UK November 2025 Budget Speculation: What You Need to Know About Rumoured Tax Changes

With Chancellor Rachel Reeves set to deliver her second Budget on November 26th, 2025, speculation is reaching fever pitch. As agency owners, you need to understand what's coming and how it might affect your business. Here's everything we know about the rumoured changes and what you should be considering.

The November 2025 Budget is shaping up to be one of the most significant in recent memory. Following Chancellor Rachel Reeves' unprecedented pre-Budget statement on November 4th, where she indicated that "everyone will have to contribute" and refused to recommit to manifesto promises about protecting working people from tax rises, it's clear that substantial changes are on the horizon.

For agency owners specifically, these changes could fundamentally alter how you structure your business, extract profits, and plan for growth. With the government facing a fiscal shortfall estimated at £25-30 billion and productivity forecasts being downgraded, tax rises appear inevitable.

The Current Landscape: Why Tax Rises Are Almost Certain

The Chancellor faces an impossible balancing act. Government borrowing has hit a five-year high, debt servicing costs are rising, and public spending commitments continue to grow. Meanwhile, recent U-turns on welfare reform have reduced the expected savings from spending cuts by around £5 billion.

Rachel Reeves has previously committed to not raising income tax, National Insurance, or VAT for working people. However, her recent statements suggest these red lines may be shifting. More importantly for agency owners, there are numerous other ways to raise revenue without technically breaking these manifesto promises.

Income Tax and National Insurance: The Stealth Approach

Income Tax Threshold Freeze Extension

One of the strongest rumours circulating is an extension of the personal tax threshold freeze beyond 2028, potentially until 2030 or beyond. This represents a classic "stealth tax" - no rate increases, but more people getting dragged into higher tax bands as wages rise with inflation.

What this means for agency owners:

• The optimal salary-dividend balance becomes increasingly difficult to maintain
• Keeping total income around £50,000 per year will become harder
• Tax-efficient benefits like pensions and electric vehicles become more valuable
• Timing of bonuses and large payments matters more than ever

Property and Wealth Taxes: The Big Unknown

Property tax reform represents one of the most significant areas of speculation, with several radical proposals under consideration:

The "Mansion Tax"

A proposed 1% annual charge on properties worth over £2 million has gained significant traction. Think tanks have suggested this could raise substantial revenue while targeting higher-value properties.

Stamp Duty Overhaul

Reports suggest the Chancellor is considering replacing stamp duty with:

• A national proportional property tax on homes over £500,000
• Annual property levies rather than one-off transaction taxes
• Spreading stamp duty payments over several years

Capital Gains Tax on Property

One of the more concerning rumours for property investors is the potential removal of Principal Private Residence Relief above certain thresholds (£1.5 million has been mentioned). This would mean CGT on your main home if it exceeds this value when you sell.

Capital Gains Tax: Almost Certain Changes

CGT appears to be firmly in the Chancellor's crosshairs. The 2024 Budget already increased rates to 18% and 24%, but further increases are widely expected:

Rate Alignment with Income Tax

The most significant rumour involves aligning CGT rates with income tax rates:

• Current 18% rate potentially increasing to 20%
• Current 24% rate potentially jumping to 40% or even 45%

Business Asset Disposal Relief (BADR)

BADR is already scheduled to increase from 14% to 18% in April 2026, but further restrictions are being discussed:

• The lifetime £1 million limit could be reduced
• The qualifying conditions could be tightened
• The relief could be phased out entirely

CGT on Death

One of the most radical proposals being discussed is removing the CGT-free uplift on death. Currently, when someone dies, their beneficiaries inherit assets at current market value. The proposal would mean CGT applies to gains from the original purchase date to death, creating a potential "double death tax" alongside inheritance tax.

Strategic considerations for agency owners:

• If you're planning to sell your business in the next 12-18 months, timing becomes crucial
• Asset disposals might be worth bringing forward
• Corporate structures may need reviewing to protect future gains

Dividend Tax: The Agency Owner's Biggest Concern

For most agency owners, dividend tax changes represent the most direct threat to current profit extraction strategies. The rumours here are particularly strong:

Rate Increases

Speculation centers on increases to dividend tax rates across all bands. The current rates (8.75%, 33.75%, and 39.35%) could rise significantly.

Dividend Allowance Changes

The £500 dividend allowance could be:

• Reduced further (it was £2,000 until recently)
• Eliminated entirely
• Restricted based on total income

Immediate considerations:

• If your company has sufficient reserves and you were planning to take dividends anyway, consider bringing some forward
• Pension contributions made by the company may become more attractive relative to dividends
• Multiple company structures may need reorganising before changes take effect

ISA and Savings Changes

Even savings aren't escaping scrutiny. Several changes are being discussed:

Cash ISA Reduction

The £20,000 ISA allowance could be split, with cash ISAs potentially limited to:

• £12,000 (from current £20,000)
• £10,000 in some proposals
• As low as £4,000 in the most extreme speculation

British ISA Introduction

A new "British ISA" could provide additional allowances specifically for UK investments, potentially requiring:

• 25% UK shareholdings in stocks and shares ISAs
• Up to 50% in some proposals
• Additional complexity in ISA management

Exit Tax: The New Threat

Perhaps the most concerning new development is speculation about a UK "exit tax" similar to those already in place across Europe. This would tax unrealised gains when individuals leave the UK permanently.

For agency owners, this could affect:

• International expansion plans
• Relocation to tax-efficient jurisdictions
• Emigration timing and strategies

If you're considering relocating (particularly to places like the UAE), you may want to accelerate planning, as some mitigation strategies require time to implement.

What Agency Owners Should Do Now

Immediate Actions (Before November 26th)

1. Review your dividend strategy - If you have company reserves and planned dividend extraction, consider timing
2. Assess your asset position - Review any personal or business assets you might want to dispose of
3. Document BADR qualification - Ensure all business asset disposal relief requirements are properly evidenced
4. Evaluate international plans - If overseas expansion or relocation is in your medium-term plans, consider acceleration
5. Review company structure - Multiple company arrangements may need adjustment depending on changes

Key Dates to Remember

• November 26th, 2025: Budget Day (approximately 12:30 PM)
• April 6th, 2026: Most new tax rules would take effect
• January 31st, 2026: Self-assessment deadline - last chance for some current year planning

Need Help Navigating the Changes?

The rumoured changes to the tax landscape could significantly impact how you structure and run your agency. If any of the speculation discussed here feels relevant to your situation, or if you want to discuss how potential changes might affect your specific circumstances, we're here to help.

As agency finance specialists, we understand the unique challenges facing marketing agencies in the current tax environment. Whether you need help with profit extraction optimisation, business structure reviews, or strategic planning for potential tax changes, our team has the expertise to guide you through whatever emerges from the November Budget.

Ready to discuss your options? Book a strategy call with our team. We'll review your current setup, discuss the potential impact of rumoured changes, and help you develop a plan that works regardless of what the Chancellor announces.

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