As well as other measures on property and pensions which we’ve covered separately here on IFA Magazine, Chancellor Rachel Reeves has announced her ‘smorgasbord’ of Budget measures to the Commons, albeit after the OBR embarrassingly leaked their report out early giving everyone chance to see what was in the statement – all before Reeves even stood up!
Following weeks of speculation, advisers now have the definitive budget measures to hand and can start to proactively plan with clients in order to ensure that their long term plans are effectively being managed.
These measures have impacts on advisers’ clients as well as businesses’ overall financial health.
You can check out all the budget analysis, news and views on all measures relevant to advisers here on our dedicated Autumn Budget category
Experts from across the industry and from legal and accountancy professions too, have been sharing their reaction to today’s Budget taxation measures how they impact overall taxation as follows:
Musa Sabo, Director at Andersen LLP, said:
“With the tax burden reaching record highs, the chancellor has effectively broken her manifesto promise not to increase the burden on ‘working people’.
“Reeves’ extension of stealth taxes is one of the most regressive ways she could increase tax revenues, hitting workers on lower salaries harder than anybody else.”
Julia Cox, Partner, Charles Russell Speechlys said: “Despite significant concerns around CGT and IHT rising, this bit of the fiscal “pick and mix” shop remains relatively vanilla with few changes to what we knew already, as the Chancellor clearly got the “bad news” out in her first Budget last year. While this one unhelpfully saw no relaxation of the first’s significant limits to IHT relief for the interests of private business owners and farmers from next April, there were no IHT “bombshells” about which there had been much chatter prior to the Budget. The IHT nil rate band is frozen until April 2031, so fiscal drag applies here as much as in the context of frozen income tax thresholds, applying to rising capital values. A notoriously unpopular tax is IHT, affecting only a small number of estates, but more will now pay it. While there has been no increase to CGT, time is of the essence ahead of next April to take steps to mitigate the restrictions to business and agricultural property relief, especially in terms of use of trusts in succession plans.”
Reacting the freezing of income tax thresholds, Benjamin Craig, Associate Director at Ayming UK, said:
“Freezing income tax thresholds is, in practice, a stealth tax that undermines Labour’s manifesto pledges – no matter how the Chancellor chooses to dress it up. And the fact that the government has allowed such intense speculation to build in the first place is telling. It points to an administration constrained by overly rigid fiscal rules and struggling to outline a clear, credible economic plan – and that uncertainty erodes business confidence.
“Stability and certainty are the foundations for innovation. The government deserves credit for its Corporate Tax Roadmap and commitments around the R&D tax relief scheme, but when policymakers appear willing to flirt with reversing course on something as fundamental as income tax, it inevitably raises questions about how firm those other pledges really are.
“With tariffs, inflation and geopolitical volatility already clouding the outlook, businesses need assurances that policy won’t change on a whim. Failing to provide that certainty risks freezing investment and stalling growth before it starts.”
Lucy Coutts, Investment Director at JM Finn said:
“While the pay per mile scheme addresses the loss of fuel duty revenue amid rising EV adoption, it risks discouraging those who were motivated by low running costs and we may see reduced demand growth in the short term. Higher priced, longer-range models and brands most dependent on business or high-mileage personal drivers will be most affected (such as Tesla, BMW, Mercedes and Audi) while makers of economical, low range city electric cars are likely to grow their market share (such as Renault, Peugeot, Citroen and Fiat). On balance, the pay per mile scheme will have little effect in the long term transition to EVs, as the car makers adapt their product strategies to protect consumer demand and margin.”
Commenting on the Budget and inheritance tax planning pushing IFAs towards BR, gifting, or trust-based alternatives, Nick Jones, Head of Business Development at Ingenious, said: “The Budget reinforces that inheritance tax planning remains a pressing issue for many families. With the IHT threshold frozen until 2031, more estates will be drawn into the tax net, making tax-efficient investments increasingly relevant. The confirmation that the £1 million Business Relief allowance is fully transferable between spouses is welcome news however, allowing couples to now shield up to £2 million in BR-qualifying assets. The lack of change to the planned 2027 pension IHT treatment means advisers may need to revisit strategies and consider BR, gifting, or trust-based alternatives.”
