Autumn Budget 2025 – info from HMRC for employers Brief Summary EN/BG

📰 Autumn Budget 2025 – Key Measures for Employers

The Chancellor of the Exchequer, the Rt Hon Rachel Reeves MP, made the Autumn Budget 2025 . This information from HMRC provides details on key measures that may impact your business.

Income Tax and National Insurance

• Changes to tax rates for property, savings and dividend income (GOV.UK explainer)
  • Property Income: From 6 April 2027, separate income tax rates will be created for property income: 22% for basic rate, 43% for higher rate, and 47% for additional rate.
  • Savings Income: From 6 April 2027, the savings basic rate will increase to 22%, the higher rate to 42%, and the additional rate to 47%.
  • Dividends Rates: From 6 April 2026, the dividend ordinary rate will increase by 2% to 10.75%, and the dividend higher rate will increase by 2% to 35.75%. The additional rate will remain at 39.35%.
• Salary sacrifice reform for pension contributions (GOV.UK explainer)
  • From April 2029, the amount of salary an employee can sacrifice for pension contributions before attracting a National Insurance contributions (NICs) charge will be capped at £2,000 a year.
  • Contributions above this cap, if made through salary sacrifice, will be subject to employer and employee NICs.
  • Contributions through salary sacrifice will still be exempt from Income Tax, subject to usual limits.
• Voluntary National Insurance contributions (NICs) abroad (GOV.UK explainer)
  • From April 2026 for tax years 2026 to 2027 onwards, the option to pay voluntary Class 2 NICs for periods abroad will be removed.
  • New Class 3 NICs applications for periods abroad will require 10 years continuous UK residency or National Insurance contributions.
• Extend employer National Insurance contributions veteran's relief
  • The veteran's relief, introduced in April 2021, was due to end on 5 April 2026 but will be extended for a final two years, until the 2027 to 2028 tax year.
• Tax treatment of payments for cancelled shifts
  • Payments made for cancelled, moved or curtailed shifts under the Employment Rights Act 1996 are confirmed to be subject to Income Tax as earnings.
  • Subsequent NICs regulations will be made to confirm these payments will also be subject to NICS.

Benefits and Expenses

• Reporting benefits in kind in real-time
  • The mandatory reporting of Income Tax and Class 1A National Insurance contributions for most benefits in kind and taxable expenses takes effect from 6 April 2027.
  • HMRC has published draft guidance and legislation to help customers prepare.
• Non-reimbursed employment expenses for homeworking
  • New Income Tax and National Insurance exemptions were announced for the reimbursement of home working equipment and eye tests, and the provision and reimbursement of flu vaccinations.
  • This will take effect from 6 April 2026.
• Company car tax - Employee Car Ownership Schemes (ECOS)
  • The implementation of deeming vehicles provided through ECOS as taxable benefits has been delayed to 6 April 2030, with transitional arrangements until April 2031.

Compliance and Administration

• Informants reward scheme
  • A strengthened reward scheme has been launched for informants targeting serious non-compliance in cases over £1.5 million.
  • The scheme offers informants 15% to 30% of tax recovered, with rewards being uncapped and taxable.
• Increases to Corporation Tax late filing penalties
  • The penalty for taxpayers submitting a Corporation Tax return late will be doubled from 1 April 2026.
• Modernising digital outbound communication
  • From spring 2026, HMRC will gradually be able to operate a 'digital by default' model of outbound communication for new and existing customers using digital services.
  • Customers will be able to 'opt out' and digitally excluded customers will continue to receive paper communications.