Timeline of the major 2025 Budget changes
On the 26th of November 2025, Chancellor Rachel Reeves unveiled her UK Budget that sets the tone for economic policy over the coming years. Beyond headline announcements, the real impact lies in the timeline of implementation - when households, businesses, and investors will start to feel these changes. From immediate measures like capital gains tax adjustments to phased reforms in income tax, benefits, and green levies stretching into 2031, understanding this schedule is crucial for planning ahead. In this post, we break down the key implementation dates.
Immediate (from the 26th of November 2025)
CGT relief for Employee Ownership Trusts restricted to 50% (previously 100%).
Various anti-avoidance and technical tax measures (inheritance tax, tobacco duty, etc.) implemented immediately.
January 2026
New 40% First-Year Writing Down Allowance (a type of capital allowance that allows a business to deduct a percentage of the value of certain assets each year to reduce its taxable profits) for most “main rate expenditure” assets (not qualifying for full expensing).
February 2026
Alcohol duty rises by 3.66%.
April 2026
Two-child benefit cap scrapped – families can claim for all children.
Energy bills cut by ~£150 per household (removal of ECO levy).
Dividend tax rates rise:
Basic rate: 10.75% (from 8.75%)
Higher rate: 35.75% (from 33.75%).
Income tax thresholds freeze continues (extended until April 2031).
NIC thresholds frozen; Upper Earnings Limit remains £50,270.
Company car benefit charges increase by 1 percentage point.
Making Tax Digital for Income Tax Self-Assessment begins for self-employed and landlords.
Capital allowances changes:
Writing-down allowance cut (main rate: 18% → 14%; special rate: 6% → 3%).
CGT on Business Asset Disposal Relief rises to 18% (from 14%).
State pension increases by 4.8% under triple lock.
VCT tax relief reducing from 30% to 20%.
September 2026
End of 5p fuel duty cut; rates start reverting.
April 2027
Cash ISA allowance cut from £20,000 to £12,000.
Tax on savings interest rises:
Basic rate: 20% → 22%
Higher rate: 40% → 42%
Additional rate: 45% → 47%.
Inheritance Tax applies to pensions (included in estate valuation).
April 2028
Electric Vehicle mileage tax introduced:
3p per mile for EVs
1.5p per mile for plug-in hybrids.
High-value property surcharge (“mansion tax”):
£2,500/year for homes £2m–£2.5m
£2.5m-£3.5m
£3.5m-£5m
£7,500/year for homes over £5m.
April 2029
Salary sacrifice NIC cap introduced:
Only first £2,000 of pension contributions exempt from NICs.
April 2031
End of income tax and NIC threshold freeze (extended from previous 2028 deadline).
This article is for general information and does not constitute personal financial advice. If you’re unsure what’s best for you, seek independent financial advice.