Martin Muhleder, Tax Partner at Vialto Partners, said:
“While the Government has avoided an overt income tax hike for now, it has heaped a new level of complexity onto the UK’s tax system, through a smorgasbord of stealth taxes. In practice, not only will these policies be very hard to implement, but they will also negatively impact business confidence and further depress domestic economic activity. They will also create scenarios where individuals who are in near identical financial positions will end up in very different tax rates. Creating this disparity is not good for the long-term fairness of the UK tax system”
“At a time when the Government should be encouraging and fostering growth, through a series of flip-flops and backpedaling, it may just succeed at achieving the opposite effect. Employers should feel confident operating in the UK; adding more complexity and red tape to the system won’t help this systemic issue.”
Rob Hillock, Head of Personal Financial Planning Broadstone, said:
“The renewed freeze on personal allowances will drive significant tax revenues for the Chancellor but ultimately see even more workers – and indeed pensioners – tip into the tax system or onto higher rates.
“This is a significant stealth tax on households and places additional strain on working families already facing higher living costs. The quiet expansion of the tax base will feel increasingly painful for households under pressure.”
Tom Margesson, Tax Partner, at Travers Smith comments:
“Asset managers will breathe a sigh of relief that today’s Budget hasn’t introduced an exit tax – something which had been the subject of much recent speculation. Following hot on the heels of the abolition of the non-dom regime, it would have been a hammer blow to the UK’s appeal to internationally mobile executives. In the weeks building up to the Budget, we were already seeing clients weighing up and, in some cases, making moves to jurisdictions with more favourable tax regimes. Introducing an exit tax could have supercharged that exodus, and, made it less likely that that wealth creators would locate here in the first place.”
Dave Harris, CEO at more2life, said:
“Older homeowners will be feeling the pinch from this Budget, irrespective of the benefits of the Triple Lock on their State Pension. Extending the freeze on tax thresholds will drag greater numbers into paying more tax to the Treasury, with more pensioners paying Income Tax on their pension payments, while there is a bigger chance now that homeowners will see expected house price growth pushing their estates into the area of Inheritance Tax payments.
“Couple that with the introduction of the new Council Tax surcharge on high-value properties, and it’s inevitable there will be real concern amongst older homeowners about how best to handle their increased outgoings on tax. Being able to tap into their most valuable asset – their home – is only going to become more important due to these rising costs, and we need to ensure they are signposted effectively to advisers so they can get the professional support they need.
“The good news here is the later life lending market has evolved significantly, with a wider choice of flexible product options available which can be tailored to match the older homeowner’s circumstances. This Budget, and the specific impact it will have on older borrowers, should serve as a prompt for advisers to communicate with their client base, and ensure they are presented with the full range of potential solutions, rather than a narrow selection of mainstream options.”
Charlotte Kennedy, Chartered Financial Planner at Rathbones, said:
“Extending the freeze on thresholds, one year more than expected, is the government’s main lever to plug the multi-billion-pound fiscal gap. But this stealth tax quietly squeezes household budgets, dragging more people into higher tax bands even though their real purchasing power hasn’t improved.
“Fiscal drag means a bigger slice of any pay rise lost to tax, which could discourage promotions or overtime. Our calculations show that extending the freeze until 2030 means someone earning £100k today would pay an extra £4,043 in tax, compared with £2,517 if the policy ends in April 2028 – this will be even more with the freeze lasting until 2030/31.
“By reducing disposable income, fiscal drag weakens consumer spending – a key driver of growth – and could in turn exacerbate the UK’s already sluggish recovery. You can soften the blow by lowering taxable income through salary sacrifice, extra pension contributions, or charitable donations. But make no mistake: fiscal drag is a regressive move that dents growth at a time when many households need relief, not hidden hikes.”
Rachael Griffin, tax and financial planning expert at Quilter, said:
“The Chancellor has extended the freeze on inheritance tax thresholds for a further year to 2030-31, at which point the government will rake in a whopping £14.5 billion per year from grieving families.
