Key Takeaways from the 2025 Autumn Budget

UK Chancellor of the Exchequer Rachel Reeves delivered her 2025 Autumn Budget earlier today.

Our panel of specialists have reviewed the key announcements made, and provided their views on what the changes could mean for individuals, businesses, and the UK economy.

If you would like to discuss what today’s announcements might mean for you, or your business, please don’t hesitate to get in touch with any of the spokespeople directly, or your usual A&M contact.

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See the latest commentary from our team of tax experts on the UK Autumn Budget 2025 below:

Jack Hollyman on the Transaction Market and Investment Community:
The new stamp duty ‘holiday’ applies to new listings on the London Stock Exchange. Investors will be exempt from the 0.5% tax on purchasing shares of newly listed UK companies for up to three years post-IPO.

This change will be of interest to investment funds considering exits via UK listings, particularly noting that stamp duty on secondary sales on an IPO is often paid by the seller.

Rhys Owen on Funds and Carried Interest:
In the end, the budget wasn’t the nightmare that many alternative asset managers had feared. Notably, there are no National Insurance Contributions (NICs) on LLP profits, no exit taxes and no increase to the additional rate of income tax or capital gains tax.

However, there is still a lot of detail to work through in the many new tax measures, were announced both in the budget speech itself and the subsequent documents published online.

In terms of carried interest reform and the new rules coming in from 6 April 2026, there were no new developments today, but we have been informed that we can expect news next week on the outcome of the summer consultation on the draft legislation. Although these changes are expected to be minor technical changes, the continued uncertainty over this key area of taxation will be disappointing to many.

Prasam Patel on the Property Sector:
Another unwelcome change to the taxation of the property sector was introduced in the Budget. As one of the sectors that has undergone over a decade of largely negative tax changes, it was disappointing to see an additional 2% tax being levied on property income at the basic, higher and additional rates for individuals. Private landlords, many of whom make an economic loss due to limits on relief for financing, have been targeted yet again.

From a broader investment perspective, pending further detail, it seems likely that the 2% would also flow through to additional withholding tax on Property Income Distributions paid by REITs. This would impact those who invest via such vehicles as well as individuals getting exposure to property income via listed REITs.

Richard Olson on UK Equity and M&A Markets:
On current OBR projections, a balanced budget leaves UK borrowing broadly stable in the near term. Combined with steady inflation, this should give the Bank of England greater confidence to begin reducing rates, as already implied in forward curves. A clearer path for monetary policy will help to steady the cost of capital and, in turn, support confidence across UK equity and M&A markets.

Anthony Whatling on Employee Ownership Trusts:
Employee Ownership Trusts have long been sold as a 0% tax route for founders – but the reality is far less generous. When the trust eventually sells the shares, the proceeds paid to employees are taxed as income, not capital gains, meaning the effective tax rate is usually much higher than headline figures suggest.

These reforms risk making an already complex structure even less attractive. Founders are usually paid in installments because the trust rarely has the cash up front. Yet the Government now plans to halve the relief, leaving founders facing an effective tax rate of up to 12%.

It’s unclear when exactly this tax will fall due – even though many founders wait years before receiving their full proceeds. For entrepreneurs, these changes risk turning EOTs from a viable option into a far costlier and far riskier one.

Anthony Whatling on Entrepreneur Inflow:
For the people with the ability to impact growth - the entrepreneurs, founders and business owners who create jobs and investment - it’s hard to see what in this Budget says, ‘come to the UK and build’.

It was disappointing not to see any specific measures announced that would increase the flow of wealthy entrepreneurs to the UK. The four-year Foreign Income and Gains regime announced last year is too short to attract entrepreneurs to the UK, and the potential tail of inheritance tax exposure after people leave the UK is also a disincentive.

There is also the problem of a lack of visa routes to allow these individuals to settle here. Hopefully, the Chancellor can back up her commitment to entrepreneurs by looking at these shortfalls.

Louise Jenkins on Enterprise Management Incentives:
The reforms to EMI plans are a welcome strengthening of what is already regarded as the Rolls Royce of employee share option schemes in the market. Government expects around 1,800 additional companies to adopt EMI over the next five years, with roughly 70,000 employees set to benefit. The latest available data, for the 2023–24 tax year, shows an average grant value of around £12,340 per employee.

Louise Jenkins on Pension and National Insurance Contributions:
It’s reassuring that pension salary sacrifice will remain until 2029, but the plans beyond that are unnerving. Removing this relief above £2,000 creates a double-edged sword: disincentivising pension saving and increasing the cost of hiring, both of which run counter to the Government’s commitment to economic growth.

