Rachel Reeves announced some changes that could impact business owners and entrepreneurs. Read on to find out what the Autumn Budget means for you.
Article last updated 3 December 2025.
The Chancellor’s Autumn Budget continues a now well-established trend, reinforcing what we’ve seen in recent years. Those with the “broadest shoulders” are once again asked to bear the lion’s share of the contribution to the nation’s piggy bank.
While Reeves’ measures focus on protecting working households and easing the burden for people in retirement, individuals with significant property, investment and pension assets are facing yet another tightening of the tax net.
Income tax
Income tax thresholds remain frozen until 2031, a move expected to pull nearly 1mn more people into higher-rate tax bands by 2030. Property owners will see new annual charges on homes worth over £2mn from 2028, and rental income tax rates will rise by 2% from 2027.
Dividend tax rates will increase by 2% in 2026, and savings tax rates will increase by 2% from 2027, reducing net returns on investment portfolios and forcing people to be more strategic with where and how their money is invested. Business owners who rely on dividends as their main income stream will also feel this pinch, having already felt the impact last year from the increase in the rate for employer national insurance contributions.
Inheritance tax
The Treasury announced changes in its 2024 Budget, which will soon come into force. From 2026, IHT relief for agricultural and business property will be reduced, with 100% relief capped at £1mn and the relief on the excess limited to 50%. When taken alongside the Treasury’s decision to pension assets within the estate for IHT purposes from 2027, this means future liabilities could rise significantly.
Pensions
The fact that pension pots will soon fall within estates has made us consider the order in which to draw down from assets in retirement. In some instances, it’s advisable to put pensions firmly at the top of the list to avoid a double whammy of income tax and inheritance tax in future.
Reeves introduced a salary sacrifice cap of £2,000 on pension contributions. After much media speculation in the weeks preceding the Budget, this was the only change to pensions.
Still, the direction of travel is clear: wealth holders are being asked to contribute more, year after year.