“Inheritance tax is one of the UK’s most hated taxes. What was once a tax on only the wealthiest families will increasingly impact those with even relatively modest estates, who after a decade of frozen thresholds alongside rising house prices, will be snagged by the tax. Add to that the significant changes coming in April 2027, when pensions will be drawn into taxable estates, and the government looks set to cash in on an ever-expanding pool of taxpayers.
“Alongside the freeze on thresholds, inheritance tax free allowances have also been frozen until 2030-31. While they won’t be getting any more generous, maximising every available allowance will be vital for families looking to ensure they pass on as much of their wealth as possible, while leaving as little as possible in the hands of the taxman. Inheritance tax can be complex, so understanding how to manage your money in the most tax efficiently as possible will be key. Families must take action now to get ahead of the changes, and seeking professional financial advice wherever possible will be vital.”
Steven Cameron, Pensions Director at Aegon, said:
“Extending the freeze to 2031 is a major blow for taxpayers. It means thresholds will have been fixed for an astonishing nine years, pulling millions more into paying tax, or paying at a higher rate. By stealth, this increases the tax burden albeit without any actual rise in headline rates.
“OBR projections were already predicting that by 2028, millions more would be paying income tax, with significant growth in higher and additional rate taxpayers. The 3-year extension will add further millions to this. For those moving into higher tax bands, paying extra income into a pension could soften the blow by securing 40% tax relief.
“Surprisingly, the Chancellor has said those with only the old or new state pension will not be subject to income tax even if their income exceeds the frozen personal allowance. From April 2027, the full new state pension will be at least £12,861, exceeding the £12,570 allowance, which would otherwise have triggered a tax charge of at least £58 a year.
“The extended freeze means both the excess and the potential tax bill would have risen annually, which would have been perceived as the government giving with one hand and taking with the other. By 2030/31 the tax bill might have risen to over £500 per year. It’s very welcome that the Chancellor has confirmed state pensioners with no other income will not face a tax charge even if their income exceeds the frozen thresholds.”
Emily O’Donnell, Partner in the private client team at Birketts LLP said:
“It was disappointing but not unexpected that the Budget didn’t alter the proposed cap to APR/BPR. However, it did introduce a small concession – the £1 million APR/BPR allowance will now be transferable between spouses. This is welcome news and perhaps gives more opportunities to manage succession before the rules change in April 2026.”
Andrew Tully, Technical Director at Nucleus said:
“These changes will drive changes to behaviour. Small business owners may want to reconsider how best to extract money from their business and the balance between salary, dividends and pension contributions. For savings it highlights the importance of using tax efficient wrappers such as ISAs, pensions and investment bonds.”
Alex Ranahan, Tax Reporting Analyst at Financial Software Ltd (FSL), said:
“The capital gains tax change revealed in the accidental OBR leak was employee ownership trusts (EOT). An EOT is a way for employees to share in ownership of a company. For the EOT to take effect, the owner must transfer their shares into the EOT. Ordinary principles of CGT would say this is a chargeable disposal, but a 100% relief is given provided that various conditions are met. The Budget puts in place an immediate reduction in the tax relief to 50%. The policy intent here is odd given one would expect employee ownership to be important to the labour and co-operative movements, and the forecast revenue raised is also only £0.9bn per year. Really, this just means that fewer company owners may try the EOT model, and that those who do will enjoy less tax relief – perhaps the government’s thinking is the current setup is too generous?”
Justin Arnesan, principal, EAP Innovation Funding at Ryan said:
: “Chancellor Rachel Reeves says the government wants to make the UK the best place in the world for businesses. As part of this, she announced a three-year stamp duty exemption for investors in companies that choose to list on the London Stock Exchange, a welcome step to support the City and encourage new listings.
However, her broader growth strategy continues to rely heavily on infrastructure investment, an approach that has struggled to deliver the expected results in the past. It remains to be seen whether this time the strategy will be more effective or if businesses will need additional measures to drive sustainable growth.”
Steve Smith, Managing Director at Alvarez & Marsal Tax, said:
“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 Full 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 fully for expensing would have provided a much stronger signal to investors.”
Shaun Moore, tax and financial planning expert at Quilter: “Increasing property, savings and dividend tax rates is a step in the wrong direction, although not unsurprising given the current fiscal trajectory. Many more people will now pay higher rates of tax, adding yet another hurdle to long-term saving and making it harder for investors to build diversified portfolios. Small business owners and landlords operating through companies will also see clear rises in their tax bills.
