The speculation surrounding the Autumn Budget 2025 has been as feverish (if not more so) than that leading up to last year’s budget. It had been expected that last year’s budget would be the primary tax-raising fiscal event of this parliament, with future budgets focusing on less significant measures. However, the prospect of a disappointing growth forecast and reports of a black hole in the public finances caused general expectation that further, significant, tax-raising measures would be announced today, 26 November 2025.
Such speculation had time to grow in intensity, given that the budget has been held relatively late in the year. During this lengthy period, there have been reports of “all but certain” tax increases, and not long afterwards, reports of U-turns on the same. Varying reports of the size of the black hole in the public finances and expected growth forecasts appear to have been the reason behind such reversals.
In the few days leading up to the budget, speculation began to settle on a few significant tax-raising measures. As such, some, though not all, of the key announcements set out below had been widely anticipated.
A summary of the principal changes in today’s announcements, both headline-grabbing announcements and technical developments, follows.
Key tax increases – an overview
Amongst the announcements today were the following key measures:
- Income tax thresholds frozen;
- Increase in income tax rates on dividends, savings and property income;
- Decrease in the limit for investment in cash ISAs;
- Introduction of a “mansion tax” – the High Value Council Tax Surcharge;
- Introduction of NICs on pension contributions by way of salary sacrifice exceeding £2,000;
- Restriction of capital gains tax relief on disposal of shares to employee ownership trusts;
- Gambling tax increases;
- Change to the VAT treatment relating to private hire vehicle fares.
Measures relating to taxes on individuals
Income tax: Extending the freeze in income tax and national insurance contribution (NICs) thresholds to the end of the 2030-2031 tax year
In one of the key headline announcements, the Chancellor confirmed that income tax thresholds will be frozen until the end of the 2030-2031 tax year. The current thresholds are as follows:
- Personal allowance – £12,570;
- Basic rate – £12,570;
- Higher rate – £50,270;
- Additional rate – £125,140.
It has also been confirmed that:
- The primary threshold for Class 1 NICs, and lower profits limit (LPL) for Class 4 NICs, will remain aligned with the personal allowance for income tax until 5 April 2031;
- The NICs upper earnings limit (UEL) and upper profits limit (UPL) will remain aligned to the higher rate threshold for income tax until 5 April 2031; and
- The NICs secondary threshold will also be frozen at £5,000 until 2030-2031.
Income tax: Increasing the tax rates on dividends, savings and property income by 2%
In a key headline measure today, the Government has announced that income tax on property, savings and dividend income will be increased by 2%. In summary:
- The ordinary and upper tax rates for dividend income will increase by 2%, from April 2026. This means that, for dividend income:
- The ordinary rate will rise to 10.75%, up from 8.75%;
- The upper rate will rise to 35.75%, up from 33.75%;
- The additional rate will remain at 39.35%;
- The tax rates on savings income will increase by 2% for all bands, from April 2027. This means that, for savings income:
- The basic rate will rise to 22%, up from 20%;
- The higher rate will rise to 42%, up from 40%;
- The additional rate will rise to 47%, up from 45%.
- Separate tax rates will be created for property income, to be effective from April 2027 (as is already the case for dividends and savings income). This means that, for property income:
- The property basic rate will be 22%;
- The property higher rate will be 42%;
- The property additional rate will be 47%;
It has also been announced that finance cost relief will be provided at the property basic rate (22%).
National insurance contributions (NICs): Charging national insurance contributions (NICs) on pension contributions exceeding £2,000 by way of salary sacrifice
The Chancellor has announced that from April 2029, employer and employee NICs will be charged on employee pension contributions made by salary sacrifice, above a “NICs-free” cap of £2,000 per year.
The Government will consult with stakeholders regarding the administration of collecting the NICs. It is intended that employers will report the total amount sacrificed through existing payroll software.
It has been confirmed that income tax relief on pension contributions made by way of salary sacrifice will remain exempt and employer pension contributions will continue to be free of NICs.
Income tax: Expanding eligibility limits of the Enterprise Management Incentives (EMI) Scheme
The following measures will take effect for eligible companies in relation to EMI contracts granted on or after 6 April 2026:
- The limit on company options will be increased to £6 million, from £3 million;
- The limit on gross assets will be increased to £120 million, from £30 million;
- The limit on the number of employees will be increased to 500 employees from 250 employees.
