Autumn Budget 2025

On 26 November 2025, Chancellor of the Exchequer, Rachel Reeves, presented the Autumn Budget.  

See the Budget 2025 Policy Paper here.

See all the Budget documents here.

Some of the key employment tax announcements are;

Minimum Wage hourly rates from April 2026

Dividends

There will be a 2% increase to the basic and higher rates of tax on dividends, raising them from;

• 8.75% to 10.75% and
• 33.75% to 35.75%

Personal tax thresholds frozen until April 2028

The freezing of thresholds already in place (see our news from the 2024 Budget here) will be for a further three years from April 2028 to April 2031.

Salary sacrifice for pensions

Government is changing how salary sacrifice for pension contributions works. From April 2029, the amount that is exempt from National Insurance contributions (NICs) will be capped at £2,000 a year for employee contributions made via salary sacrifice.

Construction Industry Scheme

Government will strengthen HMRC powers to tackle fraud and will also launch a technical consultation to simplify and prove the administration of the scheme (to take effect from 6 April 2026).

E-invoicing

From April 2029 all VAT invoices will need to be issued in a specific electronic format. An implementation roadmap will be published at Budget 2026.

Non-compete clauses in employment contracts

Non-compete clauses are inserted into employment contracts to restrict an individual’s ability to work for, or establish, a competing business after they have moved on from a job. 

The government is interested in views on different options to reform non-compete clauses in employment contracts – see the working paper here.

Employee Expenses – Working From Home

From April 2026 the Income Tax deduction for working from home expenses which are not reimbursed will be removed.  Where an employer reimburses the expenses incurred, an Income Tax and NIC deduction will still apply.