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Chancellor Rachel Reeves’ Autumn Budget 2025 was closely watched by business owners and investors, particularly those with income and wealth tied to property ownership, dividends and long-term planning.
The Budget confirms a clear direction of travel - with higher taxation, changes to pension efficiency in the future and increasing importance on the need for careful long-term planning.
In our latest blog, we outline some of the key changes and areas for careful consideration.
Higher Taxation on Dividends, Savings and Property Income
From April 2026, the tax rates applied to dividend income will increase by 2 percentage points:
- The ordinary dividend rate will rise to 10.75%
- The upper dividend rate will increase to 35.75%
At the same time, tax rates on savings income and property income will also rise by 2 percentage points.
For many business owners who draw income predominantly through dividends or rely on investment and property income alongside their business earnings, this will reduce net income and may alter the effectiveness of existing income-extraction strategies.
Future Changes to Pension Salary Sacrifice
Pensions continue to play an important role in business-owner financial planning, particularly where company contributions or salary sacrifice arrangements are used.
However the Budget confirmed that from April 2029:
- Only the first £2,000 per year of pension contributions made via salary sacrifice will continue to benefit from National Insurance relief
- Contributions above this level will remain eligible for income tax relief, but without the NI saving
While this change is not immediate, it serves as a reminder that pension planning is evolving and should be reviewed regularly - especially for higher earners who are making significant contributions.
Business Growth and Exit Considerations
The Budget introduced a new listing relief aimed at encouraging UK public listings. Companies that list on a UK-regulated market from 27th November 2025 will benefit from a three-year exemption from Stamp Duty Reserve Tax (SDRT) on transfers of their shares.
For high-growth business owners, this may make a UK listing a slightly more attractive option as part of a long-term growth or exit strategy.
At the same time, the Budget also scaled back certain capital gains tax reliefs, including changes affecting employee ownership trust agreements. While not relevant to all business exits, this underlines the importance of reviewing assumptions around future sale or succession planning.
Greater Focus on Wealth Held Through Ownership
A broader theme running through the Autumn Budget is increased taxation on income derived from assets and ownership rather than employment.
For high-net worth business owners, this is particularly relevant if you:
- Retain surplus profits within your company
- Rely on dividends for personal income
- Hold investment or property portfolios alongside your business
The cumulative impact of these changes may not be felt immediately, but over time they can materially affect long-term income, retirement planning and wealth transfer.
What Business Owners Should Consider Now
In light of the 2025 Autumn Budget, business owners should:
- Review how income is extracted from their business and whether the balance between salary, dividends and pensions remains appropriate.
- Assess future pension contributions in light of upcoming changes to National Insurance relief.
- Revisit exit, sale or succession plans to ensure they remain tax-efficient under current and future rules.
- Ensure personal wealth, retirement income and estate planning are aligned with business decisions
Closing Thoughts
The 2025 Autumn Budget reinforces a key message for business owners: long-term financial planning matters more than short-term reactions to Budget headlines.
Incremental tax changes, particularly around dividends, pensions and asset-based income, mean that strategies which worked in the past may not deliver the same outcomes in the future.
At Two10 Investment Services, we help business owners understand how Budget changes affect their wider financial picture and provide clarity around the decisions that matter most.
If you’d like to review how the Autumn Budget impacts your situation, get in touch to arrange a consultation.
*Investments can go down as well as up and you might not get back the capital invested.
*Understanding your risk tolerance, assessing your capacity for loss and completing a suitability assessment are essential before proceeding with any investment or financial plan.
*Two10 Investment Services, does not give tax or legal advice but works with clients and their specialist tax and legal advisers. We recommend that clients should always take independent tax and/or legal advice on important matters and keep us informed of any considerations they would like us to take into account.
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