The proposed council tax surcharge on high value homes, due from April 2028, has triggered a lively and sometimes sharp response across the press. While the headlines have focused on the “mansion tax” label, the underlying commentary has been more nuanced, splitting broadly into three camps: those who see it as a modest step towards taxing wealth more fairly, those worried about complexity and unintended consequences, and those in the property world who fear it sends the wrong signal to investors and high earners.

What has actually been proposed

The Autumn Budget confirmed a High Value Council Tax Surcharge for residential properties in England valued at £2 million or more, with effect from April 2028. The charge will sit on top of existing council tax and will be levied on owners rather than occupiers. Current guidance suggests four bands, starting at £2,500 a year for homes between £2 million and £2.5 million, rising to £7,500 a year for properties valued above £5 million. The government expects fewer than 1% of homes to be affected, concentrated in London and parts of the South East.

Supportive commentary: a small but symbolic shift

On the centre left, commentators have largely welcomed the surcharge as a cautious move in the direction of wealth taxation. One prominent Guardian piece described the measure as a “small but brave step”, arguing that raising around £400 million a year is less important than establishing the principle that expensive property should contribute more to local finances and public services.

Supportive articles tend to present the surcharge as a way to rebalance a system that has left long term property wealth relatively lightly taxed compared with earnings. They also note that the charge arrives at a time when broader Budget measures, including other tax rises, have drawn criticism for hitting working households. In that context, asking owners of £2 million plus homes to pay a few thousand pounds more each year is framed as politically and socially defensible.

Critical voices: valuation headaches and fairness concerns

By contrast, the Financial Times and other business focused outlets have highlighted practical and administrative risks. The Valuation Office Agency is already under pressure dealing with council tax and business rates disputes. Experts quoted in the financial press warn that identifying which properties fall above the £2 million threshold, particularly in areas where comparable sales are rare, could trigger a wave of appeals and strain an already stretched system.

There are also questions of fairness and regional impact. Some commentators point out that a fairly ordinary family house in parts of London may now trip the £2 million line, while far grander properties elsewhere in the country remain outside scope. This has prompted familiar worries that the policy could deepen a perceived London focus on tax design, even if only a small proportion of households are affected.

More broadly, several economic commentators have grouped the surcharge with a wider set of tax rises and freezes, warning that the overall package may act as a drag on growth and household living standards through to the end of the decade.

Property industry reaction: wary rather than panicked

Within the property industry, reaction has been wary but not apocalyptic. Trade press coverage talked of an “apprehensive” sector that had long expected some form of mansion tax, and which now regards the final design as less aggressive than feared.

At the same time, agents and landlords have warned that the measure could undermine sentiment at the top end of the market, especially when taken alongside other changes affecting landlords and higher rate taxpayers. Industry bodies note that the surcharge lands in 2028, by which time interest rates and house prices may have moved again, and suggest that the reputational signal, that the UK is becoming a higher tax environment for wealth holders, may matter as much as the direct cash cost.

Interestingly, early market data suggests that the announcement has not derailed the wider housing market. Nationwide, for example, has reported modest house price growth and emphasised that fewer than 1% of homes are in scope, meaning the broader market is unlikely to be affected in any material way.

Where does this leave homeowners and advisers

Taken together, the press reception paints the surcharge as a politically significant but fiscally modest measure. Supportive commentators see it as the thin end of a wedge that could, in time, lead to more comprehensive taxation of property wealth. Critics fear it adds yet another layer of complexity to a tax system already full of thresholds, bands and cliff edges, and may unsettle a small but economically influential segment of homeowners and investors.

For advisers and their clients, the message from the press is clear enough. This is not a mass market tax. However, for those with property interests at or above the £2 million threshold, it is another reason to review longer term plans, consider how assets are held, and keep a close eye on valuations as the Valuation Office Agency begins its work.