What is particularly striking is that savings tax applies at your marginal rate, meaning these increases will hit hardest for those already paying higher or additional rates of income tax. This creates a disincentive for prudent savers and undermines the principle of rewarding financial resilience. Meanwhile, the personal savings allowance has remained static, meaning more savers will be caught by these higher rates. Especially as more and more people become higher rate taxpayers and therefore only get a £500 allowance rather than the £1,000 that basic rate taxpayers get.
Freedom of Information data obtained by Quilter shows the scale of this shift: the number of dividend taxpayers has surged from 1.9 million in 2022/23 to nearly 3.7 million in 2024/25. Many of these individuals will now be dragged into self-assessment for the first time, adding complexity and stress to the process of investing and paying more tax. Combined with the slashing of the dividend allowance to just £500 previously, these higher rates make dividend taxation increasingly punitive for investors and small business owners.
While this may raise revenue in the short term, it erodes confidence and consistency, the very qualities needed to help people invest for their future. Policy should be focused on encouraging saving and investment, not making it harder. The reduction of the cash ISA limit to £12,000 further compounds the challenge, limiting the ability to shelter savings from tax. That said, ISAs remain one of the most attractive options for tax efficiency, so for anyone concerned about these increases it is crucial to make full use of allowances and consider strategies to mitigate exposure.
Angela Madden, Chair of the WASPI Campaign said:
“Another year. Another budget. And another let down for WASPI women. The government has had to admit defeat on a key part of the legal challenge against them, conceding their decision not to compensate 1950s-born women was incorrect.
“They cannot continue to stick their heads in the sand on this in perpetuity. Today must be the last fiscal event at which justice for the appalling treatment of WASPI women is left – again – on the backburner.”
Mark Smith, Managing Director at Ayming UK, said:
“Reforms to business rates are welcome, but for many firms they will feel too little, too late. Sixteen months into this government, and the final Industrial Strategy Sector Plans have only just been published – a sign that the pace, clarity, and ambition needed for UK businesses to compete globally simply haven’t been present. Today’s measures don’t change the underlying issue: this stop–start approach to investment is leaving UK innovators in limbo.”
“The UK has world-class innovators and proven growth engines across advanced manufacturing, clean energy, and professional services, but these sectors need sustained investment and long-term confidence to thrive. Industrial decarbonisation is a prime example: exceptional talent and cutting-edge technology are being developed here, yet without renewed focus and momentum, we risk losing our early advantage.”
“Every other major economy is taking bold, calculated risks; if we want to compete, the government must start doing the same.”
Nikki Lidster, Head of SME at Zurich, said:
“Whilst today’s announcement will land in 2029, the prospect of paying national insurance on employer pension contributions for the country’s SMEs will force some businesses to look at how they can improve efficiencies and costs. As the increases announced in the 2024 Budget are just starting to feed through to their balance sheets, one of the key catalysts pushing insolvencies to a 30-year high, so planning ahead will be crucial for businesses across the country. This, coupled with mounting supply chain costs and ongoing cost-of-living increases, continues to weigh heavily on consumer confidence. This is a challenging time for small business owners across the UK.
“We welcome the changes to the enterprise incentives schemes to encourage more businesses to build in the UK, but the UK’s uncertain economic landscape means SMEs may struggle to absorb another wave of cost pressures without drastic measures, including scaled-back investments or staffing cuts. Weaker consumer confidence and muted economic growth will only add to their woes. These increases will continue to deepen the strain, forcing firms to juggle immediate pressures against the need for long-term resilience. Strategic planning and careful cash-flow management have never been more critical for Britain’s small business backbone.”
James Burgess, Head of Commercial and Insolvency expert at Atradius UK, says:
“Personal tax changes, including freezing all personal income tax thresholds until 2030-31, will potentially curb spending and weaken demand, further pressuring business revenues at a time when businesses are already stretched by weak demand and high costs.
Companies should act quickly to protect their working capital – tightening credit control, reviewing payment terms, and leverage trade credit insurance to safeguard against defaults in an uncertain trading landscape.
