really Means for You & Your Business
- Abbie Browne
- 8 hours ago
- 4 min read
For sole traders, limited company owners, landlords & employers
The Autumn Budget has now been fully released, and we know many business owners are understandably asking:
“Will this affect my tax bill?”
“Do I need to make any changes?”
This guide explains the key points that matter to you — clearly and based on confirmed information published by HM Treasury, HMRC and the Low Pay Commission.
If you’d like advice tailored to your situation, we’re always happy to help.
1. Key Personal Tax Changes That Affect Most Business Owners
Income tax thresholds remain frozen
The levels at which you start paying 20%, 40% and 45% tax will not increase for several years.As incomes rise, more earnings may fall into higher tax bands — a gradual effect known as fiscal drag.
Dividend tax is rising (from April 2026)
Confirmed by HM Treasury:
Basic rate: 10.75%
Higher rate: 35.75%
Additional rate: 39.35%
Dividend allowance: remains at £500
This mainly affects limited company directors and those receiving dividend income from investments.
Savings & property income – major changes from April 2027
The government is introducing new, separate tax rates.
Property income rates:
22% (basic)
42% (higher)
47% (additional)
Savings income rates
All rise by 2 percentage points to:
22% / 42% / 47%
Finance cost relief for unincorporated landlords will be given at the new 22% basic property rate.
Capital Gains Tax
No new CGT changes in this Budget — existing rates and allowances continue for now.
2. How This Affects Sole Traders
✔ No new taxes on trading income
HM Treasury confirmed there were no changes to how employment or self-employment income is taxed in this Budget.
✔ Your tax bill may rise gradually over time
This will be due to the ongoing freeze in tax thresholds rather than changes to tax rates themselves.
✔ National Insurance
No changes were announced for Class 2 or Class 4 National Insurance.
✔ Your business structure
For profits up to between £40–£50k, remaining self-employed is still a perfectly sensible and often the simplest option.
3. How This Affects Limited Company Directors
✔ Dividend tax rises from April 2026
This is the main change affecting how directors take income.A review of the salary/dividend/pension mix may be sensible going into the next tax year.
✔ No changes to corporation tax
Main rate remains 25%
Small profits rate remains 19%
✔ Threshold freezes affect directors too
Salary, dividends, rental income and investment income may push individuals into higher bands more quickly.
✔ We will review extraction strategies
Over the next few months, we will be reviewing our general profit-extraction strategy for directors for the next tax year.If any adjustments are advisable, we will communicate this to clients.If you have questions in the meantime, please feel free to contact us.
4. How This Affects Landlords
✔ Rental profits will be taxed at new higher rates (from April 2027)
Property income will be taxed at 22% / 42% / 47%, which may increase tax bills for many landlords.
✔ Mortgage interest relief
Finance cost relief will be given at the new 22% property basic rate.
✔ No new CGT changes this year
But frozen thresholds still make timing of property sales more important.
If you would like us to review your rental position and forecast future tax, we’re happy to help.
5. How This Affects Employers
National Minimum Wage is increasing (from 1 April 2026)
These rates were confirmed by the Low Pay Commission and accepted by the Government:
📌 Statutory minimum wage rates from April 2026:
21 and over (NLW): £12.71 per hour
18–20: £10.85 per hour
16–17: £8.00 per hour
Apprentice rate: £8.00 per hour
These increases will affect payroll budgets for many businesses.
Employer National Insurance
There were no changes to employer NI rates or thresholds in this Budget.Employer contributions continue in the same way as before.
Employers should now:
Review staffing costs for April 2026 onwards
Update payroll forecasting
Adjust pricing or budgeting if needed
Consider the impact on rotas, overtime or staffing levels
We can help model these changes if you need support.
6. Should You Be Worried?
No — nothing in this Budget requires sudden action or drastic changes.
Most measures come into effect in 2026 or 2027, allowing plenty of time to prepare.The biggest increases apply to dividends, property income and savings income — not trading income.
7. What We Will Be Doing Over the Next Few Weeks
To keep things straightforward, we will:
Review our general strategy for company director profit extraction
Keep an eye on post-Budget Finance Bill updates
Update clients where helpful
Be available to answer questions
You do not need to make any immediate changes at this stage.
A Final Word from Us
This Budget increases tax mainly on dividends, rental income and savings, while keeping trading income and employer NI largely unchanged.For most small businesses, this means manageable adjustments rather than major disruption.
Do You Need Support?
If you are an existing client, or if you’d like to work with us, we would love to support you.
Please book an appointment using our online calendar
Or, give us a call today and we’ll be happy to help. 0117 321 0360