From 1 December 2025 the UK deposit protection rules will shift in a way that will matter for many savers, especially those holding larger balances or receiving significant one-off payments. The Financial Services Compensation Scheme is increasing the maximum protection for eligible deposits held with UK banks, building societies and credit unions. The long-standing limit of £85,000 per person per authorised firm will rise to £120,000. The protection for temporary high balances will also increase, moving from £1 million to £1.4 million, with cover lasting for up to six months.

These changes follow a review of the scheme that considered the erosion of real value caused by nearly a decade of inflation. The previous limit had not changed since 2017. As prices, house values and average cash holdings increased, the £85,000 cap covered a smaller and smaller proportion of typical savings. The new figures are intended to restore the original level of protection and maintain confidence in the financial system.

Why the changes matter for savers

For everyday savers, the increased limit means a larger share of their money is fully protected if their bank were to fail. While bank collapses remain rare, the reassurance of compensation has always been a central part of financial stability. Raising the limit helps ensure that savers do not have to worry unnecessarily about the safety of ordinary cash deposits.

The updated rules on temporary high balances are important as well. Life events often lead to large short-term cash holdings. A house sale, a divorce settlement, an inheritance or an insurance payout can all result in six figure sums sitting temporarily in a bank account while the individual decides what to do next. Under the previous rules the protection for these situations was capped at £1 million. The move to £1.4 million brings that figure closer to the current value of many property transactions and gives people more time and confidence to organise their finances.

How the protection works in practice

The £120,000 limit applies per person per authorised institution. If you have several accounts with the same bank, and that bank operates under a single licence, all balances are grouped together for the purpose of the protection calculation. Joint accounts are covered per individual, so a joint account held by two people could receive protection up to £240,000 in total.

The temporary high balance protection operates slightly differently. It applies only to specific types of transactions such as proceeds from property sales, inheritances and insurance claims. The money must have been received within the past six months, and the individual must be able to show the source of funds. The protection is automatic, but it is time limited. After six months the standard £120,000 limit applies.

For most people, the process in the event of a bank failure is straightforward. The Financial Services Compensation Scheme normally refunds protected deposits within seven days. You do not need to make a claim or fill in forms. The system is designed to be fast and automatic.

Practical things to consider

One point that often surprises savers is that well known banking brands can share the same banking licence. This means the £120,000 limit applies to the group as a whole rather than to each brand. It is worth checking which brands belong to which authorised firm if you hold more than £120,000 across several accounts. Splitting money between institutions with separate licences can provide greater protection.

The increase in the limit will mean that many savers who currently split modest sums between two or three banks may find they no longer need to do so purely for safety reasons. Even so, some individuals prefer to spread funds for convenience or organisational reasons, for example separating savings for different goals across different accounts. The higher limit does not remove these preferences; it simply reduces the pressure to do so for safety alone.

For people expecting a large one-off payment, the new temporary high balance protection provides breathing space. Rather than rushing to move or invest the money within a few days, individuals have up to six months to decide how best to use the funds while still enjoying a significant level of protection.

Conclusion

The increase in the UK deposit protection limits is a welcome modernisation of a long-standing safeguard. It restores the real value of protection that had been steadily eroded and gives savers greater confidence that their money is safe. The change is sensible, proportionate and aligned with current financial realities. For individuals and small businesses alike, it reduces anxiety and provides more flexibility, especially around major financial events that temporarily increase cash balances.

Artificial intelligence (AI) writing tools, such as ChatGPT, Gemini, and Claude, have become extremely popular. They can create emails, write marketing content, and debug code quickly. Many people think these tools could replace traditional editing tools. A spell checker, once a key part of word processors, might seem unnecessary now that AI can rewrite a paragraph with correct grammar and style.

It would be a mistake to get rid of human-verified editing tools. Current AI services are strong suggestion engines, but they are not always correct or truthful. If you rely only on AI for accuracy, you could make significant errors that a basic spell checker would easily catch.