In addition, the limit on the exercise period will be increased from 10 years to 15 years. This change will apply in relation to (i) EMI contracts granted on or after 6 April 2026 and (ii) EMI contracts which have not already expired or been exercised. Existing contracts will also be able to be amended without losing the tax advantages the EMI scheme offers, provided that it is in line with the legislation.
Income tax / capital gains tax: Changes to the Venture Capital Scheme (VCT) and Enterprise Investment Scheme (EIS)
It has been announced that, from 6 April 2026:
- The income tax relief that can be claimed by an individual investing in VCT will be reduced to 20% from its current rate of 30%;
- The gross assets requirement (that a company must not exceed for the EIS and VCT) will be increased:
- From £15 million to £30 million immediately before the issue of the shares or securities;
- From £16 million to £35 million immediately after the issue of the shares or securities;
- The annual investment limit (that companies can raise) will be increased:
- From £5 million to £10 million;
- For knowledge-intensive companies, from £10 million to £20 million;
- The company’s lifetime investment limit will be increased:
- From £12 million to £24 million;
- For knowledge-intensive companies, from £20 million to £40 million;
Income tax: Reducing the cash ISA allowance from £20,000 to £12,000
Currently, it is possible for an individual to use all of their £20,000 annual ISA allowance for cash savings. It has been announced that from April 2027, the amount of cash which can be saved into an ISA annually will be reduced from £20,000 to £12,000.
Those aged 65 or over will be carved out of the change and will continue to be able to use their full £20,000 ISA limit for cash savings.
Any contributions to ISAs before April 2027 will be unaffected. The overall ISA limit will also remain unchanged at £20,000.
High Value Council Tax Surcharge (HVCTS): Introduction of a surcharge on higher value properties (“mansion tax”)
The Chancellor announced that a new High Value Council Tax Surcharge (HVCTS) will be imposed on owners of residential property in England whose properties are valued at £2 million or more. The measure is expected to take effect in April 2028, and the Government expects to commence a public consultation on details relating to the surcharge in early 2026.
HVCTS will apply to homeowners, rather than occupiers, and the surcharge will be levied along existing Council Tax obligations. In order to determine whether properties will fall within HVCTS, the Valuation Office will conduct a targeted valuation exercise to identify properties above £2 million, with HVCTS charged on the owners of properties within scope based on 2026 valuations. Revaluations are expected to be conducted every five years.
The surcharge starts at £2,500 for properties valued at between £2 million and £2.5 million, with the highest rate of surcharge at £7,500 for properties valued above £5 million.
The Government also plans to consult on possible reliefs and exemptions from HVCTS, specifically in respect of the impact HVCTS may have for more complex ownership structures including companies, funds, trusts and partnerships.
Capital gains tax: Employee ownership trusts
From 26 November 2025, 50% of the gain on disposal of shares to the trustees of an Employee Ownership Trust will be treated as the disposer’s chargeable gain for capital gains purposes. The remaining 50% of the gain will not be chargeable at the time of disposal but will continue to be held over to come into charge on any future disposal of the shares by the trustees of the Employee Ownership Trust.
As regards that portion of the gain which is in the former category, business asset disposal relief and investors’ relief will not be available, where relief under section 236H Taxation of Chargeable Gains Act 1992 has been claimed.
Capital gains tax: Non-resident capital gains
For disposals made by protected cell companies (PCCs) on or after 26 November 2025, a change to the definition of property rich entities will apply, so that it is an individual PCC cell that is to be looked at for the purposes of the property richness and substantial indirect interest tests, rather than the PCC itself. PCCs are a type of company made up of a number of separate cells where the assets and liabilities of one cell are segregated and protected from those of the other cells.
In addition it was announced that an Extra-Statutory Concession that applies to non-UK resident individuals who have invested in Collective Investment Vehicles and exempts them from the requirement to make a double taxation treaty claim by return will be formalised, with effect from 1 April 2026 for companies and 6 April 2026 for individuals.
Capital gains tax: Anti-avoidance for share exchanges and reorganisations
A new rule will have effect in relation to an issue of shares or debentures made on or after 26 November 2025.
However, where a clearance application was received by HMRC before 26 November, the current legislation in section 137 Taxation of Chargeable Gains Act (TCGA) 1992 will apply where the shares and debentures are issued either:
- within 60 days of announcement; or
- if later, within 60 days of the decision under section 138(1) or (where relevant), of that under section 138(4) TCGA 1992.
The existing anti-avoidance rules will be amended to ensure that they apply to those persons who have entered into arrangements where the main purpose, or one of the main purposes, of the arrangement is to secure a tax advantage that they would not ordinarily have been entitled to. The effect will be that in those circumstances the reorganisation provisions will not apply.
