Autumn Budget 2025
Food and Drink
Individual
Income Tax (IT)
Income Tax and National Insurance thresholds will continue to be frozen for a further 3 years from 2028.
Dividend rates changing from April 2026:
• Basic rate: 8.75% to 10.75%,
• Higher rate: 33.75% to 35.75%
• Additional rate will remain unchanged at 39.35%
Savings rate changing from April 2027:
• Basic rate: 20% to 22%,
• Higher rate: 40% to 42%,
• Additional rate: 45% to 47%
From April 2027, there will be a separate rate of tax for property income. These will be the same as the new savings rates.
Pensions
From 2029, National Insurance (employee and employer) will be charged on salary sacrifice into pensions above an annual £2,000 threshold.
April 2026 – State Pension will increase by 4.8%.
Minimum wage
Minimum wage increasing from £12.21 to £12.71 per hour.
National Minimum Wage for 18 to 20-year-olds will increase from £10 to £10.85 per hour – working towards a single adult rate.
Inheritance Tax (IHT)
The new £1 million Agricultural Property Relief (APR) and Business Property Relief (BPR) allowance, coming into force from April 2026, can be transferred between spouses.
Business
Milkshake levy
From 1 January 2028, milk-based drinks and milk substitutes with added sugar will be encompassed by the existing Soft Drinks Industry Levy (SDIL).
The sugar threshold for the levy will be reduced from 5g to 4.5g per 100ml, although a lactose allowance will be introduced to account for naturally occuring sugars in milk.
Capital Allowances
A 40% First Year Allowance (FYA) will be introduced from 1 January 2026 for main pool expenditure, on top of existing allowances such as Annual Investment Allowance and Full Expensing (the latter applying to companies only).
Reduction to the main pool Writing Down Allowance (WDA) from 18% to 14% from April 2026.
Share Schemes
The Enterprise Management Incentive scheme eligibility limits have been vastly expanded to allow more companies to offer the tax-advantaged scheme to their employees.
Capital Gains Tax (CGT)
Reduced CGT relief on disposals to Employee Ownership Trusts (EOTs) from 100% to 50%, effective from 26 November 2025.
Economy
Inflation
The Office for Budget Responsibility forecasts inflation to average 3.5% in 2025, decreasing to 2.5% in 2026 and returning to the government’s 2% target in 2027.
Duties
EPR and plastic taxes
Mass balance approach (MBA) to be introduced to incentivise businesses to use recycled instead of new plastic packaging.
The government will increase the Plastic Packaging Tax (PPT) rate for 2026-28 in line with Consumer Price Index (CPI) inflation.
Alcohol duty
From February 2026, a rise in Retail Price Index (RPI) inflation will see an increase in alcohol duty. Pubs and restaurants will be affected as draught drinks included.
Fuel Duty
Fuel Duty to remain frozen at current levels until September 2026, with rates then gradually returning to those of March 2022 by March 2027.
Stamp Duty Reserve Tax
A three year Stamp Duty exemption will apply for companies newly listing on a UK regulated market.
Other points
Mileage-based charge
A new mileage-based charge on battery electric and plug-in hybrid cars from April 2028 at 3p per mile for electric cars and 1.5p for hybrid.
Apprenticeships
Training for under 25s through apprenticeships will be made free for small and medium-sized enterprises.
Your Old Mill Contacts
Phil Mills
Head of Food & Drink 07545 642087 phil.mills@om.uk
Lorraine Bolland Director 07817 491732
lorraine.bolland@om.uk
Laura Seaward Director 07870 970605
laura.seaward@om.uk
Lucy Bennett Adviser 01935 709320
lucy.bennett@om.uk
Courtney Bellringer Client Manager 01392 449228
courtney.bellringer@om.uk
Tony Hawes Chartered Financial Planner 01935 709329
anthony.hawes@om.uk
Ali Noble Senior Accountant 01392 449204 ali.noble@om.uk
Aisha Perrott R&D Specialist 01935 709427
aisha.perrott@om.uk
All details are correct at the date of publishing. This publication is for guidance only. It is important for you to take individual advice before taking any action. Old Mill is a trading name of Old Mill Accountancy Limited. Registered in England Number 13566765. Regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. Registered office Maltravers House, Petters Way, Yeovil, Somerset, BA20 1SH
