The latest Autumn Budget brings several important tax and policy changes that will affect small business owners, company directors and anyone who draws income through dividends.
To help you cut through the noise, we’ve put together a simple, easy-to-digest summary of the key updates: what’s changing, when it takes effect, and how it may impact your business and personal tax position.
If you’re a limited company owner or you employ staff, these changes are especially worth noting. Here’s what you need to know...
📈 Dividend, savings & investment income: tax increase
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From April 2026, tax on dividends, property income and savings will rise by 2 percentage points.
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That means if you typically draw income via dividends (common for owner-directors), your tax bills on that income are going up. We’ll need to review your drawings and cashflow to assess impact.
📄 No rise in Income Tax, but pressure remains
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The government did not raise headline income tax rates.
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BUT with inflation and frozen thresholds, more people may end up paying a higher effective rate: something to keep in mind if you or your staff get pay rises.
👥 Labour costs likely to increase
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The national living wage has gone up: good news for workers, but costs for employers (especially small businesses) may rise.
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If you use salary-sacrifice pension schemes, proposed changes may reduce their attractiveness; this could mean higher wage costs or altered pension benefits.
💡 What this means for business planning & structure
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If you run your business via a limited company and take most profits as dividends, now is a good time to review your remuneration mix (salary vs dividends) to optimise tax position.
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If you pay staff near minimum wage or use salary-sacrifice or pensions schemes, expect admin burden and costs to rise; plan budgeting accordingly.
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Consider cashflow & profit forecasts carefully: higher taxes on dividends may bite, especially if you rely on consistent distributions.
As always, if you'd like to know more and are an existing client of ours, please get in touch with your client manager who'll be happy to help!