The press release confirms that the focus of the current rule is the reason for, or purpose of, the overall reorganisation. The proposed revisions mean that the rule will now better target those cases where, as part of a commercial exchange or company reconstruction, additional arrangements have been put in place to obtain a tax advantage.
Inheritance tax (IHT): £1 million allowance for agricultural property relief (APR) and business property relief (BPR)
The Chancellor has announced that any unused £1 million allowance for APR and BPR will be transferable between spouses and civil partners. This will bring the APR and BPR allowance in line with the treatment of the nil-rate band and residence nil-rate band, which is also transferable. This change will also apply in relation to widows and widowers, where the first death was many years before 6 April 2026, when the APR and BPR limitations announced at the Autumn Budget 2024 take effect.
Inheritance tax: Capping inheritance tax trust charges for former non-UK domicile residents
With retrospective effect from 6 April 2025, a cap will apply on relevant property inheritance tax charges for trusts which held excluded property as at 30 October 2024. The relevant property charges are capped at £5 million over each 10 year cycle. The cap applies to settled property which was excluded property as at 30 October 2024 and that is situated outside the UK at the time of the relevant charge.
New trusts, or trusts created by individuals who were not formerly non-domiciled remain chargeable in full.
Inheritance tax: Infected blood compensation payments
The Infected Blood Compensation Schemes provide financial compensation to those who have been infected and or affected by infected blood or blood products in the UK. Payments made under the Infected Blood Compensation Schemes are relieved from IHT on the death of the infected or affected person.
It was announced that the existing relief from inheritance tax will be extended, so that where a person eligible for such compensation has already died at the time of payment, the first living recipient of that payment will receive an IHT credit to pass on the value of the compensation following their own death without an IHT charge.
Where the person eligible for the compensation has already died, the first living recipient will also have 2 years in which to pass on some or all of the compensation payment they receive, without any IHT becoming due. Any qualifying amount gifted will retain an equivalent IHT credit.
These changes will apply regardless of whether the person originally eligible for compensation was an infected person or an affected person.
Part of this announcement applies from 26 November 2026 with retrospective effect. Where a compensation payment under the Infected Blood Compensation Schemes has been made in respect of an infected or affected person who has already died, an IHT credit will apply on the death of the first living recipient of the compensation payment. This includes payments made before 26 November 2026.
Changes to the rules on gifting will have effect for qualifying gifts of compensation made during the lifetime of the first living recipient on or after 4 December 2025. If the compensation payment was made before 4 December 2025, it will be treated as though it had been made on 4 December 2025 for the purposes of the 2-year window for gifting.
Inheritance Tax: Anti-avoidance measures for non-long-term UK residents and trusts
A measure has been announced with the intention of preventing opportunities to use situs of personal or trust property to avoid IHT or pay less than long-term UK residents.
The new rule will look through non-UK companies or similar bodies to treat UK agricultural land and buildings as situated in the UK for IHT purposes. This follows the existing treatment for UK residential property. This will take effect from 6 April 2026.
Where a settlor ceases to be a long-term UK resident, there will be an IHT charge if there is a later change in situs of their trust assets from UK to non-UK, so that the trust cannot manipulate situs rules to avoid an exit charge. This will take effect for trust exit charges from 26 November 2025.
In line with other taxes, IHT charity exemption will be restricted to gifts made directly to UK charities and community amateur sports clubs. Gifts to trusts which do not meet the required charity or club definition will not be exempted as they may not have UK jurisdiction or be regulated. This change does not affect the separate IHT regime for property held in trusts. This will take effect for gifts to charities in lifetime from 26 November 2025 or on a death from 6 April 2026.
Residence-based tax regime: Technical amendments
Minor corrective amendments have been announced, with the intention of ensuring that legislation implementing various aspects of the new residence-based regime (which includes the four-year FIG regime, new overseas workday relief, the temporary repatriation facility and the new regime based on residence for inheritance tax), and associated reliefs, operate as intended. The majority of these changes will take effect from 6 April 2025 (i.e. with retrospective effect), with some changes taking effect from 6 April 2026, the date of Royal Assent or the date of announcement (i.e. 26 November 2025).
