Today’s Autumn Budget and the second for Chancellor of the Exchequer Rachel Reeves, as predicted, featured tax rises, £26 billion in total to be exact (down slightly from £32 billion in the last Budget), which appear to be mostly financing additional spending and providing additional fiscal headroom. According to the Chancellor, the Budget will build ‘fiscal headroom’ of almost £22 billion, up from £9.9 billion after last year’s Budget. The rises come on the back of the Office for Budget Responsibility’s downgraded productivity forecast, which had been published online early by mistake and saw Parliamentarians poring over the document on their phones as they sat in the House of Commons chamber before the Chancellor stood up to speak. Disappointingly, the only mitigation that has been announced to the controversial changes to agricultural property relief and business property relief is that the £1 million allowance will be transferable between spouses and civil partners, albeit that this was among our recommendations on this issue made here, here and most recently in our evidence submission to the House of Lords Finance Bill Sub-Committee inquiry into draft Finance Bill 2025/26. This, and a range of other mitigations, were also highlighted by the Institute’s UK Tax Manager, Leontia Doran, in last month’s oral evidence session to that Committee. Whilst this is a welcome mitigation, it does not go far enough to ensure the changes are targeted at wealthier farms and businesses. Further, there have been none transitional measures announced to protect older farmers in particular. The Institute will continue to call for a special derogation from these changes for Northern Ireland. You can read our full reaction to the Budget in our Press Release. Buried in the Budget publications was also the news that in 2026/27 there will be no late submission penalties for Making Tax Digital (MTD) for income tax quarterly updates. The Institute has been continually calling for the Government to announce a soft landing for MTD and did so as recently as last month in our Pre-Budget submission and in a letter in September to HMRC’s new CEO. Also hidden on page 110 of the Budget Red Book was the news that the Government will not regulate tax advisers. What this precisely means is not yet clear, however this a welcome confirmation that our members are not facing dual regulation which we recommended in our response to the consultation ‘Raising standards in the tax advice market – strengthening the regulatory framework and improving registration’ in 2024. On the personal taxes side, several thresholds will continue to be frozen until 5 April 2031, and, commencing from April 2026, there will be an increase to the income tax rates for dividends of 2 percent for both the basic and higher rate, followed by a 2 percent increase for all rate bands for property and savings income from April 2027. This will apply in England, Wales, and Northern Ireland. On the business front, e-invoicing will be mandatory for business from April 2029. There are also proposals to require income tax Self-Assessment taxpayers with PAYE income to pay more of their tax liability in-year via PAYE from April 2029. The Northern Ireland Executive will receive an additional £240 million resource funding and £130 million capital funding through the operation of the Barnett formula. The Government also announced the proposed sector, geography, and co-investment for the Northern Ireland Enhanced Investment Zone. And to boost trade between Northern Ireland and Great Britain, £16.55 million will be provided over three years from 2026/27 to “create a ‘one stop shop’ support service that will help businesses navigate the Windsor Framework, unlock opportunities for trading across the UK internal market, and enable businesses based in Northern Ireland to take advantage of their access to UK and EU markets”. The Institute will continue its campaign for a lower rate of corporation tax for Northern Ireland and last week wrote to the Exchequer Secretary to the Treasury ahead of the Budget on this issue. The analysis herein is based on the publications of HMRC and HM Treasury. More detail on the key tax announcements features in the remainder of this newsletter and will continue in next Monday’s edition of Chartered Accountants Tax News.