The Problem with “Hallucinations”

A main issue with current AI models is “hallucination.” AI predicts the most likely next word in a sequence. This usually results in fluent, relevant text. However, when the model lacks information or the prompt is unclear, it creates believable-sounding falsehoods.

A standard spell checker checks if a word is in the dictionary and used correctly. An AI might “correct” a technical term to a common synonym, which changes the meaning of a sentence. It might make up statistics, quote sources that do not exist, or include names of people who were not involved in an event. These errors often sound correct but are factually wrong.

Context is Key (and AI Can Miss It)

Consider a business communication where a specific internal acronym is vital. A traditional spell checker might flag the acronym but offers the simple option to “Add to Dictionary.” An AI, trained on large public datasets, might try to “fix” that unique term with a generic, incorrect replacement because it’s unfamiliar with a specific context.

AI also struggles with nuance, tone, and the legal or compliance requirements of specific industries. A human editor or a dedicated, rule-based editing suite understands the fixed rules of internal policy or legal jargon.

A Powerful Partnership, Not a Replacement

AI is a strong first-draft generator and brainstorming partner. It speeds up the creative process and helps with writer’s block. However, it does not replace the crucial final step of human review and verification.

Use AI as a smart assistant, not the editor-in-chief. Keep traditional spell checkers, grammar tools, and critical thinking skills sharp. The best method in 2025 is not AI instead of spell check; it’s AI plus careful human oversight. Do not get rid of a spell checker; it’s the last defence against convincing, and incorrect AI output.

1 December 2025 – Due date for Corporation Tax payable for the year ended 28 February 2025.

19 December 2025 – PAYE and NIC deductions due for month ended 5 December 2025. (If you pay your tax electronically the due date is 22 December 2025).

19 December 2025 – Filing deadline for the CIS300 monthly return for the month ended 5 December 2025. 

19 December 2025 – CIS tax deducted for the month ended 5 December 2025 is payable by today.

30 December 2025 – Deadline for filing 2024-25 self-assessment tax returns online to include a claim for under payments to be collected via tax code in 2026-27.

1 January 2026 – Due date for Corporation Tax due for the year ended 31 March 2025.

19 January 2026 – PAYE and NIC deductions due for month ended 5 January 2026. (If you pay your tax electronically the due date is 22 January 2026).

19 January 2026 – Filing deadline for the CIS300 monthly return for the month ended 5 January 2026. 

19 January 2026 – CIS tax deducted for the month ended 5 January 2026 is payable by today.

31 January 2026 – Last day to file 2023-24 self-assessment tax returns online.

31 January 2026 – Balance of self-assessment tax owing for 2024-25 due to be settled on or before today unless you have elected to extend this deadline by formal agreement with HMRC. Also due is any first payment on account for 2025-26.

A demerger involves splitting the trading activities of a single company or group into two or more independent entities. This can be facilitated by distributing the assets of a holding company to its shareholders.

There are special statutory demerger provisions that are designed to make it easier to divide and put into separate corporate ownership the trading activities of a company or group of companies. An exempt demerger will be deemed to occur under these provisions. As a result, the distribution is typically exempt from Income Tax and usually does not trigger any Capital Gains Tax, as the gains are effectively rolled over.

The provisions do not apply where a trading activity is to be sold or becomes owned by a person other than the existing member of the original company.

The provisions allow for the removal of the distribution charge in appropriate circumstances, making the distribution an ‘exempt distribution’. This applies to trading activities only. Companies that utilise the demerger provisions range from small private businesses to some of the largest public companies in the UK.

The legislation also provides for a clearance procedure. Under this a company that wants to demerge trading activities can obtain advance confirmation from HMRC that the distribution that will arise will be an exempt distribution.

The Chancellor has kept the main pension allowances unchanged but has confirmed a new cap on salary sacrifice arrangements that will apply from April 2029.

There had been heated speculation that the Chancellor would change the pension rules to help the government raise taxes, but no changes were announced to the annual allowance (which remains at £60,000) or to the carry-forward rules which can use up previous year’s annual allowances. The lump sum allowance has also remained unchanged at £268,275.

