Spencer West Partners react to the Autumn Budget 2025

There was much speculation in the lead up to the Autumn Budget 2025, Chancellor Rachel Reeves’ second, which froze income tax thresholds, increased taxes on salary-sacrificed pension contributions, and houses over a certain value.

Spencer West Partners across tax, global mobility, AI, commercial property, and Employee Ownership Trusts shared their insights with various media outlets, providing an initial outlook on the implications of the various changes across business rates, personal tax, and the impacts on the UK’s growth ambitions in a highly competitive global landscape.

Bina Gayadien – Tax & Global Mobility

“The Chancellor announced key measures impacting taxation of employment without raising the headline income tax or social security rates.

“The announcements include bringing salary sacrificed pension contributions over £2,000 within National Insurance Contributions for employers (15%) and employees (8% or 2%) and an annual levy on electric cars, another popular benefit. These changes combined with the increase of minimum wages and freezing of personal tax thresholds until 2030-31 tax year will ultimately result into higher costs to employers impacting future pay rises and bonuses.

“Employers have until April 2029 to prepare for these changes and consider how they structure compensation and benefit packages to remain competitive while managing rising costs.”

Read Bina’s comments in UK Business News. 

Mark Tan – International Corporate Tax

“From an international corporate tax perspective, the Budget confirms that the UK is settling into a high tax, high investment model rather than trying to win a rate race. The main corporation tax rate stays at 25 per cent and the global minimum tax framework is left untouched, so multinationals get some welcome stability on the headline rate; or while already operating under global minimum tax rules, would barely feel a change. The bigger story sits around the OBR leak and the Red Book both pointing to a record tax take as a share of GDP, with most of the heavy lifting coming from personal and capital taxes rather than further rises in corporation tax. Medium term growth has been quietly downgraded, which means more of the fiscal consolidation is being carried by the people who own and work in businesses rather than by the companies themselves. 

“For global groups deciding where to put capital, talent and IP, that matters. The Chancellor said “if you build here, Britain will back you” and has called upon expanded investment schemes and eased listing rules to support the start-up ecosystem. Freezing income tax thresholds to 2031, increasing tax on dividends, property and savings, and tightening reliefs such as salary sacrifice and CGT relief for employee ownership all raise the cost of being a founder, senior executive or investor based in the UK. The UK offer is increasingly about rule of law, infrastructure and industrial strategy surrounding the 15% global minimum tax floor, rather than a low headline rate. That will still be attractive for some, but it makes the comparison with Ireland, the Netherlands and non-European hubs a more finely balanced conversation, especially for entrepreneurial and mobile clients.”

Read Mark’s comments in International Tax Review.

Hilesh Chavda – Private Client

“While the broad wealth tax overhaul rumours did not materialise, the High-Value Council Tax Surcharge is a real wealth and property-targeted measure – but limited in scope. Those owning more valuable properties and those with investment/savings income will see meaningful tax increases.

“Meanwhile, the freeze in income tax thresholds is a stealth-style tax increase. Over time, many working individuals will feel the bite even without a headline rate change.

“The Budget also caps the amount of pension contributions via salary sacrifice that are exempt from National Insurance. Pension strategies relying on salary sacrifice will need revisiting – this is a real structural change.” 

Christian Wilson – Employee Ownership Trusts

Announced change: The Chancellor announced that the relief from Capital Gains Tax available on qualifying disposals to Employee Ownership Trusts will be reduced from 100% to 50%. This will apply to all disposals made on or after 26 November 2025.

“Halving the capital gains tax relief on sales to employee ownership trusts will likely cool momentum in the short term. It raises founder tax costs, squeezes headroom for deferred consideration and is likely to bring seller price expectations closer to independent valuations.  

“That said, EOTs remain a robust succession route for good businesses because they preserve culture, jobs and independence; it’s not just about the tax. The added advantage of creating your own buyer and softer due diligence remain unaffected.”

Read Christian’s comments in Employee Benefits and Personnel Today.

Michael Shapiro – Commercial Property

Announced change: The Chancellor announced Permanent lower business rates tax rates for over 750,000 retail, hospitality and leisure properties, worth nearly £900m a year from April 2026.

