Chancellor Rachel Reeves delivered a heavily anticipated Autumn Statement today, framed around “fair and necessary choices” to stabilise the UK’s finances. Rather than opting for headline tax rises, the government’s strategy centred on freezes, delayed increases, and structural changes that will gradually widen the tax net.
A Budget of Stealth Measures
The Chancellor abandoned plans for a major income tax rise. Instead, income tax and National Insurance thresholds will remain frozen until April 2031.
While this avoids immediate tax shock, it increases fiscal drag: as wages rise with inflation, more earners will enter tax bands or move into higher rates.
Dividend, property, and savings income will see targeted increases:
- Dividend tax rates rise 2 percentage points from 6 April 2026
- Property rental and savings income rise 2 percentage points from April 2027
This signals a deliberate move toward taxing passive and investment income more sharply.
Business Costs Continue to Rise
Businesses will face higher wage obligations from April 2026, with the National Minimum Wage increasing from £12.21 to £12.71 per hour for over-21s (with further increases for under-21s).
Employer National Insurance thresholds remain frozen at 15% with a secondary threshold of £5,000 until April 2030.
Corporation tax remains at 25% for profits above £250,000, with marginal relief below this level.
While headline rates are stable, frozen thresholds mean labour and compliance costs will rise in real terms.
Umbrella Workers & Labour Supply Chains
The government continues its crackdown on non-compliance in contractor pay models:
From April 2026, Joint and Several Liability rules will allow HMRC to pursue recruitment agencies or end clients if umbrella companies fail to pay correct PAYE or NI.
For compliant businesses and contractors, this creates a competitive advantage. Brookson, as a founding member of the FCSA with nearly 20 years’ experience, continues to provide reassurance on HMRC compliance for partners and workers.
Pensions & Tax Relief
One of the most notable long-term changes:
- Salary-sacrificed pension contributions above £2,000 will lose National Insurance exemption from April 2029, though tax relief remains.
The move reduces the efficiency of salary sacrifice for higher earners and umbrella workers. There remains a strong incentive to contribute, especially given the £60,000 annual pension allowance and the abolition of the lifetime cap.
Wealth & Estate Planning
- Capital gains and inheritance tax rates remain unchanged, but frozen allowances until 2030 have the same effect as a real-term increase.
- From April 2027, unspent pension pots will fall within IHT, changing long-standing pension-based wealth transfer strategies.
IR35 and VAT: Stability, Not Reform
- IR35 rules from 2017 and 2021 remain in force, with end clients responsible for status determinations in the public and medium/large private sectors.
- VAT thresholds remain fixed: £90,000 registration, £88,000 de-registration.
Static thresholds mean growing businesses could be drawn into compulsory VAT registration unless careful planning is applied.
What Should You Do Next?
With so many frozen thresholds and staggered increases, the Autumn Statement may appear subtle, but its long-term effects are anything but.
Fiscal drag, increased dividend taxation, and pension changes mean both workers and business owners need to actively manage their tax exposure to avoid losing income to slow-burning structural increases.
Brookson can help you:
- Optimise company tax planning
- Navigate umbrella compliance
- Protect profit margins and VAT positioning
- Structure pension contributions
- Prepare for IR35 and IHT implications
In an environment where “no changes” often means more people quietly paying more, planning early makes all the difference.