Our latest Resilience Gap Report shows how far emergency cash reserves have already been eroded by rising risks, underlining that higher tax burdens may hit firms at a moment when their financial buffers are at their weakest.”
Alexander Marcham, Managing Director at Alvarez & Marsal Tax, said:
“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.”
James Barrie, Wealth Manager at W1M, said:
“While the bond markets might be happier with the increase in fiscal headroom, there’s a lot in this Budget that will squeeze people with investment income. If you are a landlord, have considerable savings or receive income from share dividends or bonds, your taxes are going up. People who make use of salary sacrifice to save for their retirement, or own a house in London have also been hit pretty hard today.
“In terms of wider implications, pensions will look less and less attractive as a long-term savings vehicle for our clients and many others, and people owning higher-value properties will be as concerned about the direction of travel as any immediate impact from today’s measures. While the Chancellor might have placated the bond markets for now, and the OBR does not predict a further exodus of HNW individuals, the longer-term impact of these measures on the UK’s attractiveness to wealth creators remains to be seen.”
Michael Carter, Partner, Osborne Clarke, said:
“Some very good news today is the expansion of EMI schemes, which remains one of the most effective tools for attracting and keeping talent. Up until now, companies that had more than 250 employees and/or gross assets of over £30 million were excluded from benefiting from EMI. With effective from 6 April 2026, these limits will be increased to 500 employees and £120 million respectively, significantly increasing the number of growing companies that can benefit from this vital incentive,”
“Since the 2014 reforms, around 1,000 companies have moved to employee ownership. These latest changes risk undermining that progress by making the model less attractive and potentially discouraging shareholders from selling their businesses to their employees.”
“Charging NICs on salary-sacrificed pension contributions is clearly a significant revenue-raising measure – the OBR expects it to generate around £4.7bn by 2029/30, far more than many other headline changes. Whilst the move delivers short-term fiscal benefit, it also raises a broader question about how measures of this scale may influence long-term saving behaviour and retirement planning. Ensuring that short-term revenue priorities do not inadvertently discourage future pension saving will be an important balance for policymakers to strike.”
Martin Jacob, Professor of Accounting and Control at IESE Business School, said:
“The Chancellor’s approach reflects an incoherent strategy. If taxes are to be raised to cut the deficit, that’s fine, but it is more effective to use existing taxes than to increase the complexity of the tax system. Raising taxes like this is a highly inefficient way of running the government, and it is very costly for taxpayers. Such compliance costs cut directly into economic growth.”
Duncan Johnson, CEO of Northern Gritstone, said:
“Entrepreneurs’ Relief was the best tax regime I’ve seen implemented by a Labour Government. It supported the innovation economy, and the benefits were capped at a sensible level. With constant changes since it was first introduced, the scheme is no longer fit for purpose, and I would have liked to see the policy reset today, so it can go back to what it was meant to do: help and encourage entrepreneurs.”
Jason Piper, Head of Tax and Business Law at ACCA said:
“The announcement of further powers for HMRC to crack down on tax avoidance schemes should be a positive step forward to combatting fraud and abuse of the tax system. We and other stakeholders have been pleased to engage with HMRC trying to design these so that they work as well as possible and without unintended side effects. However, getting the measures right takes time and effort, and must go hand in hand with dedicated investment in HMRC upskilling and investment in its software.”
Anthony Whatling, Managing Director at Alvarez & Marsal Tax said:
“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 instalments 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.”
Tom Shave, President of European and Asia-Pacific operations at global tax services firm, Ryan said:
“Targeting fraudulent businesses and giving HMRC stronger compliance powers is the right focus, but the real test will be in delivery. The Budget includes a wide-ranging package of administration, compliance, and debt-collection measures, estimated to raise £2.3bn by 2029-30. These measures aim to tackle the tax gap, from multinational transfer pricing to fraud in construction, building on recent recoveries of unpaid taxes.
“The key question is whether these measures will actually deliver. Historically, enforcement initiatives rarely raise the full amounts projected, so businesses will be watching closely for clarity on implementation and to ensure legitimate companies are not unduly burdened while the system focuses on the bad actors.”