There is also the risk of creating clear anomalies at middle-income levels. Lower-paid employees stand to lose relief at 8% employee NIC, while higher earners will lose just 2%, meaning the impact is proportionally greater for those on lower incomes. If the Chancellor is serious about ensuring those with the broadest shoulders bear the greatest burden, this distortion will need to be addressed.

Mairéad Warren de Burca on Implementation of e-Invoicing:
The Chancellor’s decision to implement mandatory e-invoicing at this stage will catch many off guard. From April 2029, all businesses will be required to issue VAT invoices electronically, with a detailed roadmap expected next year. While the aim is to reduce fraud, improve compliance and give HMRC greater real-time oversight of transactions, the timing is the real surprise. Previous discussions with HMRC suggested a consultation would be the first step.

This represents a major change in both scale and pace. Many businesses will simply not have the systems or capacity in place to comply without significant investment. While e-invoicing is widely seen as inevitable - and has been successful elsewhere in the world and is being introduced more widely in Europe - several countries have already had to defer similar rollouts due to complexity. Whether the UK’s ambitious timetable proves achievable in practice remains to be seen.

Mairéad Warren de Burca on Customs Duty:
As expected, Rachel Reeves has confirmed plans to remove the low-value import threshold - though the timing remains unclear, with previous signals suggesting a phased approach or full implementation by 2029.

At present, goods imported from countries like China with a value under £135 are exempt from import duty. This has benefited fast-growing online retailers such as Temu and Shein, which ship large volumes of low-cost products directly to UK consumers.

Removing the exemption have a direct impact on prices. For example, a £10 T-shirt made in China will attract a 12% duty, increasing the retail price to around £11.20. A £100 pair of leather boots would incur £8 duty at an 8% rate. (However, it’s important to note that the change won’t affect imports from countries covered by the UK’s Developing Countries Trading Scheme - such as Bangladesh - or goods made within the EU, which remain duty-free.)

The measure is intended to level the playing field for domestic retailers competing with overseas e-commerce platforms, but it will inevitably add to consumer costs and increase administrative burdens for importers.

Marvin Rust on the UK Autumn Budget:
The scale and timing of the changes mean much of the adjustment is pushed into future years, which carries its own risks. The fall in ten-year yields is notable, for now, the Chancellor has managed to keep both Labour backbenchers and the bond market onside, a notable achievement in itself.

Marvin Rust on the National Living Wage:
The significant increases to the National Living Wage and National Minimum Wage will disproportionately punish the hospitality industry. With margins already so tight, and the public still not through the cost-of-living crisis, this only makes things harder. The real impact could be closures of businesses, a body blow for the industry which has historically been a first employer for those entering the workforce.

Marvin Rust on Business Rates:
On business rates, prima facie, news on the lower multiplier for hospitality is welcomed. However, although the Chancellor expects c.750k properties to benefit, the announced higher rate for properties worth over £500k suggests little meaningful relief for our larger owners and operators.

Marvin Rust on Tourist Tax:
We’d recommend Mayors in England think carefully before introducing any visitor levy on overnight accommodation. The industry simply cannot afford any actions that put people off our hotels.

Marvin Rust on Retail and Hospital Envoy:
The new Retail and Hospitality Envoy will have a lengthy to-do list to champion these businesses within government. We look forward to working alongside them to see hospitality finally recognised as a jewel in the UK’s crown.

Kathie Haunton on R&D Tax Incentives:
Earlier in the year, Rachel Reeves said ‘Britain is the home of science and technology’, so some may be disappointed as there was nothing announced to increase research and development tax incentives. The wait continues to see how effectively the Advanced Assurance regime will improve the administration of the scheme.

Erin Brookes on Whole Retail Sector & ‘Golden Quarter’:
While Budget uncertainty was a major driver of falling consumer confidence in November, today’s announcements won’t reverse this overnight. Household budgets are still under pressure, and shoppers are deferring spending, particularly on 'big ticket' items. We expect consumers will continue to adopt a ‘wait and see’ approach as the real impacts of Budget measures feed through in the months ahead.

For retailers, that means visibility on forward demand is still limited, complicating inventory planning and squeezing margins. The timing of the Budget could not have been worse, ahead of the all-important Black Friday weekend. While well planned Black Friday promotions should allow some retailers to build momentum, particularly in categories like electricals and technology, there is evidence of heavy discounting to shift clothing volumes due to a weaker start to Autumn-Winter.

