The Budget: No Tax Rises for Working People… So They Say.
So, Rachel Reeves has just finished her Budget, and the headline is:
“Good news — no tax rises on working people.”
Which is absolutely spot on…
Unless you:
Earn money
Save money
Invest money
Use salary sacrifice
Run a business
Own a buy-to-let
Or live in a very nice house
In which case… strap in.
Let’s break down what’s actually happened, without the political spin.
If You Earn Money – Congratulations, You’re Being Frozen
If you have a job, run a business or earn any form of income, your tax bands are now frozen until 2030.
That means:
As your salary goes up
Your tax-free allowance doesn’t
You quietly drift into higher tax bands
And you pay more tax without the word “tax rise” ever being used
By 2030, this will drag around 1.7 million more people into higher-rate tax.
Stealth tax at its finest.
If You Save Money – Your ISA Just Shrunk
If you’re sensibly saving into a Cash ISA, brace yourself:
Current allowance: £20,000
New allowance from April 2027: £12,000
That’s an £8,000 cut to the amount you can shelter from tax every year.
And if your savings are outside an ISA?
There’s now an extra 2% tax on interest earned.
So yes, saving money just became less rewarding.
If You Use Salary Sacrifice – Nice Try
If you’re using salary sacrifice into your pension (you know, the thing the government encourages), the National Insurance benefits are now being capped at £2,000 a year.
So:
Still allowed ✅
Still encouraged ✅
Just significantly less tax-efficient ❌
Another quiet clip of the wings for higher earners and business owners.
If You Run a Business – Dividends Are Back on the Menu
If you operate via a limited company and take income through dividends, there’s another 2% dividend tax increase coming in 2026.
So:
Corporation tax already up
Dividend tax now going up again
Capital allowances coming down
Owning a business is still worth it — but it’s definitely becoming harder to extract profits tax-efficiently.
If You’re a Landlord – Of Course You’re Included
If you have a buy-to-let, there’s another 2% tax rise on property income from 2027 onwards.
Because:
Mortgage interest relief is already restricted
Regulation is already high
Costs are already up
And rental yields are already under pressure
So yes — landlords are being squeezed again. Surprise.
If You Own a Very Nice House – The Mansion Tax is knocking at the door
If your home is worth over £2 million, there’s a new council tax surcharge coming in.
Estimated extra bill:
£2,500 – £7,500 per year
Higher band at £5 million+
It’s not being called a mansion tax…
But it absolutely is a mansion tax.
Anything Else? Oh Yes…
Electric vehicles will be getting a new mileage-based tax
Fuel duty is frozen… temporarily
HMRC is being given more power to pursue compliance and debt
And the UK is now very much in a higher-tax, lower-growth economy
But don’t worry — apparently this doesn’t affect “working people”.
So What’s the Real Message of This Budget?
If you:
Work
Save
Invest
Run a business
Own property
Or plan for retirement
You are now in a world where:
Tax efficiency matters more than ever
Passive planning is no longer enough
Regular reviews are now essential, not optional
What Should You Actually Do Now?
This is the point where doing nothing quietly becomes expensive.
Whether you’re:
A homeowner
A first-time buyer
A landlord
A business owner
Or approaching retirement
You should now be reviewing:
Your mortgage strategy
Your investment and savings structure
Your property tax exposure
Your pension contributions
Your long-term affordability
Want to Sanity-Check Your Position After the Budget?
We’re offering post-Budget reviews to help clients understand:
What these changes actually mean for them
Where money can be saved
And what to fix now before it gets more expensive later
You can book online via our website or simply contact us on 0161 728 4947.