What the Autumn Budget means for business owners and wealthy families

The 2025 Autumn Budget is set to raise an estimated £26 billion in additional taxes by 2029/30, and the outcome was a mixed bag for business owners and wealthy families .

Chancellor Rachel Reeves unveiled several changes that will have a direct impact on businesses, from dividend taxation and pension arrangements to wage costs, reliefs, and customs duties. And many families will also likely see a rise in their tax bill, thanks to frozen thresholds and new property taxes.

It’s important to understand these developments so you can plan effectively and accommodate the latest reforms into your financial plan.

Read on to find out what the Budget means for business owners and wealthy families.

The freeze on tax thresholds could affect both employees and employers

The current freeze on Income Tax and National Insurance (NI) thresholds was set to last until 2028, but Reeves extended it for a further three years to 2031.

This decision is likely to have a long-term impact on both employers and employees. As wages rise over time, more people will find themselves pushed into higher tax bands due to what is known as “fiscal drag”.

This could mean the tax burden on your family’s household income increases over time. So, if you receive a pay rise or a promotion, you may want to explore salary sacrifice options. This could help keep you below certain income thresholds and ensure more of your earnings stay efficient.

Moreover, if you run a business, this could put pressure on your payroll as staff may seek additional benefits to offset their reduced take-home pay. It may also make recruitment and retention more challenging, particularly for small businesses.

As such, it’s important to review your pay structures and benefits packages to ensure they remain competitive and sustainable over the coming years.

The rise in Dividend Tax rates could increase your tax bill

If you own shares in a company, whether it’s your own business or an investment, you may receive dividend payments.

Indeed, many business owners choose to pay themselves in dividends instead of or alongside a salary because they’re typically taxed more favourably, making them a more efficient way to earn income from your company.

However, from April 2026, Dividend Tax rates will increase by two percentage points at the basic and higher rates. The new rates will be:

10.75% for basic-rate taxpayers
35.75% for higher-rate taxpayers
39.35% for additional-rate taxpayers (unchanged).

If you rely on dividends for some or all of your income, these changes will increase your tax bill. While dividends will still be more efficient than a regular salary charged Income Tax, the gap is narrowing, and you may need to adjust your strategy to ensure your pay remains the same.

A financial planner can help you review your income structure and explore options to ensure it remains efficient.

The cap on pension contributions eligible for salary sacrifice could raise business costs and limit your efficiency

Many employees and businesses choose to make pension contributions via salary sacrifice as it helps save NI for both parties.

However, from 2029, the amount you can contribute to a pension via salary sacrifice without incurring NI will be capped at £2,000 a year. Any contributions made above this limit will attract full employer and employee NICs.

This change could lead to higher costs, whether you run a business or if you’re a high earner and use salary sacrifice to help keep your pension efficient.

So, if you’re a business owner, you may need to review your benefits packages to assess how the cap affects both your employees’ pay and your business’s outgoings. If you’re a high earner, you might want to assess the effect on your overall efficiency.

A financial planner can help you model the long-term cost implications of this cap and identify alternative strategies to keep your pension contributions as efficient as possible.

Other reforms could affect your family

If your family has significant savings or property holdings, you’re also likely to feel the impact of several new measures.

First, tax on income from property and savings will rise by two percentage points. For income above the relevant allowances, this means:

22% for basic-rate taxpayers
42% for higher-rate taxpayers
47% for additional-rate taxpayers

Additionally, the government confirmed a new property surcharge, known as a “mansion tax”, for homes valued at more than £2 million.

Properties currently in Council Tax bands F, G, and H will be revalued from 2028, and those above the £2 million threshold will face an additional annual charge.

There will be four valuation bands, with surcharges ranging from £2,500 for homes between £2 million and £2.5 million, up to £7,500 for properties worth £5 million or more.

Furthermore, from 2027, if you’re under 65, you’ll only be able to put up to £12,000 a year into Cash ISAs. The remaining £8,000 will only be allowed for investment accounts. This change is expected to affect the roughly 25% of savers who contribute more than £12,000 a year to Cash ISAs.

Finally, if your family owns an electric car, you will pay 3p per mile from 2028, and if you have a hybrid, you’ll pay 1.5p per mile, with the rates going up each year in line with inflation.

Other reforms could affect your business

There were several other announcements in the Budget aimed directly at business owners.

Some measures are designed to support growing and early-stage companies, including:

A new Stamp Duty relief for businesses newly listed on the London Stock Exchange.
More than 750,000 retail, hospitality, and leisure properties will also see their business rates reduced.
Fully funded apprenticeships for under-25s from April 2026.

Other measures are likely to be less welcome:

Capital Gains Tax relief on sales to Employee Ownership Trusts (EOTs) will be cut from 100% to 50% with immediate effect.
Customs Duty will apply to all parcels regardless of value from 2029, removing the current exemption for items under £135. This will particularly affect your business if you import low-value goods.

Moreover, Reeves announced a series of wage increases set to come into effect from April 2026:

National Living Wage rising to £12.71 an hour (from £12.21)
National Minimum Wage increasing to £10.85 an hour (from £10)
Apprentice rate increasing to £8 an hour (from £7.55).

If you’re an employer who employs lower-paid, entry-level, or junior staff, these increases could significantly raise your costs. So, it’s important to reassess your staffing budgets and plan ahead of April to help avoid sudden financial pressure.

Get in touch

As you can see, the Budget painted a complex picture for businesses and wealthy families, and it’s a good idea to factor the changes and reforms into your financial plan as soon as you can.

To speak to a financial planner, get in touch.

Email [email protected] or call us on 01625 466360.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available.