However, the Chancellor announced changes to the salary sacrifice arrangements for pension contributions. Salary sacrifice allows employees to reduce part of their salary or bonus in exchange for pension contributions, which is tax-efficient and helps save for retirement. However, this arrangement has disproportionately benefited higher earners with salary sacrifice costs expected to rise from £2.8 billion in 2016-17 to £8 billion by 2030-31.

From April 2029, the government plans to introduce a cap on salary sacrifice contributions which will limit the amount that can be sacrificed without incurring National Insurance Contributions (NICs) to £2,000 per employee. Salary sacrifice contributions above this amount will be subject to employer and employee NICs. Pension contributions that are not part of a salary sacrifice will remain unchanged.

The Chancellor reaffirmed the government’s commitment to maintaining the Triple Lock on the State Pension throughout this parliament. This means that in April 2026, the State Pension will increase by 4.8%. The Triple Lock ensures that the State Pension rises by the highest of three measures: inflation, wage growth, or 2.5%, helping to protect pensioners’ income against rising costs of living.

Also, starting from 6 April 2027, the government will close a loophole that allows individuals to use pensions for inheritance tax (IHT) planning. Under the new rules, any unspent pension pots will be brought within the scope of IHT.

The Chancellor of the Exchequer, Rachel Reeves announced increases to the Minimum Wage rates on the eve of the Budget. The Chancellor confirmed that the government has accepted in full the proposals of the Low Pay Commission (LPC) for increasing minimum wage rates from 1 April 2026.

The National Living Wage (NLW) rate will increase from £12.21 to £12.71 on 1 April 2026 and represents an increase of 50p or 4.1%. The NLW is the minimum hourly rate that must be paid to those aged 21 or over. The increase represents a pay rise of £900 a year for someone working full-time and earning the NLW.

It was also announced that the National Minimum Wage (NMW) – for 18-20 year olds – will increase from £10.00 to £10.85 an hour. This is an 8.5% increase and will see younger workers having their pay boosted by up to £1,500 next year. This increase is part of moves to narrow the gap in wage rates for 18-20 years olds and the NLW and ultimately create a single adult wage rate for all those aged 18 and up.

The NMW rates for 16 to 17 years old will increase from £7.55 to £8.00 – an increase of 45p or 6% per hour – from next April. The Apprentice Rate will mirror this increase in line with earlier recommendations by the LPC.

At the Budget, the government also announced two new measures aimed at supporting young people’s employment and skills development.

1. The Youth Guarantee: Jobs Guarantee Scheme will provide a six-month paid work placement for eligible 18-21 year group, who have been on Universal Credit and searching for work for at least 18 months. This scheme will cover 100% of employment costs for 25 hours a week at the minimum wage, alongside other support measures.
2. The Youth Guarantee and Growth and Skills Levy will allocate more than £1.5 billion over the spending review period to improve employment and skills support. This funding will help ensure that young people have access to high-quality training opportunities and streamline the apprenticeship system to make it more efficient.

The chancellor Rachel Reeves announced as part of the Autumn Budget measures that the Income Tax thresholds will be maintained at their current levels for a further three years until April 2031. This will see the personal tax allowance frozen at £12,570 through to April 2031 across the UK. In addition, the higher rate threshold will remain at £50,270 (there are differences in Scotland). National Insurance thresholds will also remain frozen until 2031.

This means that more taxpayers will be pushed into paying higher taxes as income increases at a far faster rate than the frozen tax bands. This phenomenon is known as fiscal drag. The freezing of most of the Income Tax allowance and rates at current levels until 2031 means that many taxpayers will pay more Income Tax as their income increases with no corresponding increases in their allowances and more taxpayers will see their taxable income boosted into the 40%, or 45%, Income Tax bands.