“It’s evident this is a “political” budget without producing anything to stimulate the mantra of “growth, growth, growth.”

“Despite lowering business rates for many retail and hospitality businesses through higher rates on warehouses used by online retail companies, the fact remains that the local high street has many empty retail and hospitality premises.

“Speaking with many commercial landlords and tenants which make up my client base, the main driver is the level of business rates, and the way that the business rating system works.

“While an overhaul is scheduled for April 2026, this is something that needs to be addressed with urgency. Hospitality and retail businesses continue to struggle through the current system, which is further compounded by the rise in NI in the last Budget and the incoming rise to the minimum wage in January.

“The domino effect of this on retail and hospitality workers, builders, and tradespeople cannot be underestimated, and the impact is clear to see by walking along any high street.”

Read Michael’s comments in Facilitate Magazine.

Announced change: Properties in England worth more than £2 million to face a council tax surcharge of £2,500 and properties worth more than £5 million face £7,500.

“The thresholds presented by the Chancellor mean there could be inequity. In some areas of the country, £2 million would buy a nice country house befitting of the term “mansion”, but in central London, you might only expect a 2-3-bedroom flat in a mansion block.

“My view is that regulations would need to be adapted to reflect the higher value property market in London and other high-value areas of the country. This surcharge comes into effect in 2028, so we await further clarity as to whether the “mansion tax” is a one-size-fits-all approach.”

Read Michael’s comments in Short Term Rentalz, The Industry, Caterer Licensee News, Serviced Apartment News

Lawrence Lupin – Immigration & Global Mobility

“The Budget sits in the shadow of significant immigration reforms, including a proposed 10-year standard route to settlement, higher language requirements and a tighter sponsor-suitability framework. For many clients, from corporate mobility teams to families, this has already created a degree of uncertainty about long-term planning.

The Budget itself does not alter immigration rules, but it does change the environment into which people relocate. Higher dividend taxation, increased charges for high-value property and the continued freeze on income-tax thresholds all add to the cost of establishing or maintaining life in the UK. These factors matter to global talent, internationally mobile executives and HNW individuals who often have a genuine choice of jurisdictions.

For now, the landscape is best described as evolving; immigration policy is shifting, and today’s Budget adds further economic considerations. Integrated immigration and tax planning will be crucial in the months ahead.”

Read recent articles by Lawrence and Simon Kenny regarding upcoming immigration changes and consultations:

• Unpacking new proposals for permanent residence
• Right to work consultation underway
• The Immigration Advent Calendar

James Clark – Data Protection, AI and Digital Regulation

“In the Prime Minister’s address to London Tech Week in June of this year, he declared that he wanted the UK to be the “best state partner for tech entrepreneurs anywhere in the world”.  The Government’s AI Opportunities Action Plan set out a bold vision of a country investing in, and benefitting from, the technology of the future.  So has the PM’s vision been borne out by today’s budget?

“Yes and no.  There are definitely nuggets in there to cheer tech enthusiasts, including:

• The establishment of four AI Growth Zones;
• Funding of a modern public compute ecosystem, including a new national supercomputer service in Edinburgh
• An AI for Science Strategy to boost researcher productivity
• Funding from UK Research and Innovation for innovative UK companies
• Capital investment in NHS and HMRC technology infrastructure

“However, the scale of investment is necessarily constrained by the wider pressures on the public purse.  The fact is that the UK is competing with bigger markets – whether that is the US, China or the EU – all of whom are pouring public and private funding into technology – and particularly AI – at a level that far outstrips the relatively modest commitments in the UK budget.  By way of example, each AI Growth Zone will be backed by just £5 million of investment.

“Also, these commitments need to be seen in the context of the wider impact on technology businesses, including start-ups.  Here, there is some bad news, including the increased rate of tax on dividend income, the decrease in CGT relief on qualifying disposals to Employee Ownership Trusts (popular with tech businesses) and the hike in the CGT rate for business owners selling their business.”

Read James’ comments in Tech Republic and IT Brief.