Brands and operators with disciplined stock management, strong value credentials and the ability to flex promotions without undermining margin will fare the best over the festive season, as well as those with appealing in-store propositions.

Erin Brookes on Minimum Wage Rise:
Following the increase of employer National Insurance contributions in the last Budget, it is alarming to see the lower employee count in the retail sector, which will no doubt increase further with the introduction of higher minimum wage in April.

While this is positive for workers, freezing income tax thresholds will reduce the spending power of many. Looking ahead, retailers will be laser-focused on maintaining margins. With margins squeezed, we expect to see cost and efficiency savings in other areas, such as more streamlined ranges, increased investment in self-checkout, and scrutiny on costs across SG&A and cost of goods.

Erin Brookes on Supermarkets:
The Chancellor’s last-minute U-turn on business rates heaps further pressure on UK supermarkets, with grocers continuing to shoulder a disproportionate burden of this tax. The rise in the living wage and stubborn food inflation, in addition to higher National Insurance from the last Budget, means costs continue to mount for supermarkets, where margins are already slim.

Today’s news means that grocers will be constrained in the investment decisions they make, in improving store estates, sustainability and modernising their operations. At a time when household budgets are also stretched, this change further reduces headroom to keep prices down for customers.

The sector accepts that it must contribute fairly, but the balance is wrong, with potentially significant knock-on effects on the wider economy.

Alexander Marcham on Council Tax:
Current Council Tax bandings are still based on 1991 values, which often bear little resemblance to today’s market. Delivering this reform as planned would effectively require a full revaluation of every property in the country to 2026 levels – a huge administrative task that likely explains why implementation has been pushed to 2028.

Even the OBR acknowledges the risk of widespread behavioural responses and a flood of appeals. One local council officer recently told me that a surge in appeals at this scale could ‘break the national valuation system’ - and that risk cannot be taken lightly. For a government seeking growth, a policy that could overwhelm the valuation system and further freeze a fragile housing market looks like a very high price for very limited gain.

Steve Smith on Capital Allowance:
The Chancellor described private investment as the lifeblood of economic growth, yet the capital allowances changes in this Budget risk pulling in the opposite direction. The slowing of the main rate from 18% to 14% sends out the wrong message when investment in our capital asset base is required for the increase productivity the Chancellor craves. I expect the changes to dampen business investment at a time when firms need certainty and incentives to commit long-term capital.

The extension of the First Year Allowance to leased assets is a sensible improvement, but it falls short of what was needed. Removing the restriction altogether and allowing leased assets to qualify for Full Expensing would have provided a much stronger signal to investor.

Marvin Rust on Fuel Duty and Road Charging:
Electric vehicles have long benefited from favourable tax treatment. For example, zero fuel duty and lower road charges, to encourage uptake. But with EV numbers rising sharply, Treasury officials appear increasingly concerned about a growing ‘tax gap’.

The Chancellor seems set to begin closing it, reportedly considering an annual road charging system for EVs, around 3p per mile. It’s a move that would signal the end of a tax-free era for electric motorists. The EV sector will be disappointed, with many hoping for a cut in VAT on public charging from 20% to 5% to match the rate for home charging.

The bigger question, however, remains fuel duty itself. The 5p cut introduced in 2022 remains in place, and overall rates haven’t risen since 2011. Reversing that decision could boost revenues but at a steep political cost amid ongoing cost-of-living pressures.

Marvin Rust on Council Tax Revaluation:
Rather than introducing a new wealth tax, the Chancellor may instead adjust the council tax system to raise more from high-value properties. Such a move would be politically sensitive in practice - particularly in London, a traditional Labour stronghold.

Marvin Rust on National Insurance on Pension Contributions:
Expectations are that Rachel Reeves will introduce National Insurance on pension contributions from both employees and employers, using a sliding scale designed to raise around £2 billion a year. Contributions above £2,000 annually would attract an 8 per cent charge up to £50,000 and 2 per cent beyond that, a significant blow for higher earners and their employers alike.

Marvin Rust on Income Tax Thresholds:
The freeze on income tax thresholds looks set to continue for at least another two years. It’s a stealth revenue raiser – estimated at around £8bn – but one that will bring more people into higher tax bands. A policy once seen as ‘unfair’ by the Labour Party when Sunak introduced it may now be seen as unavoidable given the fiscal headroom challenge.