What the Autumn Budget means for you

After months of speculation, and an unprecedented early release of details by the UK’s budgetary watchdog, the Chancellor, Rachel Reeves, finally announced her second Budget at the end of November.

As expected, the focus of her address was on the three cuts that have been referenced in the run up, namely cutting the cost of living, NHS waiting times and government debt. The repercussions of these cuts will have tangible implications on businesses and individuals alike, in terms of taxes, financial forecasting and budgeting.

Here are some of the key takeaways from the Budget:

• Minimum wage increases – The minimum wage for over-21s is set to rise by 50p per hour and by 85p per hour for 18-20s. Once the rises come into effect in April 2026, more people may be pushed into higher tax brackets and, for many businesses, this will increase overhead costs.
• Reduced cash ISA savings – For those under 65, the amount you can put tax-free in a cash ISA account will be reduced from £20,000 to £12,000 from April 2027.
• Income tax and NI threshold freezes – Whilst the Chancellor has not increased the rate of income tax or NI, she has frozen the thresholds at which tax becomes payable. This means, as salaries rise year-on-year, more people will be forced into higher rate tax thresholds.
• Pensions tax breaks – Previously, workers could make unlimited ‘tax free’ pensions contributions under the ‘salary sacrifice’ scheme.  From 2029, this will be limited to £2,000 per year, with any salary sacrifices over and above this amount subject to NI.
• Property taxes – If you own a property worth over £2 million, from 2028, it will be subject to an additional tax of £2,500 per year, and properties worth over £5 million will be charged £7,500 per year.
• Inheritance tax - IHT thresholds have been frozen until 2030-31, highlighting that no concessions will be made to alleviate the burden of inheritance tax for families. Matters will only be made worse from April 2027, when pensions will be drawn into the equation for taxable estates.

If you wish to discuss this further, please do not hesitate to contact Katie Gillam by email: kjg@cooperburnett.com or tel: 01892 515022

This blog is not intended as legal advice that can be relied upon and CooperBurnett LLP does not accept any responsibility for the accuracy of its contents.

Originally published in the Tunbridge Wells Business Magazine: www.twbusinessmagazine.com