Autumn Budget 2025: What UK Business Owners, Landlords & Investors Need to Know

The Autumn Budget 2025 delivered by Chancellor Rachel Reeves introduced a wide range of tax reforms that will impact individuals, landlords, small business owners, employers, and investors over the next several years.

At Beyond Bookkeeping we've broken down the changes into clear, digestible insights so you know exactly what's changing, when and how it may affect your finances.

The government is tightening rules around investment-based income, reshaping property tax, modernising HMRC systems and signalling for stronger enforcement.

Many thresholds remain frozen, which indirectly increases tax for most earners, while several rates on dividends, savings, and property income will rise.

Clients should expect:

• Higher taxes on dividends, property income and savings

• A cap on pension salary sacrifice

• New homeworking exemptions

• Increased administrative requirements

• Stronger compliance and enforcement from HMRC

• A new Tourism Tax affecting holiday-let owners

Here's everything you need to know.

Income Tax & National Insurance Changes

Higher tax on property, savings & dividends

Property Income (from April 2027)

New separate property income tax rates will apply:

• 22% - Basic Rate

• 43% - Higher Rate

• 47% - Additional Rate

This is considerable increase for landlords, many of whom are already coping with tighter margins due to frozen allowances and rising borrowing costs.

Savings Income (from April 2027)

• Savings basic rate rises to 22%

• Higher rate increases to 42%

• Additional rate rises to 47%

This reduces the relative benefit of holding large amounts in standard savings accounts rathern than investment products.

Dividend Tax (from April 2026)

Dividend rates will rise by 2% for most taxpayers:

• 10.75% - Basic Rate

• 35.75% - Higher Rate

• 39.35% - Additional Rate - Unchanged

For business owners who pay themselves via dividends, this will translate noticeably into a higher personal tax bill.

Frozen Personal Allowances

Although not changed in this Budget, the freeze on personal allowances continues to erode take-home income for many taxpayers and increases overall tax liability through fiscal drag.

Pension Salary Sacrifice Changes

From April 2029, only the first £2,000 of pension contributions made through salary sacrifice will be exempt from National Insurance.

Any contributions above that level will still be permitted but will attract both employer and employee NICs.

This mainly affects higher earners using large pension-sacrifice strategies for tax planning.

NICs for Individuals Abroad

From April 2026, individuals will no longer be able to pay voluntary Class 2 NICs for periods spent abroad. Class 3 NIC applications will require 10 years of continuous UK residency or contributions.

Capital Gains Tax Changes

Employee Ownership Trusts

The CGT relief on qualifying disposals to Employee Ownership Trusts will be reduced from 100% to 50%, effective November 2025.

Incorporation Relief

From April 2026, incorporation relief must be formally claimed through the Self Assessment return, rather than being applied automatically.

Support for Employers

Extension on Veteran's NIC Relief

NIC relief for employers who hire UK Armed Forces veterans will continue until 2027-2028.

Taxation of Cancelled Shifts

Payments for cancelled or changed shifts will now be clearly classified as taxable earnings and subject to National Insurance.

Benefits & Expenses Adjustments

Real-Time Benefits Reporting (from April 2027)

Employers will need to report most benefits in kind through payroll in real time. This will come with software changes and updated administrative processes.

Simplified Homeworking Expense Rules (from April 2026)

New exemptions will cover:

• Homeworking equipment reimbursements

• Eye tests

• Flu vaccinations

This aims to reduce uncertainty and admin burden for businesses and employees.

Vehicle Benefit Changes

Employee Car Ownership Scheme (ECOS) vehicles will be treated as taxable benefits from April 2030, with transitional measures running into 2031.

Compliance & Enforcement

HMRC is significantly expanding its compliance operations, including:

• A strengthened informant reward scheme (15-30% of recovered tax)

• Additional enforcement against illicit tobacco/vaping on high streets

• More targeted criminal investigations

• A future consultation on point-of-sale software to reduce electronic sales suppression

Businesses should expect tighter checks and increased scrutiny from HMRC.

Tourism Tax (Key for Holiday-Let Owners)

The government is introducing a Tourism Tax, which will affect holiday home owners, Airbnb hosts, and short-term rental operators.

Holiday-let owners who are already experiencing the combined pressure of higher interest rates and reduced reliefs may need to adjust pricing and forecasts into 2026.

ISA Changes & Investing Incentives

The Cash ISA allowance will be reduced, with the intention of nudging savers toward investment products such as Stocks & Shares ISAs.

This creates both challenges for cautious savers and opportunities for those with long-term investment strategies.

Corporation Tax

While Corporation Tax rates remain unchanged, late filing penalties will double from April 2026.

Businesses will need to pay closer attention to deadlines and maintain year-round bookkeeping discipline.

HMRC Modernisation

Digital-by-Default Communication (from Spring 2026)

HMRC will begin sending most outbound communication digitally.

Paper letters will remain available for those who opt out or are digitally excluded.

Business Systems Integration Consultation

A 2026 call for evidence will explore how businesses might eventually integrate sales and purchase data directly into accounting software signaling further digital evolution similar to Making Tax Digital.

What These Changes Mean for You

Business Owners

You may see:

• Higher tax on dividends

• More administrative tasks around benefits reporting

• Increased compliance pressure

• No change in Corporation Tax, but tougher penalties

Landlords & Property Investors

Expect:

• Higher tax on property income

• A Tourism Tax for short-term rentals

• The ongoing impact of frozen allowances

• Tighter profit margins

Investors & Savers

Prepare for:

• Reduced Cash ISA limits

• Higher tax on savings interest

• A stronger push toward long-term investing

Employees

The most significant future change will be:

• A cap on pension salary sacrifice from 2029

Need clarity on how the Budget affects your books for tax planning?

Beyond Bookkeeping can help you understand your personal and business position under the new rules, plan ahead, and stay compliant.

Whether you're a business owner, contractor, landlord or investor, we're here to guide you through the changes with clear recommendations tailored to your situation.

Reach out anytime with questions or to book a consultation.