James Woodfall, founder of Raise Your EI, said:
“Whilst the uncertainty around what might be in the Budget is over, questions about the implications are just beginning. The new council tax surcharge stands out, as it’s a wealth tax by another name. Clients with properties likely affected will turn their attention to the valuation process, the likely impact on house prices, and questions from the asset-rich/cash-poor about how they will afford the surcharge. More money anxiety to come here.
Rachel Reeves has seemed to keep a promise of not taxing ‘hard working people’, but clearly doesn’t count savers, business owners or landlords amongst the category of ‘hard working people’. Clearly, anyone who has a business, saves diligently, invests wisely or provides a service to the rental sector is lazy and deserving of a tax hike. That notion could anger a lot of clients, and many advisers themselves.
Some may be wondering how the very generous state pension increase was given, and that may frustrate the nation, especially when many are dealing with a high inflation rate compared to other countries and years of below-inflation wage rises.
In summary, we can expect more anxiety over property, mixed with anger and frustration for many clients.”
Nigel Holmes, Director of R&D at Ryan said:
“We welcome the government’s announcement of a targeted advance assurance service for R&D tax relief. This initiative could provide much-needed clarity for small and medium-sized businesses navigating complex R&D tax relief claims.
However, the success of this service will depend entirely on the quality of its implementation. It is crucial that HMRC staff are fully trained to understand R&D tax relief and its nuances. Without this foundation, even the best-intentioned service risks creating more confusion rather than the clarity businesses desperately need. It must not repeat the failings of the past.”
Rob Clifford, Chief Executive at Stonebridge, said:
“While ministers may avoid calling it one, this proposal amounts to a wealth tax on higher-value homes. It feels like a short-term revenue-raising measure designed to plug a fiscal gap, rather than a considered reform of an outdated system.
“Few would dispute that owners of more valuable properties should contribute more. The issue is the way the government has chosen to approach it. A more sensible long-term and fairer solution would be to reform the whole system, rather than layering on more complexity.
“As things stand, this change offers little benefit to anyone. Households in higher-value homes will pay more, yet those at the lower end see no relief. It will also likely cause market distortions around the £2m threshold Ultimately, the UK needs a long-term approach to property taxation – one that modernises the system rather than relying on short-term fixes.”
Sarah Jordan, Real Estate, Landed Estates and Farming, Rural Services, Moore Barlow, said:
“Following today’s Budget, farmers will be disappointed that the level of APR and BPR hasn’t been increased from decisions made last year, and 100% relief will be capped at £1m still, and relief at 50% thereafter. However, on a more positive note, it’s good news that the 100% relief can be transferred between spouses, enabling £2m to be rolled over and applied on second death. Also, no changes so far as we can see that have been made to rules of lifetime gifting including the availability of holdover relief for CGT purposes.”
Simon Harrington, Head of Regulatory Policy and Compliance at PIMFA said:
“It is regrettable that the Chancellor continues to draw an arbitrary distinction between working people and the wealthy. Whilst we welcome some of the reforms she has announced in today’s Budget – specifically the 3 year UK listings relief exemption – broader moves to boost the UK’s retail investing culture seem to be in direct conflict with the dividend tax increases announced, as well as changes to salary sacrifice. Whilst the Chancellor may see salary sacrifice as a cost to the Exchequer, it is, and will remain, a way for people to build wealth to support them in retirement.
“We recognise the government’s difficult economic inheritance, and the choices that need to be made to address this. But going forward, to build a culture of investment in the UK a period of stability in personal taxation is urgently needed.”
Will Hale, CEO of Key Advice & Air, said:
“The Chancellor’s Mansion Tax, the High Value Council Tax Surcharge (HVCTS) proposal underlines the importance of property wealth to the UK economy and demonstrates how homeowners need to focus on the role of accumulated home equity in their wealth and estate planning and the need for specialist advice.
“Initially under the High Value Council Tax Surcharge proposal only homes worth £2 million or more will be affected. However, experience shows that once taxes are put into effect they tend to be extended and catch more people – particularly when considering normal house price inflation and the approach we have seen employed by the government around tax thresholds being frozen.
