📢 Budget 2025: The Key Points at a Glance

Budget Day has come and gone, and whether you're self-employed, running a limited company, or just trying to stay smart with your money — this year’s announcements have a few important changes you’ll want to know about.

So, let’s break it all down into a quick and clear summary (no jargon, no overwhelm!) 👇

🧾 Tax Threshold Freeze Extended (Again)

The income tax thresholds will now stay frozen until 2031 — meaning you could be pulled into higher tax bands as your income increases, even if the rates themselves don’t change.

💡 A subtle move, but one that’s expected to raise £8 billion for the Treasury through what's often called "fiscal drag".

📈 Changes to Dividend, Savings & Property Income Tax

💷 Dividends (from April 2026)

• Basic rate: increases to 10.75%

• Higher rate: increases to 35.75%

• Additional rate: remains at 39.35%

👉 If you take dividends from your company, this will impact your personal tax bill.

💰 Savings Interest (from April 2027)

• Basic rate: rises to 22%

• Higher rate: 42%

• Additional rate: 47%

👉 This applies to interest earned on personal savings (outside of tax-free ISAs).

🏠 Property Income (from April 2027)

For unincorporated landlords, property income will now have its own set of rates:

• 22%, 42%, or 47%, depending on your income band

Mortgage interest relief will continue to be given as a tax credit, capped at 22%.
And from April 2027, your personal allowance must be applied to earned income (salary, self-employment) before it's used on property or savings income.

👶 Two-Child Benefit Cap Scrapped (from April 2026)

Parents will now be able to claim Child Benefit for all children, regardless of how many they have or when they were born.

💼 Salary Sacrifice Pension Changes (from April 2029)

If you use salary sacrifice to boost your pension tax-efficiently, take note:
From April 2029, National Insurance will be charged on contributions above £2,000 per year.

👵 State Pension Increases (from April 2026)

• Basic state pension increases by £440 a year

• New state pension increases by £575 a year

💰 Cash ISA Reforms – But the £20,000 Limit Stays

From April 2027, the cash ISA allowance will drop to £12,000.

BUT — the overall £20,000 ISA limit still applies, meaning you can still use the rest of your allowance in stocks & shares ISAs.

👉 Savers aged 65 and over will still be able to use the full £20,000 in a cash ISA if they prefer.

🏠 Mansion Tax Introduced (from April 2028)

A new tax will apply to properties worth over £2 million:

• £2,500 for homes between £2m–£2.5m

• Up to £7,500 for homes worth more than £5m

⛽ Fuel Duty Frozen

Fuel duty remains frozen at 52.95p per litre until September 2026.
So no changes at the pumps for now!

🚗 Mileage Tax for Electric Vehicles (from April 2028)

• Electric cars: 3p per mile

• Plug-in hybrids: 1.5p per mile

👉 This is expected to raise £1.4bn and reflects the government’s shift toward road pricing for EVs.

💡 Energy Bill Support

A reduction in green levies means the average energy bill will fall by £150 from April.

🎓 Free Apprenticeship Training for Under-25s

Part of the government’s Youth Guarantee, which aims to get young people into education, apprenticeships, or work.

• Under-25s at small businesses will now receive free apprenticeship training

• Additional funding of £820 million to support young jobseekers

🧾 Wider Inheritance Tax Relief

Spouses can now transfer 100% of their IHT relief allowance, making it easier to pass on wealth without a large tax bill.

🛍️ Business Rates Shake-Up (from April 2026)

• 750,000 retail, hospitality and leisure properties will see reduced business rates

• This will be funded by increasing rates on larger premises worth over £500,000

💷 National Minimum & Living Wage Increases (from April 2026)

• Living wage (21+): rising to £12.71/hour

• 18–20 year olds: £10.85/hour

• 16–17 year olds & apprentices: £8/hour

🤔 What Should You Do Next?

If any of these changes could affect your:

• Business

• Income

• Savings strategy

• Retirement planning

…then it’s a great time to review your setup and plan ahead. Don’t leave it until next April!

📘 PS: My New Tax Book is Coming Soon!

And yes — all these key Budget updates (and loads more money-saving tips) are packed into my brand-new tax book — launching soon! 🥳

It’s your go-to guide for keeping more of your hard-earned money and staying fully compliant without the stress.
📘 Keep your eyes peeled — you won’t want to miss it!

Yours in staying Budget-aware and business-smart,
Lisa x
Team TaxTalks