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Lois Vallely
November 28, 2025
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Hoxton News • November 28, 2025
The Budget Britain Held Its Breath For
Hoxton Blog • The Budget Britain Held Its Breath For
It was among the most anticipated Budgets in modern history.
Ahead of Chancellor Rachel Reeves’s much-speculated-about 2025 speech on 26 November, media headlines screamed of a gaping “fiscal gap” and the likelihood of substantial revenue-raising measures.
Commentators speculated that sweeping threshold freezes, wealth-focused tax rises, and sharp reforms to pensions and property could be unleashed in a single, high-stakes package.
Every leak, rumour, and off-the-record briefing was treated as a clue that the Chancellor was preparing to rewrite more than just the numbers.
The drama intensified when the Office for Budget Responsibility (OBR) accidentally released its economic outlook ahead of the speech, detonating a fresh wave of conjecture.
Analysts claimed the leak confirmed the worst fears: the Treasury needed revenue, fast, and no group was entirely safe.
Savers shifted money, investors braced, and the press cast the coming statement as a moment of reckoning.
Anticipation High, Surprise Low
When the time came for the announcement, the sting had been taken out of it.
On one hand, the Budget did deliver major tax rises – around £26 billion – including threshold freezes, pension-contribution changes and a “mansion tax” on high-value homes.
But on the other hand, by the time Reeves stood at the despatch box, many of the details had already been leaked. And so the blow was softened.
The drama that media and markets had been building up – a sense this Budget could blow the roof off expectations – didn’t quite materialise.
The market reaction was described as “fairly muted” initially; bond yields dipped only modestly before rebounding, and equities edged up slightly.
Many commentators noted that the day felt more like damage-control than a dramatic unveiling. Because so much was already public, the speech lacked the shock value many anticipated.
Key Changes in Brief
We’ve cut through the media noise to bring you a summary of the changes that were announced.
To find out more about how they might affect you, you can download our key takeaways guide here and watch our post-Budget webinar here.
1Higher taxes on wealth and investment income
The Budget increases taxes on income from property, dividends and savings. The Government says this is to bring tax on wealth closer to the tax people pay on their earnings. Basic allowances remain, but anyone with significant investment income will face higher overall tax.
2New Council Tax Surcharge for homes worth more than two million pounds
A new Council Tax Surcharge will apply to properties valued above two million pounds. This is aimed at high value homes and is likely to increase annual costs for owners of prime property, particularly in London and the Southeast.
3Pension salary sacrifice restricted
From 2029, the amount of pension contribution that can benefit from reduced National Insurance through salary sacrifice will be capped at two thousand pounds per person. This limits a planning route commonly used by higher earners.
4Reduced tax relief for Employee Ownership Trust sales
The tax relief available when selling a business into an Employee Ownership Trust will reduce from one hundred per cent to fifty per cent. This change makes these structures less attractive for business owners who had been considering them for succession planning.
5Reform and tightening of reliefs used by higher earners
Several reliefs that the Government believes benefit wealthier individuals have been tightened. There will also be stronger anti-fraud and tax compliance activity. This means more scrutiny from HMRC and fewer opportunities to use niche reliefs.
6New charge for electric vehicle use
Electric vehicle owners will face a new per mile charge which will replace lost fuel duty income. This will be self-reported. For people with several cars or high annual mileage, this will increase motoring costs.
7 Freeze on personal tax thresholds
Personal tax and National Insurance thresholds will remain frozen until 2031. As incomes rise over time, more people will gradually move into higher tax bands, including many higher earners.
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