Tax

    Autumn Budget 2025: Impact On SMEs

    Nordens 26 Nov 2025

    The second Autumn Budget delivered by a Labour government in over a decade has landed, and Chancellor Rachel Reeves says it involves "fair and necessary" choices. But what does that actually mean for UK businesses and individuals? Here's our quick, no-nonsense take.

    Dividend, Property, Savings Income & Other Capital-Income Tax Hikes

    • Dividend tax rates, property income tax and savings income tax are being increased from April 2026
    • Dividend rates see an increase in the basic rate and higher rate to 10.75% and 35.75% respectively
    • Property and Savings Income rates will increase across the board to 22%, 42% and 47% respectively

    Our Take: If you currently take dividend income, or for property-rich business owners, this is a big deal. Net returns on capital and property income take a hit, meaning total personal take-home reduces.

    Change to Pension Salary-Sacrifice

    Contributions above £2,000 per year will lose their full National Insurance exemption from April 2029.

    Our Take: If your business uses salary-sacrifice or generous pension schemes, this change could hit hard, especially for higher earners.

    High-Value Property Tax Surcharge

    A surcharge on council tax for homes worth over £2 million, effective from April 2028.

    Our Take: Business owners and property investors need to take note. Holding high-value residential property becomes more costly over time.

    Electric Vehicles: The New Mileage Tax

    A new EV mileage charge from April 2028: 3p per mile for fully electric, 1.5p per mile for plug-in hybrids.

    Our Take: SMEs with fleets or high-mileage staff will need to re-run the numbers fast.

    Capital Gains Tax Relief Reduction on EOTs

    Relief is reduced to 50%, meaning half of any capital gains on EOT sales will now be subject to CGT.

    Our Take: The EOT route is now less financially attractive for business owners looking to exit. Act fast on succession planning.

    Capital Allowance Changes

    • New 40% First-Year Allowance for main-rate assets
    • Writing Down Allowances reduced from 18% to 14%
    • AIA remains at £1 million
    • Full Expensing continues

    Income Tax Threshold Freeze

    Personal allowances and thresholds frozen until the 2030/31 tax year — a stealth tax hike that affects your people.

    Spotlight: The Positives

    • ISA Reform for Savers from 2027
    • Funding Boost for Schools
    • EIS & VCT Extension until 2035
    • EMI Share Option Scheme Expansion

    Nordens remains ready to support SMEs in navigating these new fiscal policies. If you need more advice on how it affects your business specifically, book a free consultation today.