Annual tax on enveloped dwellings (ATED): Time limits
The Government will introduce a legislative amendment to ATED in Finance Bill 2025-26 to remove the time limit for taxpayers to submit a claim for overpaid tax where the chargeable amount is less than the initial amount chargeable. Such claims were previously time limited and had to be submitted to HMRC by the end of the chargeable period following the one to which the claim relates (i.e. within 12 months of the end of the chargeable period which the claim relates to).
Measures relating to taxes on businesses / relevant to certain business sectors
VAT: Excluding supplies of private hire vehicles (taxis) from the Tour Operator’s Margin Scheme
The Government has announced that it will legislate so that the Tour Operator’s Margin Scheme (TOMS) will not be available to private hire vehicle and taxi services, except where those are supplied alongside certain other travel services. This measure will be effective from 2 January 2026.
Alongside the announcement, the following were released:
- A full response to the consultation on the VAT treatment of private hire vehicles;
- Business Brief 8 (2025): VAT Tour Operators’ Margin Scheme – supplies by private hire vehicle or taxi operators.
The business brief sets out that the Government’s view, and HMRC policy, remains that TOMS does not (currently) apply to the private hire vehicle sector, and VAT is due on the full fare where charged by a VAT registered business. The Government is currently appealing an Upper Tribunal decision to the contrary to the Court of Appeal.
The publications confirm that no proposal for a reduced rate of VAT for supplied by private hire vehicles will be taken forward.
VAT: New relief for donations of eligible goods from businesses to charities
Following a consultation, Government has announced the introduction of a new VAT relief for business donations on goods to charities. From 1 April 2026, it will no longer be necessary for businesses to account for VAT on eligible goods donated either for onward donation, or for use in a charity’s (or other eligible organisation’s) non-business charitable activities.
In order to prevent misuse of the system, value limits will apply to donated items. Higher thresholds will be available for listed goods (such as technology and household appliances). Certain goods which are subject to excise duty will be excluded from the scope of the relief.
Gambling duties / levies: Increasing various rates of gambling duties / levies
The Chancellor has announced that:
- The rate of remote gaming duty (RGD) will increase from 21% to 40% from 1 April 2026;
- A new 25% rate of general betting duty (GBD) will be introduced from 1 April 2027 for remote betting. It has been confirmed that remote bets on UK horseracing will not be subject to the 25% rate and will remain subject to the 15% rate, in recognition of the fact that operators also contribute 10% towards horserace betting levy. The new rate will also not apply to bets placed via self-service betting terminals, pool betting and spread betting, which will not be treated as placed remotely;
- GBD rates for general bets made in UK premises, horse and dog pool bets, financial spread bets and non-financial spread bets will remain unchanged;
- Bingo duty will be abolished, with effect from 1 April 2026;
Energy Profits Levy (EPL): Oil and gas price mechanism consultation
The Government has published its industry consultation outcome on the Oil and Gas Price Mechanism (OGPM), which is due to be the successor to the EPL.
Two models were proposed by the Government in its consultation as the framework to design the OGPM, as follows:
- Revenue‑based model (RBM): the RBM aims to tax the portion of a producer’s realised receipts for oil and gas that exceeds pre‑set price thresholds, directly linking liability to exceptional market conditions;
- Profit‑based model (PBM): the PBM aims to tax profits deemed to arise from unusually high prices (typically by reference to average market prices), bringing in cost deductions and proxies that add complexity and can misalign with the producers’ actual realised prices.
The Government has announced that it has opted for the RBM, and expects to introduce legislation in the next available Finance Bill to implement the OGPM once the EPL ends.
Corporation tax (capital allowances): New first year allowance and main rate of writing-down allowances
With effect from 1 April 2026 for businesses within the charge to corporation tax, and from 6 April 2026 for businesses within the charge to income tax, a new rate of writing-down allowance of 14% (in place of the existing rate of 18%) will take effect. For businesses whose chargeable period spans 1 April (Corporation Tax) or 6 April (Income Tax), a hybrid rate will have effect, based upon the proportion of a chargeable period falling before the change date and the corresponding proportion falling after the change date.
In addition, a new rate of first year allowance of 40% will be reduced for main rate expenditure, applicable to expenditure which does not qualify for full expensing and the £1 million annual investment allowance. The new first year allowance will be available for expenditure incurred from 1 January 2026.
Corporation tax: Late filing penalties
With effect for returns for which the filing date is on or after 1 April 2026, the level of fixed late filing penalties for corporation tax will be increased. The penalty for a late return will be increased from £100 to £200. The penalty for a return which is more than 3 months late will be increased from £200 to £400. For a late return where there have been three successive failures, the penalty will be increased from £500 to £1,000. For a return which is more than three months late, where there have been three successive failures, the penalty will increase from £1,000 to £2,000.
