UK Autumn Budget 2025 — Takeaways for Businesses, Owners & Investors

On the 26th of November, 2025, Chancellor Rachel Reeves delivered the UK Autumn Budget 2025. For business owners, investors, landlords and freelancers, it brings a mix of incentives,  and some major tax and compliance changes.

Here’s a breakdown of the most relevant changes and what they could mean for your financial and business planning.

What’s Changed: Capital Allowances, Investments & Company Tax

• The Budget retains the existing “full expensing” regime for qualifying plant & machinery, meaning companies can still write off 100% of qualifying new assets (excluding cars) in the first year. 

• From January 2026, a new 40% first-year allowance (FYA) will apply for expenditure on qualifying plant and machinery that previously did not qualify for full expensing, including assets acquired by unincorporated businesses or intended for leasing.

• On the flip side, from April 2026 the “writing-down allowance” (WDA) rate for the main capital allowances pool will be reduced from 18% to 14%, which lowers the annual write-down relief for assets not eligible for FYA or full expensing. 

• The main corporate tax rate remains at 25% (for companies with profits above the higher threshold) providing stability for company planning. 

Profit-Extraction, Dividends, Property & Savings Income — Higher Tax Costs

• Dividend tax rates increase. From April 2026, basic-rate taxpayers will face 10.75% on dividends, and higher-rate taxpayers 35.75% (additional rate remains unchanged). 

• Tax on property income and savings income will also rise: rates on these categories increase by 2% points across the board for basic, higher, and additional rate taxpayers. 

• For business owners and directors using dividends as a mechanism for profit extraction (rather than high salary), the rising dividend tax makes that route more expensive. Prompting a need to re-evaluate remuneration and extraction strategies.

Now is a good time to get in contact with David Everett out Expert Tax Director extraction strategies, dividend plans, and overall tax efficiency. It may also be wise to re-evaluate whether higher salaries, pension contributions, or retained profits make sense depending on each client’s situation.

VAT, Customs, Indirect Taxes & Compliance Changes

• The standard VAT rate remains unchanged; the VAT registration threshold stays at £90,000. 

• From April 2029 the government will require all VAT invoices for B2B and B2G transactions to be issued in a specified electronic format (e-invoicing), under plans to digitalise tax administrations.

• The long-standing “low-value import” customs duty relief, which exempted imports valued up to £135, is set to be removed by March 2029. Meaning all imports will become potentially subject to customs duty. 

• On “green” vehicles: from April 2028, a new mileage-based vehicle excise duty (VED) will apply to electric (EV) and plug-in hybrid cars. 3p per mile for battery EVs, 1.5p per mile for plug-in hybrids. 

• Other indirect tax changes: The “tour operators’ margin scheme” (TOMS) that some private-hire vehicle operators (PHVOs) used for VAT simplification will no longer apply to certain PHVOs from January 2026, meaning they’ll have to account VAT on their full fare rather than margin. 

Especially those using EVs or importing low-value goods should review their VAT, import and running-cost compliance. The customs duty removal for low-value imports will affect many import-heavy businesses, while businesses using EV company cars should model total cost of ownership under the new mileage-based charge.

What This Means for SMEs, Landlords, Hospitality & Service-Sector Clients 

• For SMEs and small owners thinking of investing in machinery or equipment (e.g. hospitality kitchen refurbishments, small-scale manufacturing, property maintenance, etc.), the expanded capital-allowance incentives present a strong opportunity to invest while enjoying significant tax relief.

• Landlords and property investors should re-run projections: higher tax on rental income and on savings/dividends may affect net returns.

• For clients in retail, import-heavy e-commerce, or hospitality supply chains. This will be the end of low-value import duty relief could increase costs. You may want to flag this and suggest renegotiating supply strategies or sourcing domestically, especially for goods imported from abroad.

• For business owners using company cars, the impending mileage-based charge from 2028 should be planned for now. Factor into cost projections before committing to fleet expansion.

• For contractors, freelancers, or directors using dividends for remuneration. It may now be more tax-efficient to reconsider salary vs dividend mix, especially in light of increased dividend and other income-tax rates.

How Everett King can Support You throughout this change!

• We encourage clients planning capital expenditures to consider accelerating purchases to benefit from first-year allowances/FYA.

•  We consider rebalancing based on higher taxes on dividends, property income, savings.

• Businesses with company cars (especially EVs/hybrids): run cost-benefit analyses including future mileage-based VED charges.

• Hospitality and retail clients, it may be best to consider downstream effects of higher indirect taxes (e.g. sugar tax) on pricing, margins, and customer demand.

You can also get in contact with Everett King if you’d like tailored guidance on how the Autumn Budget 2025 affects your business, property portfolio or personal tax position. Our team can help you review profit-extraction strategies, optimise capital allowances, plan for upcoming VAT and customs changes, and prepare for the rising tax burden on dividends and investment income.

If you’re unsure how these measures impact your cash flow, future investments or long-term planning, we’re here to support you with clear, practical advice. Reach out to through the link below. To arrange a consultation with our Expert Advisors and ensure you’re making the most informed decisions for the year ahead.