“Many older homeowners are asset rich but cash poor and will struggle to pay the High Value Council Tax Surcharge without compromising lifestyle objectives. This new tax will undoubtedly put considerable financial strain on many older people who have lived in their homes for many years but who don’t have enough income to pay additional taxes.
“Later life lending solutions enable borrowers to stay in the home they love and have evolved to meet homeowners’ later life income and capital needs, including financial shocks such as unexpected and unwelcome taxes. All homeowners over the age of 55 should seek financial advice to ensure they properly consider all the options available. Also, advisers across the wealth and mainstream mortgage markets need to ensure they are either equipped to advise on these later life lending products or have referral relationships in place with trusted specialist partners.
“These changes announced in the Budget follow the recent FCA discussion paper around the future of the mortgage market which recognizes the need for the UK’s £9 trillion of housing wealth to be unlocked and put to more productive use for the benefit of individuals and society. This is particularly relevant for the living standards of older homeowners who often need to boost retirement income. Improving awareness of the options available is crucial and actions should include the consideration of property wealth as standard in Government-backed guidance services such as Pension Wise and Money Helper.
“Whilst the Mansion Tax might lead to a short-term spike in housing market transactions, given the phasing of the plans, the longer-term outlook is likely to put a further drag on this part of the market which is currently highly lucrative for mortgage advisers. The later life lending market, whilst already supporting over £25bn of new borrowing per annum, is set for exponential growth and presents a fantastic opportunity for mortgage advisers to evolve their businesses, replace lost income and deliver improved outcomes for customers.
“The Budget may contain some unwelcome news for both customers and the mortgage industry but there is now some clarity on the landscape ahead. The value of advice has never been more evident and pipelines can now be unlocked as advisers help customers move forward with their plans through appropriate consideration of all their options – including products such as modern, flexible lifetime mortgages.”
Catherine Heyes, Partner and Head of Tax at PKF Littlejohn, said:
“Inheritance Tax allowances have been frozen (again!). The nil rate band has been left at £325,000 since 2009 and the residence nil-rate band at £175,000 since 2020 – this will have pulled more estates into IHT. Don’t forget that pensions will fall into estates from April 2027.
“There have been no changes announced to the tax free lump sums for pensions, or restrictions to the IHT gift regime, which had created lots of pre-Budget knee jerk decisions.
“The overriding story with this budget – apart from the leaks – is stealth taxation, in particular by freezing tax bands. This is not a new tactic but it is a successful way to raise tax. Whether it will raise the colossal sums needed is doubtful.”
Will Ford, Partner in the Private Wealth Team at Womble Bond Dickinson said:
“This Budget delivers a triple hit for wealth creators and asset owners. Employers and employees face an unexpected squeeze with NICs imposed on salary sacrifice pension contributions, further eroding a key pillar of retirement planning, and placing further costs on businesses. Investors and business families will feel the pain from higher dividend and savings tax rates, while landlords and property owners are hit twice; landlords by a 2% hike on property income tax and high value homeowners by a new council tax surcharge on homes worth £2m or more.
“Meanwhile more fiscal drag will pull more individuals and families into income tax. Many measures announced will not be introduced immediately, so to that extent, the pain will be deferred.
“One welcome aspect of today’s announcement was confirmation of a reverse of Government policy in relation to agricultural property relief and business property inheritance tax reliefs. Whereas the Government had confirmed that the new £1m allowance to apply from April 2026 would not be transferable between spouses, it has now sensibly abandoned that policy, and confirmed that unused allowance will be transferable after all. This had been a particularly egregious element of the planned new regime, which would simply have punished families who were poorly advised, or not advised at all.”
Renny Biggins, Head of Policy, Products & Long-Term Savings at TISA, said:
“This is some much-needed clarity on the changes to IHT and is welcomed. However, the new process for IHT could lead to a significant number of non-exempt pension pots being caught in limbo for up to 15 months through personal representative requests to withhold 50% of pension funds. This risks causing more stress at what is often a traumatic time, and for those classed as vulnerable who may be reliant on receiving the money to which they are entitled, it will add increasing pressure at the worst possible moment.”
