This last month or so has brought speculation on numerous topics and potential new tax implementations.
Finally, after the Chancellor released her Autumn Budget yesterday, we have some clarity. We have combed through the details and picked out the key points that we believe will directly impact our clients:
- Dividend Tax Rates – increasing by 2% from April 2026. A big one for many who operate as a Limited Company. From 6 April 2026, the ordinary rate will be 10.75% and the upper rate will be 35.75%. The additional rate will remain at 39.35%.
- Income Tax and National Insurance (NI) Thresholds – These were frozen in 2023 to 2028 and this has been extended to 2031. Ultimately, this means that more people will be dragged into the higher thresholds over time.
- Mansion Tax – properties worth over £2million will face a High Value Council Tax Surcharge.
- New taxes on electric vehicles – 3p per mile, 1.5p per mile for plug in hybrids, from April 2028. Introduction of a new mileage supplement for electric and plug-in hybrid cars from 1 April 2028. Extend 100% first-year allowances for zero-emission cars and electric vehicle charge points to 31 March 2027 for Corporation Tax and 5 April 2027 for Income Tax.
- Landlord Rates increase 2% from 6th April 2027 to 22% for the basic rate, 42% for the higher rate and the additional rate will be 47%. This is pretty straightforward – you pay more tax on your property income.
- Minimum Wage Increases – from 1 April 2026 these are increasing to £12.71 per hour for over 21s apprentices (previous £12.21), to £10.85 for 18-20 year olds (previously £10.00) and to £8.00 for 16-17 year olds and apprentices (previously £7.55). If you are an employer, naturally this means your wage bill will go up. This is a raise of around 4% for low-paid staff over 21, 8.5% for 18-20 year olds and 5.9% for apprentices and 16-17 year olds.
- ISAs – £12k Cash ISA + £8k Stocks and Shares ISA. 65 Years and over = £20k cash. The breakdown of this is as follows: Previously you could put £20k into a Cash ISA, which you could then receive interest on tax free. From April 2027, you can only put up to £12k into a Cash ISA, and then the next £8k will now need to go into a Stocks and Shares ISA. The purpose of this is to encourage people to invest in businesses, which as time goes by, should see a return on their investment.
- Under 25s Apprenticeships for SMEs are now free. Whilst the minimum wage increase may make hiring new staff less appealing, this is a strong incentive for Small and Medium businesses to take on apprenticeships and train the future workforce.
- Salary Sacrifice pensions £2k cap – this is not until 2029, to allow employers to make the transition and adjustments required. The main point is that HMRC sees these schemes as taking money out of the public wallet, so they will limit the amount you can put in to £2k, and then anything after that will be subject to the standard pensions NI rate. The legislation on exactly how this will all be implemented has yet to be released.
- Working From Home (WFH) Allowance Restricted From 6 April 2026, the £6 per week flat rate working from home allowance deduction for employees has been restricted. The only way this can now be claimed tax free is if the employer reimburses you – i.e. you receive the £6 per week as tax free income.
This is not an exhaustive list of everything that the Chancellor covered and there are many other aspects that may affect you. If there are any parts that you want to seek clarification on, please don’t hesitate to get in touch.