Autumn Budget 2025: What It Really Means for You & Your Business

For sole traders, limited company owners, landlords & employers.

The Autumn Budget has now been fully released, and we know many business owners are understandably asking: “Will this affect my tax bill?” and “Do I need to make any changes?”

This guide explains the key points that matter to you — clearly and based on confirmed information published by HM Treasury, HMRC and the Low Pay Commission. If you'd like advice tailored to your situation, we're always happy to help.

1. Key personal tax changes that affect most business owners

Income tax thresholds remain frozen. The levels at which you start paying 20%, 40% and 45% tax will not increase for several years. As incomes rise, more earnings may fall into higher tax bands — a gradual effect known as fiscal drag.

Dividend tax is rising from April 2026, as confirmed by HM Treasury:

• Basic rate: 10.75%
• Higher rate: 35.75%
• Additional rate: 39.35%
• Dividend allowance: remains at £500

This mainly affects limited company directors and those receiving dividend income from investments.

Savings & property income — major changes from April 2027. The government is introducing new, separate tax rates. Property income will be taxed at 22% (basic), 42% (higher) and 47% (additional). Savings income rates all rise by 2 percentage points to 22% / 42% / 47%. Finance cost relief for unincorporated landlords will be given at the new 22% basic property rate.

Capital Gains Tax: no new CGT changes in this Budget — existing rates and allowances continue for now.

2. How this affects sole traders

• No new taxes on trading income — HM Treasury confirmed there were no changes to how employment or self-employment income is taxed in this Budget.
• Your tax bill may rise gradually over time, due to the ongoing freeze in tax thresholds rather than changes to tax rates themselves.
• National Insurance — no changes were announced for Class 2 or Class 4.
• Your business structure — for profits up to between £40–£50k, remaining self-employed is still a perfectly sensible and often the simplest option.

3. How this affects limited company directors

• Dividend tax rises from April 2026 — the main change affecting how directors take income. A review of the salary/dividend/pension mix may be sensible going into the next tax year.
• No changes to corporation tax — main rate remains 25%, small profits rate remains 19%.
• Threshold freezes affect directors too — salary, dividends, rental income and investment income may push individuals into higher bands more quickly.
• We will review extraction strategies — over the next few months we'll be reviewing our general profit-extraction strategy for directors for the next tax year, and will communicate any advisable adjustments to clients.

4. How this affects landlords

• Rental profits will be taxed at new higher rates from April 2027 — 22% / 42% / 47% — which may increase tax bills for many landlords.
• Mortgage interest relief — finance cost relief will be given at the new 22% property basic rate.
• No new CGT changes this year — but frozen thresholds still make timing of property sales more important.

If you would like us to review your rental position and forecast future tax, we're happy to help.

5. How this affects employers

National Minimum Wage is increasing from 1 April 2026. These rates were confirmed by the Low Pay Commission and accepted by the Government:

• 21 and over (National Living Wage): £12.71 per hour
• 18–20: £10.85 per hour
• 16–17: £8.00 per hour
• Apprentice rate: £8.00 per hour

These increases will affect payroll budgets for many businesses. There were no changes to employer National Insurance rates or thresholds in this Budget — employer contributions continue as before.

Employers should now:

• Review staffing costs for April 2026 onwards
• Update payroll forecasting
• Adjust pricing or budgeting if needed
• Consider the impact on rotas, overtime or staffing levels

We can help model these changes if you need support.

6. Should you be worried?

7. What we will be doing over the next few weeks

• Review our general strategy for company director profit extraction
• Keep an eye on post-Budget Finance Bill updates
• Update clients where helpful
• Be available to answer questions

You do not need to make any immediate changes at this stage.

A final word from us

This Budget increases tax mainly on dividends, rental income and savings, while keeping trading income and employer NI largely unchanged. For most small businesses, this means manageable adjustments rather than major disruption.