The existing thresholds for the basic rate, higher rates and additional rates of tax have also been frozen where income is derived from employment or self-employment. However, the government will create separate tax rates for property, savings & dividend income.

• Tax on most dividend income will increase by 2% from April 2026. The ordinary rate will rise from 8.75% to 10.75%, and the upper rate from 33.75% to 35.75%. The additional rate will remain unchanged at 39.35%.

The changes to the tax rates for property and savings income will take effect from April 2027.

• From 2027-28, the property basic rate will be 22%, the property higher rate will be 42%, and the property additional rate will be 47%. These rates will apply across England, Wales and Northern Ireland.
• From 2027-28, the savings basic rate will be increased to 22%, the savings higher rate will be increased to 42% and the savings additional rate will be increased to 47%.

The current rules that allow Basic Rate taxpayers to receive £1,000 of interest without paying tax, and Higher Rate taxpayers to receive £500 without paying tax are set to remain as is the Starting Rate for Savings of up to £5,000 for lower earners.

The Chancellor’s Autumn Budget, delivered on November 26, 2025, sets the stage for a period of considerable fiscal change over the coming years. While headline income tax rates on earned income remain unchanged for now, the extensions of existing tax threshold freezes, and the introduction of targeted tax increases elsewhere, amount to a significant tax-raising event through “fiscal drag”.

For individuals and businesses, the key takeaway is a need for proactive financial planning. The measures announced create specific windows of opportunity and highlight the growing importance of using tax-efficient structures. Here are the immediate planning opportunities to consider.

1. Revisit Your Pension Strategy

Significant changes to pension rules are on the horizon. From April 2029, National Insurance relief on salary sacrifice pension contributions will be capped at £2,000 annually per employee. Additionally, from April 2027, most unused defined contribution pension funds will be subject to Inheritance Tax (IHT).

• Action Point: Higher earners using salary sacrifice should review contribution levels and potentially accelerate contributions before the cap. To mitigate future IHT, consider withdrawing the tax-free lump sum during your lifetime to spend or gift.

2. Optimise Your ISA and Savings Strategy

Changes to savings rules encourage a move towards investments over cash. From April 2027, the annual cash ISA allowance for those under 65 will be reduced from £20,000 to £12,000, although the overall £20,000 ISA limit remains. Tax rates on savings interest and property income will increase by two percentage points across all bands from April 2027, with dividend tax rates increasing for basic rate and higher rate tax payers by the same amount, two percentage points, from April 2026. Dividend income falling into the additional rate band is unchanged.

• Action Point: Consider low-risk investments within a Stocks and Shares ISA to utilize the full allowance. Maximize contributions to ISAs and pensions to shield savings from rising taxes, and business owners may consider bringing forward dividend payments before the rate increase.

3. Review Business and Property Structures

Immediate changes impact business owners and property investors. Capital Gains Tax relief on selling a business to an Employee Ownership Trust (EOT) was immediately halved from November 26, 2025. A new annual surcharge on properties in England valued over £2 million will apply from April 2028. Capital allowances are also changing, with a new 40% First-Year Allowance for plant and machinery in January 2026 and a decrease in the main Writing Down Allowance rate from April 2026.

• Action Point: Business owners considering an EOT exit should seek immediate advice. Owners of high-value properties should consider the long-term impact of the surcharge. Businesses should review capital expenditure plans to align with the new allowances.

Conclusion

The Autumn Budget 2025 signals a strategic shift in the tax landscape over the medium term, with the freeze on income tax thresholds until 2031 expected to bring more individuals into higher tax brackets. Effective financial planning requires adapting strategies to this new multi-year reality, making it crucial to consult with your qualified financial or tax advisor. 

The degree of speculation about this year’s Budget announcements was further compounded when the Office of Budgetary Responsibility uploaded their report on Budget changes prior to Rachel Reeves announcements to Parliament.

However, there are to be no changes to the main rates of Income Tax, NIC and VAT that affect wage earners across the UK, but the Budget Report highlights numerous changes to plug the gap in government finances. We have set out below the most impactful of these changes as they affect business owners and UK taxpayers.

