UK Autumn Budget 2025 – Finance

The key finance related announcements are as follows:

• Tax rates (including withholding tax rates) and thresholds – as part of an anticipated series of tax rises for individuals, and with a view to shifting some of the burden of taxation from employment to passive income, the government is increasing the tax rate on savings (and property) income by 2% across all bands from April 2027. The ordinary and higher rates of tax on dividend income will be increased by 2% from April 2026, with no change to the dividend additional rate. Personal tax thresholds will remain frozen for another 3 years from 2028-31.
  
  HMRC announcements indicate that, as a consequence of the change in the savings rate, the withholding tax rate applicable to interest payments from a UK 'source' will also increase from 20% to 22%. Accordingly, the management of withholding tax on UK interest, has increased in importance.
  
  The new property income tax basic rate will increase the withholding tax on property income distributions from REITs and PAIFs from 20% to 22% – and also apply to withholding under the non-resident landlord scheme. Whilst the latter is usually managed through clearance with HMRC, an increase in withholding tax rates on distributions from certain fund structures may decrease some of their appeal for investors that cannot access more beneficial rates of withholding under double tax treaties or domestic exemptions.
  
  
• ISAs will also be reformed. From 6 April 2027 the annual ISA cash limit will be reduced to GBP12,000 within the overall annual ISA limit of GBP20,000. Annual subscription limits will remain at GBP20,000 for ISAs, GBP4,000 for Lifetime ISAs and GBP9,000 for Junior ISAs and Child Trust Funds until 5 April 2031. Savers over the age of 65 will continue to be able to save up to GBP20,000 in a cash ISA each year.
  
  
• Stamp Taxes – as part of an effort to boost the attractiveness of the UK as a destination for IPOs and capital-raising, with effect from 27 November 2025 transfers of a company’s securities will be subject to relief from the 0.5% stamp duty reserve tax charge for three years from the point the company lists on a UK regulated market. Separately the government confirmed that it plans to legislate in the Finance Bill 2025-26 to enable testing of a digital service for the Securities Transfer Charge, which will replace stamp duty and stamp duty reserve tax as part of the previously announced modernisation of stamp taxes on shares.
  
  
• Transfer Pricing – the government has confirmed that it plans to require in-scope multinationals to submit an International Controlled Transaction Schedule (ICTS) which will report information annually on cross-border related party transactions. This measure is expected to take effect for accounting periods beginning on or after 1 January 2027, and technical consultation on its design will take place in spring 2026. A response has also been published to the consultation on reform of transfer pricing legislation (as well as the rules relating to permanent establishments and diverted profits tax), including the proposed repeal of UK to UK transfer pricing. The government will include primary legislation relating to these reforms in the Finance Bill 2025-26 and they will generally take effect for chargeable periods beginning on or after 1 January 2026.
  
  
• Cryptoassets – the government has confirmed that UK reporting Cryptoasset Service Providers will be required to report on their UK tax resident customers under the previously announced Cryptoasset Reporting Framework. This is in addition to reporting on non-UK tax resident customers which is already required under the Framework. Information for first reports to HMRC will be collected from 1 January 2026 and reported to HMRC in 2027. The government has also published a summary of responses to the “Taxation of decentralised finance (DeFi) involving the lending and staking of cryptoassets” consultation. In large part the summary simply confirms that HMRC's work on this area is ongoing, but it does indicate that treating certain cryptoasset lending arrangements as “no gain, no loss” is the likely direction of travel.
  
  
• NICs relief on pension contributions – with effect from April 2029, the National Insurance Contributions (NICs) relief available on employee pension contributions made under salary sacrifice arrangements will be capped at GBP2,000 per employee per year. Contributions within the GBP2,000 limit will continue to benefit from NICs relief for both employees and employers. Contributions exceeding GBP2,000 will be subject to both employee and employer NICs. Contributions through salary sacrifice, like all pension contributions, will remain exempt from Income Tax.