Corporation tax: Anti-avoidance relating to certain non-derecognition liabilities
With effect from 26 November 2025, a new rule will restrict deductions arising from arrangements where a main purpose of the arrangements is to secure a tax advantage, in the context of a transfer of assets to a securitisation vehicle.
The rule will be engaged where the relevant assets continue to be recognised for accounting purposes and, in connection with the transfer, a liability is recognised for accounting purposes. An example of arrangements targeted by this measure could involve an originator company selling some of the loan notes issued in a retained securitisation to an overseas subsidiary, with that sale funded by a low-interest loan from the originator to the overseas subsidiary. For accounting purposes, this could result in the recognition of a liability in the originator in connection with the original transfer of assets, and the originator recognising an expense in respect of this non-derecognition liability (which can be known as a failed derecognition liability or a continuing involvement liability). The relevant press release indicates HMRC’s view that existing legislation would also negate any UK tax advantage for such arrangements.
Update on advance tax certainty for major projects
The Government has published its consultation outcome on the Advance Tax Certainty Service, which is expected to launch in July 2026.
The Government has confirmed that any entity investing in a UK major project may apply, including UK and non-UK residents, and joint applicants investing in the same project. Clearances can accommodate entities not yet incorporated, taking effect on establishment. A clearance remains effective on a change of ownership provided underlying facts are materially unchanged. However, projects must meet a £1 billion lifetime in-scope spend threshold, assessed on UK project expenditure excluding financing costs and acquisitions of ownership interests.
The service will cover issues relating to corporation tax, VAT, stamp taxes, PAYE and the Construction Industry Scheme. It will not provide clearances on transfer pricing, asset valuations, purpose based tests (e.g., unallowable purpose), or hypothetical scenarios.
Early engagement with HMRC is expected to be a prerequisite to any application, used to explore eligibility, likely scope, timelines and information needs. Following submission, HMRC will hold a formal scoping meeting to finalise scope, confirm timetables and agree additional information. Applications must be based on fully disclosed facts and material assumptions.
HMRC targets an average 90-day turnaround from formal application to clearance, with project specific timelines agreed during engagement. Similar to other statutory processes, applicants are expected to promptly disclose any fact changes, with significant changes potentially warranting a fresh application. The clearances provided are also expected to only bind the Government’s view of law on disclosed facts, with a five year validity.
No fee will apply at launch. However, the Government will review the position after the first year of operation, alongside potential adjustments to capacity and the £1 billion threshold.
Stamp Duty Reserve Tax (SDRT): new UK listing relief
A new “UK listing relief” from SDRT has been announced, which will have effect for agreements to transfer made on or after 27 November 2025. The relief will have effect as a full exemption from the 0.5% SDRT charge on agreements to transfer securities of a company whose shares are newly listed on a UK regulated market. The exemption will apply for a period of 3 years from the date on which the company’s shares were listed. Once within the post-listing period, the exemption will apply to all the company’s securities – it will not be limited to shares.
The exemption:
- Will apply for depositary interests over a company’s securities, in cases where the depositary interests over the company’s shares are newly listed;
- Will not apply to the 1.5% SDRT charge which applies in relation to transfers to depositary receipt systems and unelected clearance services, or where the transfer forms part of a merger or takeover (where there is a change of control).
Reform of transfer pricing, permanent establishment and Diverted Profits Tax
The outcome of the consultation on the reform of transfer pricing, permanent establishment and Diverted Profits Tax was published. The Government has decided to proceed with the reform of UK law and that primary legislation will be included in the Finance Bill. New legislation will be supported by guidance in HMRC’s International Manual.
Headline issues include the following. For chargeable periods beginning on or after 1 January 2026, UK-to-UK transfer pricing will be repealed in circumstances where (broadly) there is no loss of tax. UK domestic legislation on permanent establishments will be aligned with the OECD Model Tax Convention and Commentary. Draft legislation will be included in the Finance Bill so as to withdraw Diverted Profits Tax as a separate tax and introduce the Unassessed Transfer Pricing Profits (UTPP) rules. The Government has confirmed that the intention is for UTPP to retain the scope of Diverted Profits Tax and apply to similar arrangements in an equivalent way.
