The Chancellor dropped the Autumn Budget 2025, and yes – it came with tax rises, freezes, surcharges, and even a mileage tax for EVs (yes!).
If you don’t have time to swim through 130+ pages of HM Treasury text, here’s Experlu’s fast, punchy, everything-you-need-to-know version.
Autumn Budget 2025
The Budget 2025 Hit List (aka “Just tell me quickly”)
- 📈 Dividend tax is up by 2% (new rates below – hold tight…)
- 🏠 Homes over £2m get a new annual property surcharge
- 💷 Savings & rental income tax jumps by 2% from 2027
- 💼 Salary-sacrifice pensions capped at £2,000 NIC relief
- 💰 National Living Wage rockets to £12.71 from April 2026
- 🔌 Electric vehicles charged per mile – 3p for EVs, 1.5p for plug-in hybrids
- 👵 State Pension boosted by £575/year
- 🚆 Rail fares, prescriptions, and fuel duty frozen
- 👶 Two-child limit officially abolished
- 🏗️ £120bn+ committed to building stuff (finally)
Now let’s break this down the Experlu way.
1. The Personal Finance Shake-Up
💷 National Living Wage
From April 2026, minimum hourly pay jumps to £12.71.
Good news for employees.
A budgeting reminder for employers.
👵 State Pension
Triple Lock survives another round.
Increase: £575 per year from April 2026.
🔌 Energy Bills
Forecast shows £150 off the average bill from April 2026.
It’s not a holiday to Spain, but we’ll take it.
❄️ Cost Freezes (2026/27)
- Rail fares: ❄️ frozen
- Prescription charges: ❄️ frozen
- Fuel duty: ❄️ frozen until August 2026
Basically: no extra winter surprises.
2. Dividend, Savings & Rental Income Taxes – All Going Up
📊 Dividend Tax (From April 2026)
A clean +2% rise across the board (except additional rate – that one stays put).
| Band | Old Rate | New Rate |
| Basic | 8.75% | 10.75% |
| Higher | 33.75% | 35.75% |
| Additional | 39.35% | 39.35% |
Dividend allowance: still £500 (generous? not really).
🏘️ Savings & Rental Income Tax (From April 2027)
Add 2% here too. New rates:
- 22% (basic)
- 42% (higher)
- 47% (additional)
Landlords and high-interest savers: you felt that one.
3. High-Value Property Surcharge (£2m+)
Own a home worth more than £2 million?
Say hello to your new annual surcharge.
- Starts at £2m
- Specific rate bands coming in the Finance Bill
- Applies only to residential property
This is the closest thing to a “mansion tax” the UK has seen.
4. Pension & Salary-Sacrifice Overhaul
From April 2029, the party ends:
- Only the first £2,000 of salary-sacrifice pension contributions gets favourable NIC treatment.
High earners: brace yourselves.
5. Business, Employers & Investors – What’s Changing
🏗️ £120bn Capital Investment
Transport, housing, green energy, digital infrastructure – all getting new funding.
🧪 R&D Tax Framework Refresh
A modernised scheme is coming.
Details? In the 2026 Finance Bill.
🏙️ Business Rates
Targeted relief in regeneration zones and northern city-regions.
6. EV Drivers – New Mileage Tax (From 2028)
The rumour became reality.
- 3p per mile → fully electric cars
- 1.5p per mile → plug-in hybrids
- Applies on top of VED
- System still being finalised (pay-as-you-go? annual readings? app tracking? stay tuned)
Why?
Fuel duty revenue is falling – the government wants its slice.
7. VAT & Customs Changes
- VAT relief scrapped for imported parcels under £135
- Tougher VAT rules for digital and overseas sellers
Online sellers outside the UK: you’ve been warned.
8. Welfare Changes
👶 Two-Child Limit Abolished
Universal Credit & Tax Credits no longer restricted to two children.
🎓 Youth Guarantee
Every 16–24-year-old gets access to:
- Work
- Training
- Education
📚 Growth & Skills Levy
New model replacing old apprenticeship funding.
9. Public Services & Departmental Budgets
- Departments must make savings between 2028–29 and 2030–31
- NHS, education, justice: funding commitments stay in place
Translation: reforms, not cuts (for now).
10. Fiscal & Economic Outlook
📈 Growth
2025 growth revised upwards.
🧪 Productivity
Long-term productivity revised downwards → £16bn revenue gap by 2029/30.
💼 Borrowing & Debt
- Fiscal rules met
- Debt expected to fall as a share of GDP within five years
FAQs – Experlu Style
1. What are the biggest tax changes?
Dividend tax, savings tax, rental income tax, the new property surcharge, and salary-sacrifice pension caps.
2. How does it impact dividend income?
Dividend tax rises to 10.75% / 35.75% / 39.35% depending on your band.
3. What’s the deal with the property surcharge?
Homes over £2m now face an annual levy.
4. What are the new savings/rental income rates?
From 2027: 22%, 42%, 47%.
5. Any good news?
Yes – wages up, pensions up, travel costs frozen, and energy bills falling.
image credit: djh.co.uk