Individuals – what changes and what to watch

Personal tax thresholds remain frozen

• The thresholds for income tax and employer National Insurance contributions will be frozen until at least April 2031 (with earlier freezes extended further by the new Budget).
• This “fiscal creep” means that as wages (or inflation) rise, more people will effectively pay higher rates of tax or move into higher tax bands even though nominal rates remain unchanged. 

Higher tax on investment, property and savings income

• Tax rates on dividends, property income and savings income are being increased by two percentage points. The dividend changes are due to take effect from April 2026 and the property and savings income a year later from April 2027.
• Existing allowances (for example on dividends and savings) will continue to provide protection for people with low to moderate amounts of such income.

ISA reforms will see some limits reduced

• From 6 April 2027, the annual cash limit for ISA savings will be reduced to £12,000. The subscription limits for ISAs overall will remain at £20,000. Savers aged 65 and over will continue to be allowed to save up to £20,000 in a cash ISA each year. 

Two-child limit for Universal Credit (UC) to be scrapped

• The two-child limit introduced back in 2017 is to be scrapped from April of next year. The government has said that removing the two-child limit will lift 450,000 children out of poverty. There had been a concerted campaign over many years to have this cap removed.

Pension contributions via salary sacrifice will be limited

• For individuals using salary sacrifice schemes to contribute to pensions tax-efficiently, the relief will be capped so that only the first £2,000 of pension contributions per person per year remain exempt from National Insurance. Contributions above that threshold will be subject to NICs from 2029.
• This change is likely to hit higher earners and those with larger pensions contributions more heavily.

A new council-tax surcharge for high-value properties

• From April 2028, homes valued at over £2 million will attract a “High Value Council Tax Surcharge”.
• The surcharge will be banded: a property worth £2 million to £2.5 million will incur a surcharge of £2,500; properties worth more will pay higher surcharges (up to £7,500 for properties valued over £5 million).
• The surcharge will be collected locally (with council tax) but the revenue will go to central government.

New taxes on electric vehicles, online gambling and imports

• A new per-mile Electric Vehicle Excise Duty (eVED) will be introduced for battery electric cars and plug-in hybrids from April 2028. This is intended to replace some of the lost revenue from fuel duty. The rate will be 3p per-mile for fully electric vehicles and 1.5p for plug-in hybrids.
• The government is removing the customs-duty relief for low-value imports (£135 or less), a move aimed at levelling the playing field for UK retailers competing with foreign-based online sellers. This change will take effect from March 2029 at the latest.
• There will be tighter rules for VAT on ride-sharing taxi apps (preventing misuse of a scheme intended for tour operators).
• Changes to the taxation of online gambling are also on the way. This includes an increase in Remote Gaming Duty from 21 per cent to 40 per cent from 1 April 2026 and the abolishment of Bingo Duty from the same date.

Other changes with possible future effects

• Some changes to Capital Gains Tax for non-resident individuals, share exchange/reorganisation rules, and inheritance-related trust charges for former non-domicile residents were also announced.

Businesses – what changes and what to watch

Business rates relief and targeted support for certain sectors

• The government plans to make permanent lower business rates for over 750,000 retail, hospitality and leisure properties amounting to nearly £900 million per year from April 2026.
• A support package worth £4.3 billion will help businesses with rate bill increases following revaluations from April 2026.
• For film studios, 40 per cent business rates relief will be maintained for ten years, until 2034. 

Corporation tax, capital allowances and investment incentives adjusted

• Corporation Tax remains capped at 25 per cent for the duration of this Parliament.
• Writing-down allowances (the tax relief businesses claim when they buy capital items not qualifying for “full expensing”) will be reduced from 18 per cent to 14 per cent from April 2026, making it marginally less attractive to invest in some capital items unless they fall under the full expensing rules.
• From 1 January 2026, the government will introduce a new 40 per cent First Year Allowance for main rate expenditure. This will apply to most spending on assets for leasing and expenditure by unincorporated businesses.