Graeme Privett, Partner at HaysMac said:
“At last year’s Budget, the Chancellor implied that the tax hikes were a ‘necessary evil’ to set the UK back on track for growth. But after today, it is clear that progress has been glacial at best, and more needs to be done to plug the UK’s fiscal ‘black hole’. The burden on taxpayers across the board is almost at breaking point and there is no sign of this easing for the foreseeable though taxpayers will at least have the chance to prepare given the delay before most of the announced increases come into force.
“Whilst it’s welcome that the income tax rate itself will not be increased in real terms across the board, in reality income taxes continue to rise substantially due to frozen tax thresholds. Even before today’s announcements, the existing threshold freeze represented the largest single tax-raising measure since Geoffrey Howe nearly doubled VAT in 1979. And while frozen thresholds are a politically helpful tool to indirectly increase income tax revenues without changing headline rates, repeated use inevitably raises the question of whether the thresholds will ever rise again. The new increased rates for investment income is targeted to avoid taxpayers who are what the Government describes as ‘working’.
“Continued pressure on taxpayers will ultimately be counterintuitive to the Government’s growth ambitions. There reaches a point where people will make behavioural changes to avoid the various cliff edges of tax that they face – and as the number of tax traps grow, these behavioural changes may manifest in even more people and investors moving overseas. Through raising taxes to plug its black hole, the Government’s growth ambitions could be unintentionally swallowed up in the process.”
Azimkhon Askarov, Co-CEO & Partner at CONCRYT, said:
“Rachel Reeves’ 2025 Budget marks a turning point for the UK economy. By increasing taxes on wealth and assets under the banner of “taxing those with the broadest shoulders,” the Chancellor is signaling that Britain’s growth model – historically driven by domestic consumption, inward investment, and London’s role as a magnet for global wealth – is shifting and so too must the mindset of British merchants.
As higher earners and investors look abroad for more favourable tax environments, the ripple effect will reach far beyond London’s elite. Local businesses that once thrived on domestic spending are already feeling the chill, from luxury retailers to service providers. For many, looking overseas is no longer just an opportunity, it’s a survival strategy.
This exodus of wealth and spending power will reshape how British merchants think about growth. Expanding into international markets will become essential, not optional. That means getting serious about cross-border payments, ensuring they can move money efficiently, manage currency risk, and offer customers seamless payment experiences wherever they are in the world.
In this new landscape, the ability to trade globally and get paid globally, will define the next generation of successful British businesses.”
Edvards Margevics, Co-CEO & Partner at CONCRYT, said:
“Rachel Reeves’ Budget may have been framed as a necessary step to restore fiscal stability, but the scale of the tax hikes risks alienating investment in one of Britain’s most dynamic sectors, technology. The UK’s tech ecosystem has long relied on a delicate balance of entrepreneurial confidence, international capital, and a supportive policy environment.
“This Budget shifts that balance. Raising taxes on capital, wealth, and assets sends a difficult signal to venture investors and founders alike, particularly those who have the option to relocate their capital, teams, or headquarters abroad. At a time when countries across Europe are actively competing to attract high-growth technology businesses, the UK cannot afford to make itself less appealing to the innovators driving economic productivity.
“The danger is that we create a two-speed economy: one where ideas are born in Britain but scaled elsewhere. For payments and fintech firms, this is particularly concerning, innovation thrives on cross-border collaboration, fluid capital movement, and investor confidence. If investment begins to flow out of the UK, the long-term cost won’t just be lost tax revenue, but diminished global influence in emerging fields such as AI, digital infrastructure, and financial technology.
“In an era defined by digital trade, Britain’s growth story depends not on taxing innovation, but on enabling it to move and scale globally.”
Jay Sanghrajka, Partner at Price Bailey, said:
“The number of employee-owned businesses being created slumped to the lowest level in three years in Q2 2025 following the CGT clawback introduced in last year’s Budget. This further reduction in CGT relief could undermine the fragile recovery in employee ownership.”
“It fundamentally changes the risk calculus for sellers. While EOTs remain attractive for succession planning and employee engagement, the reduced tax incentive narrows the gap with other routes such as trade sales, private equity, or management buyouts”.
Prasam Patel, Managing Director at Alvarez & Marsal Tax said:
“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.”
