The Autumn Budget contained a number of tax changes that will affect businesses across many industries.
For people tax planning in Oswestry and Cheshire, these will directly impact investors, business owners and limited companies nationwide. If these include you, it is important to consider how you will be affected and what measures you should take to mitigate exposure and protect your financial and commercial interests.
In her statement, the Chancellor, Rachel Reeves, announced that dividend, property and savings income will be subject to a higher rate of taxation. Effective from April 2026, the ordinary rate for dividend income increases to 10.75% whilst the higher rate goes up to 35.75%. The additional rate remains unchanged at 39.35%. As of April 2027, tax rates for savings and property income will rise to 22% for the ordinary rate, 42% for the higher rate, and 47% for the additional rate.
Elsewhere, the government said it would bring unused pension funds into a person’s estate for inheritance tax liability. Tax relief is being halved on business sales to Employee Ownership Trusts, whilst access is being extended to the Enterprise Investment Scheme (EIS) and Enterprise Management Incentives (EMI). The government also confirmed that spouses will be able to transfer any unused £1 million allowances for agricultural property relief and business property relief.
Against this backdrop of tax changes coming in over the next two years, business owners are being urged to review income and IHT exposure, particularly if held assets exceed £325,000. It is also worth preparing an exit strategy if interested in an EOT, and ensuring any scheduled investments are timed to capitalise on enhanced reliefs.
