Budget 2025: Key Points & Key Figures

🔹 Income Tax & Thresholds

• Tax thresholds frozen until 2030/31
– Personal allowance and higher-rate band stay fixed.
– Raises £7-8bn a year through “fiscal drag.”
– More people pushed into the 40% band and the 60% taper above £100k.

🔹 Dividend Tax

• Dividend tax rising by 2 percentage points from April 2026
– Basic rate: 10.75%
– Higher rate: 35.75%
– Additional rate: 40.35%
Impact: Around £200 extra tax per £10k dividends.

🔹 Salary Sacrifice Cap

• Hard cap of £2,000 per year from April 2029
This will hit high earners who sacrifice salary for pension contributions.

🔹 EV Road Charge (New Tax)

• Starts April 2028
– Pure EVs: 3p per mile
– Hybrids: 1.5p per mile
Annual example:
– 10,000 miles → £300 (EV)
– 20,000 miles → £600

🔹 Property, Savings & Landlord Taxes

• Dividend, savings and property income taxes all rising
– Dividend: confirmed +2% (above).
– Savings income: approx +1%.
– Property income: expected +1–2%.
Landlords face higher ongoing tax costs.

🔹 Capital Gains Tax

• Expected from April 2026
– Property CGT higher rate: 24% → 28%
– BADR lifetime limit halved: £1m → £500k
Example: £100k gain on rental → £4,000 more tax.

🔹 Two-Child Cap Abolished

• Starts April 2026
Worth around £3,235 per extra child, per year.
One of the few household-friendly measures.

🔹 Gambling Taxes

• Remote gaming duty rising from 21% → 40% in April 2026
Expected to raise £1.1bn per year.
Likely impacts prices, odds and promotions.

🔹 State Pension (“Triple Lock”)

• Rise of approx. 4.8% expected in April 2026
But with frozen tax thresholds, more pensioners will be pulled into paying income tax.

🔹 Corporation Tax

• Main rate stays at 25%
• Early-stage proposal for 40% relief on start-up costs (not yet legislated).
• Compliance pressure increasing (R&D, VAT, IR35, director loans).

A separate small profits rate (SPR) of 19% applies to companies with profits of £50,000 or less. If profits are between £50,000 and £250,000 there will be a marginal rate - https://www.gov.uk/guidance/corporation-tax-marginal-relief.

🔹 Capital Allowances (Low Impact for Small Firms)

• AIA falls from £1m → £250k in 2026
Mainly affects larger investors; most small businesses are unaffected.

🔹 Council Tax Surcharge (Likely)

Expected from 2026 on higher-value homes and second homes.
Indicative impact:
– £150–£350 extra for Band D–F
– £500+ for Band G+

Bottom Line (Short & Honest)

This Budget is a slow squeeze: tax rises on dividends, income, property, EV use and gambling, plus tighter thresholds.

There are some wins (two-child cap scrapped, possible start-up relief), but overall it’s a tax-heavy package.

Not disastrous but definitely not a giveaway.
A steady tightening rather than a single big hit.