The chancellor delivered her Autumn Budget yesterday. Please find our summary of the key tax announcements:
Individuals
- A freeze on the Income Tax personal allowance (£12,570), higher rate tax threshold (£50,270) and additional rate tax threshold (£125,140) for a further 3 years to 05 April 2031. Please note that the income tax rates in Scotland differ.
- A freeze on the National Insurance Contributions (NIC) thresholds for a further 3 years to 05 April 2031. This includes the threshold where employers start paying NIC which has been frozen at £5,000.
- Salary Sacrificed Pension contributions of above £2,000 will now be chargeable to both Employers and Employees NIC from 06 April 2029.
- Tax relief on non-reimbursement of Work from Home to be removed from 06 April 2026.
- The dividend tax rates are being increased for some income tax rates from 06 April 2026:
- Basic Rate Taxpayers from 8.75% to 10.75%
- Higher Rate Taxpayers from 33.75% to 35.75%
- Additional Rate Taxpayers are unchanged at 39.35%
- The Income Tax rates on Savings and Property income are being increased for all tax rates from 06 April 2027:
- Basic Rate Taxpayers from 20% to 22%
- Higher Rate Taxpayers from 40% to 42%
- Additional Rate Taxpayers from 45% to 47%
- Voluntary Class 2 NICs to be abolished for individuals living abroad.
- The rate of income tax relief on Venture Capital Trusts(VCTs) to be reduced from 30% to 20% from 06 April 2026.
Other Taxes
- For Inheritance tax, the nil rate band (£325,000), the residence nil rate band (£175,000) will be frozen for an extra year to 05 April 2031.
- A new High Value Council Tax Surcharge (HVCTS) will apply to owners of residential properties valued at more than £2million with the rate going from £2,500 to £7,500. The Values will be uprated annually by the Consumer Price Index (CPI).
- For Under 65s the Cash ISA allowance will fall to £12,000. The overall ISA Allowance will remain at £20,000.