Latest News and Events

Stirring the Budget Pot

So now we know! The months of leaks, briefings, and kite flying are over and The Chancellor, Rachel Reeves, has delivered her 2025 Budget. With the Office for Budget Responsibility (OBR) releasing its budget documents in error before the Chancellor had even risen to her feet, in the end this was one of the least surprising budgets of all time. So much so that the Deputy Speaker of the House of Commons even took the time to censure the Government ahead of the budget speech, commenting that the run up to the budget fell short of the standards which The House expects.

One of the headlines from the OBR document was a greater than expected growth level of 1.5% this year; albeit this was offset by continuing low levels of productivity. In a bid to further kickstart the economy, The Chancellor announced a number of infrastructure and other projects alongside reforms to the Research & Development incentive scheme. Business rates are also in for a shake up with continuing support for retail, development and leisure businesses, offset by higher charges for larger premises such as warehouses used by large online retailers.

When it comes to personal taxation The Chancellor announced a number of changes. Key amongst these are:

• The freeze on Personal tax and national insurance thresholds which was already due to last until 2028 is to be extended a further three years to 2031.
  
• The tax on dividend and savings income to be increased by 2%, with the starting rate of savings limit staying at £5,000 until April 2031.
  
• Property income, such as that received by landlords is to be taxed at 22% for lower and 47% for higher earners.
  
• As expected, an additional charge is to be applied to higher value properties with a £2500 per year charge for those valued in excess of £2million and £7500 for those valued in excess of £5million. This will apply from April 2028.
• Salary sacrifice schemes are to be shaken up with effect from April 2029 with a £2000 per year limit being put in place, over which the amount sacrificed will be subject to employer and employee national insurance charges.
  
• The ISA limit is to remain at £20,000 per year per person but from April 2027 there will be a limit of £12,000 on cash ISA investments for all those aged under 65. A consultation on Lifetime ISAs is due to conclude in April 2026.
  
• For drivers, fuel duty will be frozen until September 2026 with increases then being phased in. Drivers of electric vehicles will also face a 3p per mile charge with effect from April 2028 whilst drives of hybrid vehicles will face a 1.5p per mile charge from the same date.
  

Other measures include changes to gambling and alcohol duties, and the abolition of the two-child benefit cap. As with all budgets the devil is in the detail and our investment committee will be scrutinising the fine print as it is released in the coming days to assess the potential impact on investments.