Personal taxes measures It was again confirmed that there will not be any increases in the basic, higher, or additional thresholds for income tax, or the rates of employee National Insurance Contributions (NICs). However, the freeze on certain personal tax thresholds will now continue to 2031 and the rates of income tax will increase by 2 percent for property, savings, and dividend income, commencing for dividend income received from April 2026. The deep freeze continues…. The expected continued freeze on personal tax thresholds was confirmed. The income tax thresholds and the equivalent NICs thresholds for employees and self-employed individuals will stay at their current levels for a further three years until 5 April 2031. The inheritance tax nil rate bands are also frozen for a further year to the same date. The £5,000 secondary NICs threshold for employers will also be frozen until 5 April 2031 after dropping from £9,100 from 6 April 2025. Property, savings, and dividend income From 6 April 2026, the basic rate of tax for dividend income will increase from 8.75 percent to 10.75 percent, and the higher rate will increase from 33.75 percent to 35.75 percent. There will be no change to the dividend additional rate which will remain at 39.35 percent. For both property income and savings income, the 2 percent increases will take effect from 6 April 2027.The property basic rate will be 22 percent, the higher rate will be 42 percent, and the additional rate will be 47 percent. The tax rates on savings income will also increase by 2 percent points across all bands from 6 April 2027 which would appear to include the 0 percent band for the first £5,000 of savings income which would increase to 2 percent. These increases are likely to act as a disincentive to investment, and for property income will most likely be passed on by landlords to their tenants via higher rents. Earlier self-assessment payments From April 2029, Self-Assessment (SA) taxpayers with PAYE income will be required to pay more of their SA liability in-year via PAYE. The Government will publish a consultation in early 2026 on delivering this change, and also on timelier tax payment for those with only SA income. This changes comes as a surprise given discussions in the last few years in the context of Making Tax Digital that the Government was not seeking to target earlier payments of SA tax.

This month HMRC is continuing with preparations for Making Tax Digital (MTD) for income tax by issuing the first batch of mandation letters based on 2024/25 self-assessment (SA) returns which have already been filed. The template of the letter is available here. Disappointingly, agents will not receive a copy of the letter sent to their client hence it is important that agents take steps to identify anyone who will be receiving a letter this month and make contact with them as soon as possible (the letter does prompt the taxpayer to share this with their agent). HMRC has also published an update on its MTD for income tax trial and we have been asked to remind you about HMRC’s agent outreach campaign for MTD. Mandation letters Sole traders and landlords who had already filed their 2024/25 SA return by the end of August 2025 are the first to receive a mandation letter from HMRC that they must comply with MTD for income tax from 6 April 2026. This is on the basis that their 2024/25 SA return included gross income from sole trade self-employment and property of more than £50,000. A further batch of mandation letters for anyone meeting these criteria but not filing their 2024/25 SA return until after 31 August 2025 but on or before 31 January 2026 will not be sent until February and March 2026. Although HMRC will be sending out mandation letters, HMRC is reminding taxpayers that it is their responsibility to: check if they are required to comply with MTD income tax from April 2026; and sign up for MTD income tax. As sign up is not automatic, if a taxpayer believes they are mandated but they do not receive a mandation letter, they should still sign up. HMRC has published guidance for taxpayers and for agents on how to sign up. We expect that towards the end of November 2025, HMRC will also send a letter to all unrepresented taxpayers who have not yet filed their 2024/25 SA tax return to remind them of the April 2026 start date for MTD income tax. These are not mandation letters but are prompt letters which are being sent on the basis of the 2023/24 SA return if this shows gross income exceeding £50,000. Trial update On the MTD trial front, the MTD testing update bulletin sets out progress made to date, provides answers to frequently asked questions and encourages participants in the trial to give their views by completing a survey.  According to HMRC, almost 2,100 successful quarter one submissions for 2025/26 have been made. A reminder was also issued to participants about the second cumulative quarterly update which were due for filing by 6 November 2025. Agent outreach campaign reminder HMRC has also asked us to remind you about the agent outreach campaign which we told you about in Chartered Accountants Tax News on 1 September. Agents can check the authenticity of this service here: Check if an email you've received from HMRC is genuine. Testing by HMRC indicates that completing the agent outreach form takes circa 2 minutes. When completing the form, agents are asked to:  Give permission to be contacted by HMRC by email, Indicate how many clients they have for testing and mandation sign ups, and  Express an interest in a one to one conversation with HMRC about MTD readiness and testing. To access the form, agents should sign in with the Government Gateway ID and password linked to their Agent Services Account (ASA). Note that if an agent does not yet have an ASA, they can still complete the expression of interest form by signing in with their Government Gateway ID and the password associated with their existing HMRC online services for agents account (agents will need to manually provide contact details when using this method).