Savings, income & Investments
No change to current allowance of £20,000 on Cash ISAs as was originally mooted. A new “Starter ISA” will be introduced for first-time investors.
The Lifetime ISA to be replaced with a First-Time Buyer ISA.
New, flat-rate State Pension to rise by £488 a year from April, equivalent to 3.9% – under the triple lock policy, with the old basic rate State Pension to rise by £374.40.
Unpaid carers will no longer lose their entire Carer’s Allowance if they earn more than £204.00 a week after tax, with a taper rate introduced instead.
Parental pay extended to self-employed fathers and parents in same-sex couples.
Taxes
A new tax-free allowance for low-income pensioners, to ensure those with income up to the value of the full new State Pension will not pay income tax. This will be carried out automatically.
Any income from savings and property over the current savings allowance of £1,000 for basic rate taxpayers & £500 for higher rate will now pay an extra 4% in tax, equivalent to 24%, 44% respectively or even 49%.
No changes to the tax on dividends.
No changes to the Capital Gains Tax Allowance.
No changes the plans for pension funds to be included in Inheritance Tax calculations planned from April 2027.
Help with the cost of living
One-off payment of £100 to help with rising energy costs for those in council tax bands, A-D paid directly to your bank account from January. Wales will be given the funding, but must decide if they will introduce the same payment.
VAT cut on electricity bills extended beyond April to July.
Standing charges on gas bills by the end of 2027- a fixed payment regardless of usage to be removed with costs added to the unit rate instead, so if your bills are high, there will be little or no saving, suggested at £45 a year.
A continued freeze on fuel duty to July.
Import taxes to be removed on more than 100 food products, including gherkins and marmalade, as well as kerosene and fertilisers.
A 55p per mile tax-free mileage rate for those driving 10,000 miles for work was made permanent with the rate rising from 25p per mile to 35p above that distance.
Business Owners
The legal minimum wage to rise by 3.9% in April to £13.21 an hour for those aged 21 and over, £11.27 for ages 18–20, and £8.31 for 16–17-year-olds and eligible apprentices. Employers will need to allow for the higher payroll costs.
A new Founders’ Relief offers a 10% Capital Gains Tax rate on up to £10 million of lifetime gains for qualifying founders of high-growth companies from April 2027.
But the lifetime limit for Business Asset Disposal Relief falls from £1 million to £500,000 from 6 April 2027. Qualifying gains within the limit remain taxed at 18%. Transitional rules mean that signing a contract before April may not preserve the current limit. Anyone planning a sale or succession should check which relief is available. The new concession will not cover every owner who loses out under the lower limit.
Investment relief becomes less generous as qualifying expenditure from 1 January 2027; the main first-year allowance rises from 40% to 50%. The main annual writing-down rate then falls from 14% to 12%, including for existing pools, from 1 April 2027 for corporation tax and 6 April for income tax. Full expensing remains. So taken together, the changes raise revenue despite the larger initial deduction.
A new scheme taking 25% off electricity bills for 10,000 firms to launch in April, with payments backdated to this year.
As ever, the devil is in the detail and there is much of this, but if you think you are likely to be affected by any of the changes, do get in touch by emailing theteam@uniqfamilywealth.co.uk or calling 029 20782330.
