The Autumn Budget delivered on 26 November 2025 didn’t introduce headline tax rate increases—but don’t be fooled. This was a budget built on fiscal drag, and its impact will be felt by small business owners for years.

Income tax and National Insurance thresholds were frozen until 2031, quietly pulling more people into higher tax bands as wages rise. At the same time, dividend tax rates will rise by 2% from April 2026, directly affecting owner‑managed businesses and contractors.

Investment income also came under pressure. Property, savings and dividends now face higher taxation, narrowing the gap between earned income and investment returns. Meanwhile, corporation tax rates stayed the same—but rising personal tax makes extraction planning more important than ever.

For accountants, this Budget reinforces the importance of proactive reviews. Salary/dividend splits that worked a few years ago may no longer be optimal. Pension planning, timing of dividends, and incorporation decisions all deserve fresh attention.

Key takeaway: Doing “the same as last year” could now be costing you money. Annual tax planning is no longer optional.