Creative industries and Research and Development tax reliefs: Aadministrative changes
Three technical amendments have been announced, in relation to Research and Development Expenditure Credits (RDEC), Audio-Visual Expenditure Credits (AVEC) and Video Games Expenditure Credits (VGEC) respectively:
- Additional wording will clarify that payments made between group companies in return for one company surrendering RDEC, AVEC or VGEC to the other company are to be ignored for Corporation Tax purposes. Payments are only ignored if they do not exceed the amount of the credit surrendered. This will take effect for payments made on or after 26 November 2025.
- For VGEC only, a correction of the transitional rules for video games which switch from the Video Games Tax Relief regime to VGEC, so that European expenditure is accounted for at step 2 of the VGEC calculation. This will have effect for video games which switch to VGEC in an accounting period beginning on or after 26 November 2025.
- For AVEC only — updates to the calculation of special credit for visual effects (VFX) to prevent anomalous results and set out the treatment of negative results if they arise. New wording is to be added to the current law to stipulate that if the special credit calculation gives a negative result, that result must be set against the overall AVEC claimed for the period. To ensure that negative amounts are correctly applied where necessary, companies will be required to make a claim for special credit for every accounting period in respect of which they make a claim to ‘regular’ AVEC (excluding pre-completion periods). There are also some consequential rules which explain how to treat negative results when making claims in subsequent periods. This will have effect for claims to AVEC and special credit for VFX in respect of accounting periods beginning on or after 26 November 2025.
Electronic invoicing across UK businesses and the public sector: consultation response
It has been announced that the UK will introduce mandatory e-invoicing for all VAT invoices from 2029. In January 2026, the Government will launch a period of detailed collaboration with stakeholders to design and develop the UK’s e-invoicing regime.
Further amendments to Multinational Top-up Tax and Domestic Top-up Tax
A number of technical changes in relation to Pillar Two were announced. Most of these will take effect for accounting periods beginning on or after 31 December 2025, though most will also be permitted to take effect from an earlier date at the election of affected taxpayers.
However, the changes to the treatment of pre-regime deferred tax assets will take effect for accounting periods ending on or after 21 July 2025.
An overview of the relevant changes is as follows:
- Adjustments to provisions that set out how pre-regime deferred tax assets should be treated;
- Technical amendments to the clawback provisions that apply to tax equity partnerships;
- Simplified calculations for non-material members;
- Changes to the rules allowing the profits of a flow-through ultimate parent entity to be reduced;
- Adjustments to the election to exclude intra-group transactions;
- Adjustments to the recognition of payments for group relief as a covered tax for Domestic Top-up Tax;
- Technical adjustments to the test of whether de-merged groups meet the revenue threshold;
- Technical adjustments to the application of Part 3 to permanent establishments;
- Adjustments to the method for converting Domestic Top-up Tax amounts into sterling;
- Changes to the test of whether an instrument is to be regarded as equity or debt;
- A provision under Multinational Top-up Tax which disapplies another jurisdictions’ Qualified Domestic Minimum Top-up Tax safe harbour where the Qualified Domestic Minimum Top-up Tax does not apply to securitisation vehicles;
- A provision which ensures no liability under the undertaxed profits rule can be applied to a securitisation vehicle;
- A provision which removes profits and losses relating to Real Estate Investment Trusts from adjusted profits for the purposes of Domestic Top-up Tax;
- A provision for certain overseas undertaxed profits taxes to have qualifying status in the UK prior to the making of UK regulations and ahead of the outcomes of the ongoing process for international agreement on qualification of undertaxed profits taxes;
- Technical adjustments to cater for foreign Qualified Income Inclusion Rules and Qualified Domestic Minimum Top-up Taxes whose application is subject to an election or claim;
- Technical adjustments to clarify the location of a stateless entity;
- Technical adjustments to resolve double counting in relation to tax transparent investment entities;
- Technical adjustments to the cross-border allocation of deferred tax;
- Technical adjustments to the allocation of CFC mobile income;
- Technical adjustments to clarify the meaning of underlying profits and underlying profits accounts; and
- Other minor amendments and corrections.
Fuel duty: Ending the freeze on fuel duty.
The Chancellor has announced that the freeze to fuel duty, and the 5p cut first introduced in September 2022, will be extended to September 2026. The 5p cut will then be reversed through a gradual approach and from April 2027, fuel duty rates will be uprated annually by RPI.
Electric vehicle excise duty (eVED): Introducing a “pay-per-mile” charge on Electric Vehicle (EV) drivers
The Government has announced the introduction of the eVED, a new per-mile charge for electric and plug-in hybrid cars, in order to make up for declining fuel duty revenues. It is intended that the eVED will take effect from 1 April 2028.
