Major Changes

• There will be an increase to the income tax rate for income from Property, Savings and Dividends of 2% in the basic and higher rate bands and to Property and Savings income in the additional rate band from April 2026.

• National Minimum Wage and National Living Wage are being increased from April 2026:

  • 18 - 20 year olds - £10.00 to £10.85 per hour

  • 21 years and above - £12.21 to £12.71 per hour

• From 2028, there will be a high value council tax surcharge of £2,500 for properties worth more than £2m, rising to £7,500 for properties worth more than £5m.

• An electric vehicles excise duty payable annually at a rate of £0.03 per mile for electric cars and £0.015 for plug in hybrid cars will be introduced from April 2028.

• From April 2027, the cash ISA allowance will be reduced to £12k for under 65s. Stocks and Shares ISAs will remain at £20k to encourage investment.

• The government is going to make funding available that makes apprenticeships for under 25’s completely free for small and medium sized businesses.

Taxation

• A new 40% first year allowance is being introduced for asset purchases made after 01/01/2026.

• Voluntary class 2 National Insurance will be abolished for people living abroad from 06/04/2025.

• The Income Tax and National Insurance threshold freeze set by the Conservative government until 2028 has been extended to 2031.

• Plan 2 student loan threshold to remain the same.

• The 100% capital gains tax relief given on the sale of a business to an employee ownership trust has been reduced to 50% from 26/11/2025.

• A duty will be added for vaping products from October 2026.

• Salary sacrifice pensions will be capped at £2,000 with any excess amounts taxed as normal pension contributions from April 2029.

• No increase to national insurance or VAT.

• Corporation Tax to remain at the same rate.

Business Rates

• Business rates are to be reduced for small retail, hospitality and leisure properties and increased for higher rate properties (worth over £500k) from April 2026.

• Business rates on electric vehicle charging points will be given 100% relief.

State Pensions and Benefits

• People who’s only source of income is the basic or new state pension will no longer be charged small amounts of tax through simple assessment.

• The limit for child benefit to 2 children is being removed from April 2026.

• State pension will be increased by 4.8% from April 2026.

Other Changes

• The £0.05 cut to fuel duty has been extended until September 2026.

• Fuel stations will be mandated to share real time prices.

• Green energy scheme is to be scrapped, the chancellor expects this to save £150 per household per year from April 2026.

If you would like to see historical budget information please click here.