The latest Autumn Budget brings a series of tax changes that will affect individuals and businesses.

Danny Roughley, our Expatriate Tax Director offers a brief summary of the key points:

  • No rise in income tax, National Insurance, or VAT rates.
  • Income tax bands will remain frozen until 2031, extending the freeze by three years beyond 2028 – meaning more people will move into higher tax bands as wages rise (fiscal drag).
  • From 2028/29, electric car owners will pay 3p per mile, and hybrid drivers 1.5p per mile, with rates linked to inflation.
  • Pension rules stay the same for the 25% tax-free lump sum and contribution relief.
  • From April 2029, salary sacrifice pension contributions above £2,000 per year will attract both employer and employee NICs: 15% and 8% respectively for earnings under £50,270 and 2p on income above that level.
  • High-value property owners face a new council tax surcharge from April 2028. £2m–£2.5m: £2,500, £5m+: £7,500. Expect thresholds to tighten over time.
  • Dividend tax rates rise by 2% from April 2026: Basic rate: 10.75%, Higher rate: 35.75%.
  • ISA allowance stays at £20,000, but from April 2027, at least £8,000 must be in investment; Cash ISA cap therefore drops to £12,000 (over-65s unaffected).
  • Voluntary Class 2 NICs for those living overseas will end. This is a major shift for expats who have relied on Class 2 NICs to maintain UK State Pension entitlement at a low cost. After this change, the only option will be Class 3 NICs, which are significantly more expensive (currently £17.75/week vs £3.50/week for Class 2).
  • Savings income tax will increase by 2% across all bands from April 2027.
  • Property income gets its own tax rates from April 2027: Basic: 22%, Higher: 42%, Additional: 47%. Finance cost relief will match the property basic rate (22%).
  • Student loan repayment threshold frozen for three years from 2026/27.

Thinking about leaving the UK because of rising taxes? We offer expert tax planning services, including strategies to break UK tax residency, and can handle all your UK tax filings to ensure compliance and peace of mind.

Contact us today at [email protected].