The rate of tax will be:
- 3p per mile for fully electric cars (EVs);
- 1.5p per mile for plug-in hybrid vehicles (PHEVs) (to reflect the fact that PHEV drivers also pay fuel duty).
A consultation has been released, setting out details of the operation of the eVED and seeking views as to its design and implementation.
Overnight levy on visitors: Introducing a new “tourism tax” in England
The Secretary of State for Housing, Communities and Local Government announced yesterday (25 November 2025) that English mayors will receive a new power to raise levies on overnight visitors.
A 12-week consultation document has been released, which intends to seek views on the design of the new authority to raise a levy, including in relation to the scope of the levy and its rate.
Customs duty: Low value consignments
The Government has announced it will remove the customs duty relief which applies to low value imports (LVIs) imported into the UK. LVIs are goods with a value of £135 or less. The consultation document released alongside the announcement states that the relief for LVIs will be removed (meaning that LVIs will be subject to tariffs) and new LVI customs arrangements will be introduced from March 2029.
Alongside the announcement, the Government has released a consultation concerning the design of the new LVI customs arrangement. This includes asking for input on how the tariff should be paid, the potential application of an additional fee on LVIs to fund administration, and potential changes to VAT collection to reflect the new arrangements.
Soft drinks industry levy (SDIL): Changes to the so-called “sugar levy”
Yesterday (25 November 2025), the Health Secretary announced a suite of changes to the SDIL. It is intended that the changes will take effect on 1 January 2028. This followed a consultation on proposals to amend the SDIL to further incentivise soft drinks producers to reduce the sugar content in their drinks. The consultation response document was released alongside the Health Secretary’s announcements.
It has been confirmed that:
- As had been widely anticipated, the exemption for milk-based drinks with added sugar will be removed. To account for naturally occurring sugars in milk, a “lactose allowance” will be introduced;
- The exemption for milk substitute drinks with added sugar will also be removed. Milk substitute drinks without added sugar will continue to be outside the scope of the SDIL – this includes plant-based drinks which only contain sugars derived from their principal ingredient;
- The lower threshold at which the SDIL applies to qualifying drinks will be reduced from 5g per 100ml to 4.5g per 100ml. This is slightly higher threshold than the 4g per 100ml threshold proposed by the consultation.
A technical consultation on the draft legislation implementing the above amendments will be released in 2026, ahead of inclusion in a future Finance Bill.
Digital services tax (DST): DST review
Delivering on the statutory requirement under the Finance Act 2020, the Government has laid before parliament today a report on the DST. The report comprises a review of the performance and administration of the DST, including noted impacts in relevant markets.
The review sets out that the Government’s position continues to be that it will remove the DST once there is an appropriate international solution which addresses the same challenges as the DST. Until there is an appropriate long-term global solution to those challenges, the DST operates as an effective measure to ensure that digital businesses are taxed in line with their activities in the UK.
Economic crime levy (ECL): Changes to bands and charges
The Government will introduce legislation to implement the following changes to the ECL:
- An increase in the ECL charge for entities in the “medium” band from £10,000 to £10,200;
- Splitting the current “large” band with the introduction of a new band for entities with UK revenue between £500 million and £1 billion. Entities falling with this new band will be subject an ECL charge of £500,000; and
- An increase in the ECL charge for entities in the “very large” band from £500,000 to £1,000,000.
The higher levy rate for entities regulated for AML purposes in the existing “medium” and “very large” bands, and in the new “large” band, will first be charged in the financial year 2026 to 2027. The first payments following the rate changes will be due after the end of the financial year and before 30 September 2027.
Measures relating to advisers
Mandatory tax adviser registration
From May 2026 tax advisers will be required to register with HMRC, subject to a transition period of at least three months. This will be legislated for in the Finance Bill.
Disclosure of tax avoidance schemes (DOTAS)
New rules will update the DOTAS civil penalty regime, so that HMRC may directly issue DOTAS penalties instead of seeking tribunal approval. This change will also be made as regards the rules for disclosure of tax avoidance schemes for VAT and other indirect taxes (DASVOIT).
Universal Stop Regulations (USRs)
USRs will facilitate a prohibition on promoting avoidance arrangements that have no realistic prospect of success. A breach would attract a range of sanctions including criminal prosecution.
Promoter Action Notices (PANs)
A PAN would require businesses to stop providing goods or services to promoters of tax avoidance where those goods or services are used in the promotion of avoidance and the promoter is in breach of a USR or stop notice.
