DECEMBER MONTHLY NEWSLETTER RECAP

ASESA Solutions Ltd- DECEMBER MONTHLY NEWSLETTER RECAP

December focused on our coverage of the UK Autumn Budget 2025, announced on 26 November & Social Functions & Parties Update.

Across five newsletters, we highlighted the most significant measures affecting personal tax, savings, property, payroll, business planning & expense limit during the year end parties. Below is a concise summary of each update.

1] Autumn Budget 2025 – Key Personal Tax Changes

The Income Tax and National Insurance threshold freeze was extended to April 2031, increasing the likelihood of higher tax liabilities over time.

Dividend tax rates for basic- and higher-rate taxpayers will rise by 2 percentage points from April 2026, while the £500 dividend allowance remains unchanged.

These measures particularly affect employees, company directors, and shareholders relying on dividend income.

2] Savings & Capital Allowance Updates

Savings income tax rates will increase by 2 percentage points across all tax bands from April 2027, increasing tax on interest earned outside ISAs.

A new 40% First-Year Allowance will apply to qualifying capital expenditure from January 2026.

At the same time, the writing-down allowance for plant and machinery will reduce from 18% to 14%, affecting the timing of tax relief for businesses.

3] ISA & Property Tax Updates

The overall ISA allowance remains frozen at £20,000 until 2030/31.From April 2027, the Cash ISA allowance for under-65s will reduce to £12,000, encouraging greater use of investment-based ISAs.

A new High Value Council Tax Surcharge will apply from April 2028 to residential properties in England valued at £2 million or more.

4] Payroll & Pension Updates

National Minimum Wage and National Living Wage rates will increase from April 2026, raising payroll costs for many employers.

From April 2029, the National Insurance benefit of salary sacrifice pension contributions will be capped at £2,000 per year.

These changes will affect payroll budgeting, pension planning, and remuneration strategies.

5] Social Functions & Parties

Staff parties and gifts can be tax-free if the event is annual, open to all employees, and the total cost does not exceed £150 per person per year (including virtual events). If any condition is not met or the £150 limit is exceeded, the full cost is taxable, must be reported on a P11D, and is subject to Class 1A National Insurance.

Overall, the Autumn Budget 2025 introduces phased changes that will impact tax planning, savings strategies, business investment, and employment costs over the coming years. Early awareness and forward planning will be key to managing future obligations and opportunities.