We have pleasure in attaching our summary of the key announcements in the 2025 Budget.
Among the wide range of measures were:
- The personal allowance and the existing income-tax thresholds remain fixed at their current cash values for a further three years to 2030/31.
- Tax rates will increase by 2 percentage points from 2026/27 for dividend income (the additional rate on dividends will stay at 39.35%), followed in 2027/28 for savings and property income.
- Fuel duty will increase in stages by 1p per litre on 1 September 2026, a further 2p on 1 December 2026 and a final 2p on 1 March 2027.
- A new usage-based Electric Vehicle Excise Duty (eVED) will be introduced from April 2028 establishing a charge per mile for electric cars. Average EV drivers are expected to pay around £240 a year initially and plug-in hybrid cars will attract a reduced rate.
- From 1 April 2026, new permanently lower multipliers apply to eligible retail, hospitality and leisure properties with rateable values below £500,000. For all higher value business properties, a new multiplier will apply.
- A High-Value Council Tax Surcharge will apply to owners of residential properties, valued at £2 million or above, from April 2028 in addition to existing council-tax liabilities.
- From 6 April 2029, the amount that an employee may contribute to a pension through salary sacrifice without paying national insurance contributions (NICs) will be capped at £2,000 a year.
- The individual savings account (ISA) subscription limit remains £20,000. However from April 2027, for savers under the age 65, there is a limit of £12,000 for cash ISAs with the remaining £8,000 reserved for stocks and shares ISAs.
- The two-child limit for Universal Credit is abolished. Families with more than two children will no longer see their entitlement restricted.
We trust that you find the enclosed Budget Summary useful and that it is a helpful basis for a discussion with us about your financial future.