PANs will primarily be issued to financial institutions, insurance companies, and social media companies. PANs will not restrict the provision of legal or auditing services or the provision of services that provide access to the internet.
Anti-avoidance information notices (AAINs)
An AAIN will enable HMRC to issue targeted notices requiring persons that HMRC reasonably suspects are connected to the promotion of a marketed tax avoidance scheme to provide relevant information, including documents. Sanctions will include criminal prosecution.
Tackling tax adviser facilitated non-compliance
Legislation will be introduced in the Finance Bill to address dishonest conduct by tax advisers, including issuing file access and conduct notices and applying sanctions in the form of penalties.
Other key tax measures
Outcome of the independent loan charge review
The Government has announced the outcome of the independent review of the loan charge, which was commissioned in January 2025. It has been confirmed that the Government will accept all but one of the recommendations, and in some cases will go beyond the recommendations.
The key measure announced today was the introduction of a new settlement opportunity, administered by HMRC. The loan charge policy paper released today states that the features of the new settlement opportunity will significantly reduce the amount impacted individuals pay, particularly for those with the lowest liabilities. It is estimated that most individuals will benefit from a 50% reduction in outstanding loan charge liabilities, and 30% of individuals may be able to settle without paying anything.
In addition, the Government will write off £5,000 of each individual’s liability.
Other tax measures announced today
Today’s headline announcements were accompanied by a very large amount of new technical measures, which were released gradually throughout the day and into the evening. Detail of the key technical updates released at the time of writing have been covered in the above. There were also updates in relation to the following:
- Rate changes to tobacco duty;
- Abolition of the dividend credit for non-UK residents;
- Aggregates levy – the devolution to Scotland;
- Rate changes to alcohol duty;
- Aligning PAYE and overseas workday relief;
- Benefits in kind – easement for plug-in hybrid electric vehicles (PHEVs);
- Capital gains tax – incorporation relief changes;
- Changes to charity tax rules;
- Changes to employee car ownership schemes for income tax;
- Collective money purchase – registration of unconnected multiple employer schemes;
- Construction industry scheme – tackling fraud (a detailed policy paper was released on this but became unavailable later in the day, it is unclear whether this was intentional);
- Controlled foreign companies – interest on the reversal of state aid recovery;
- Corporate interest restriction relief for certain capital expenditure in the calculation of taxable earnings;
- Corporation interest restriction – reporting companies;
- Crown immunity – repeal of old legislation;
- Cryptoasset reporting framework (CARF) – reporting of UK resident cryptoasset users;
- First-year allowances for zero-emission cars and electric vehicle chargepoints;
- Income tax charge – winter fuel payments;
- Income tax in relation to cancelled, moved or curtailed shifts;
- Income tax – removal of the tax relief for additional homeworking expenses;
- Inheritance tax – thresholds;
- Inheritance tax – unused pension funds and death benefits;
- Inland border facilities – changes to port approvals legislation;
- Introduction of the Carbon Border Adjustment Mechanism;
- Introduction of Vaping Duty Stamps Scheme on 1 October 2026;
- Introduction of Vaping Products Duty;
- Landfill tax rates for 2026 to 2027;
- Modernising HMRC outbound digital communications;
- Oil and gas taxation – decommissioning relief deeds;
- PAYE changes for the umbrella company market;
- Plastic packaging tax – mass balance approach and removal of pre-consumer plastic;
- Stamp taxes on shares modernisation;
- Tax implications for Private Intermittent Securities and Capital Exchange System (PISCES);
- Temporary non-residence rules – post departure trade profits;
- The expansion of workplace benefits relief;
- Tobacco duty – rates changes;
- VAT and insurance premium tax – change to reliefs for qualifying motor vehicle leasing schemes;
- Refunds for VAT for Combined County Authorities;
- Vehicle excise duty for expensive car supplement threshold increase for zero emission vehicles;
- HMRC tax debt strategy update – corporate report;
- The taxation of decentralised finance involving the lending and staking of cryptoassets (consultation outcome);
- Tackling the hidden economy by expanding tax conditionality to new sectors (consultation outcome);
- Tax implications for companies and employees trading their shares on PISCES (policy paper);
- Research and development tax relief advance clearances (consultation outcome);
- Personal tax offshore anti-avoidance external engagement (policy paper);
- Behavioural penalties reform (consultation outcome);
- Transfer pricing – scope and documentation (consultation outcome).