Withdrawal of certain reliefs and tightening of anti-avoidance rules

• Relief for gains on disposals to Employee Ownership Trusts is being cut, from 100 per cent to 50 per cent. That reduces the appeal of these trusts as a tax-efficient exit strategy or ownership structure for both entrepreneurs and businesses.
• The Budget introduces new anti-avoidance rules addressing certain non-derecognition liabilities, among other technical reforms.

Changes to imports, compliance and VAT arrangements

• The removal of the low-value consignment relief (which previously exempted many foreign online retailers from customs duties on small-value imports) may benefit UK bricks-and-mortar retailers by levelling the playing field.
• More robust HMRC compliance and administrative reforms are planned, which the government expects will reduce the tax gap (the difference between what is owed and what is collected).

Minimum wage changes

• The National Living Wage (NLW) will rise from £12.21 to £12.71 per hour on 1 April 2026, a 4.1 per cent increase. The National Minimum Wage (NMW) for 18-20 year olds will also increase from £10.00 to £10.85, an 8.5 per cent increase, increasing pay by up to £1,500 a year. This change is part of efforts to narrow the wage gap between younger workers and those on the NLW. Additionally, the NMW for 16-17 year olds and the Apprentice Rate will both rise from £7.55 to £8.00 (a 6 per cent increase).

What this means in practice for different types of taxpayers

For a middle-income employee

If you are a typical employee with mainly salaried income and modest savings or investment income, the freeze on thresholds may slowly push more of your earnings into higher rate bands, reducing your disposable income over time. If you rely on dividends or rental income, your after-tax return may suffer due to the higher rates. Pension contributions made via salary sacrifice may lose some of their attractiveness if they exceed £2,000 per year, but modest savers should be relatively unaffected.

For higher earners, property owners, and investors

If you own a high-value home, rental property, or significant investments, these changes may hit you harder. The council-tax surcharge on expensive properties and the higher rates on investment income make clear that future tax burdens will increasingly fall on wealth, capital, and savings rather than earned income. Pension-savings advantages for high earners are reduced. For business owners, particularly those using or considering Employee Ownership Trusts, the reduction in reliefs may diminish some previously attractive exit or succession planning strategies.

For small businesses, investors and growth companies

The maintenance of Corporation Tax at 25 per cent provides some certainty, but reduced capital allowances and fewer reliefs may raise the effective tax cost of certain investments. On the plus side, support for high-streets (lower business rates for retail, hospitality, leisure) and targeted reliefs (e.g., for film studios) offer relief for businesses in those sectors. The removal of import-duty relief for low-value imports could benefit UK retailers by levelling the competitive field.

Broader context and likely economic impact

• The government expects these measures to raise around £26 billion per year by 2029-30, making this among the largest medium-term tax increases in recent decades.
• As a result, the overall tax take is projected to reach a record 38 per cent of GDP by 2030 -31.
• Some planned reliefs and public spending measures are intended to offset cost-of-living pressures: for example, cuts to energy bills, freezing rail fares, and support for households on lower incomes.

What to keep an eye on

• Implementation: Many changes (pension-salary sacrifice cap, high-value property surcharge, vehicle mileage levy) come in over a number of years. The detail of how they will be applied may affect their actual impact.
• Behavioural responses: As thresholds remain frozen and investment incomes are taxed more heavily, individuals may shift the balance of their income (more salary, less dividends, changes to pension contributions) which could reshape personal tax planning strategies.
• Business planning and investment: Reduced writing-down allowances and withdrawal of some reliefs may influence decisions about capital expenditure, timing of investments, and business structure (especially for those considering Employee Ownership Trusts).
• Compliance and administration: The government’s push to tighten compliance and close loopholes may mean higher scrutiny for individuals and businesses, particularly around imports, VAT, and offshore arrangements.