Autumn Budget 2025: Martin Lewis' instant reaction and analysis

MSE_Emily

The Chancellor Rachel Reeves has announced a raft of changes to income and property taxes, cash ISAs, benefits, transport and more in her Autumn Budget today (Wednesday 26 November). MoneySavingExpert.com founder Martin Lewis has shared his instant reaction and explained what the changes mean for you, and we've added more detail on them below...

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Autumn Budget 2025: Martin Lewis' instant reaction and analysis

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kimwp

The salary sacrifice change seems bizarre - it will disproportionately tax lower paid people as NI drops around 50k.

Slightly disappointed not to see a ladder to increase tax at higher levels of income and for dividend tax to still be so low compared to income tax. Increasing tax on savings just seems to be complicating things by increasing the different tax percentages.

mark_cycling00

The 3p a mile electric car driving tax is going to increase every year from now isn't it. 

Wish I hadn't bought the stupid thing now.

£1000 to install the charger, 80p per kWh to charge at a public charger and much higher purchase price than a petrol car. This morning was -3degrees and the range had almost halved due to the cold. 

Yes you can get 5hrs cheap rate (domestic ) electricity overnight but you pay more per kwh for the other 19hrs. 

I can see them becoming much more unpopular over time 

Grumpy_chap

kimwp said:

dividend tax to still be so low compared to income tax. 

Remember that the dividend tax is paid on top of the corporation tax already paid - typically 20%.

Sachakins

Given a definition of income being money received for work and services you provide. What is the legality in this budget to charge an income tax at varying levels fir an income received.
I refer to the change in income tax to 22% for income from property, ie rental income, with the current income tax at 20% for basic rate tax payers.

Could there be a legal challenge to this, as income earned, regardless of source is still just income. So is the Chancellor breaking the law by differentiating the rate of tax for say a basic rate tax payers whose income tax is 20%, yet the income from property is 22%.
Income is income, regardless of source, so income tax is by definition the tax on earned income.

Therefore a separate rate due to its sources must be illegal.

Also as an aside, labour pledge not to raise income tax, but this is a rise in income tax. So breaking another manifesto pledge to not raise income tax.

This alone should allow the public to request a new election as this government, by it's actions has broken the manifesto it pledged and was elected on by the public.

Given this rise in income tax now dictates they lied in order to be voted in, surely means that they should forfeit government and call a fresh general election immediately.

Just a thought gor you to ponder?

Sachakins

mark_cycling00 said:

The 3p a mile electric car driving tax is going to increase every year from now isn't it. 

Wish I hadn't bought the stupid thing now.

£1000 to install the charger, 80p per kWh to charge at a public charger and much higher purchase price than a petrol car. This morning was -3degrees and the range had almost halved due to the cold. 

Yes you can get 5hrs cheap rate (domestic ) electricity overnight but you pay more per kwh for the other 19hrs. 

I can see them becoming much more unpopular over time 

They've become unpopular instantaneously by this action.
Also note, this is in addition to the exciuse duty aka road fund tax, that was applied to ev last year too.

will-w

We own a PHEV and have just done a 600 mile trip to France on holiday. 

We charged our car before setting off, a full EV range of 28 miles. 

How does the Government justify charging us 1.5p for all 600 miles, when only 28 of them were done on EV power? 

And 450 of them were not even in this country! 

It is completely unfair on PHEV drivers and not remotely thought through! 

It also means our annual PHEV tax on 10k miles will be a whopping £770.  That’s more than a V8 Range Rover! 

If they want to implement this scheme it needs to be fair and based as a consumption tax, similar to fuel VED, on electricity charged.  Not on miles travelled. 

eskbanker

Sachakins said:

Given a definition of income being money received for work and services you provide. What is the legality in this budget to charge an income tax at varying levels fir an income received.
I refer to the change in income tax to 22% for income from property, ie rental income, with the current income tax at 20% for basic rate tax payers.

Could there be a legal challenge to this, as income earned, regardless of source is still just income. So is the Chancellor breaking the law by differentiating the rate of tax for say a basic rate tax payers whose income tax is 20%, yet the income from property is 22%.
Income is income, regardless of source, so income tax is by definition the tax on earned income.

Therefore a separate rate due to its sources must be illegal.

You seem to be contradicting yourself several times over there!

The first half of the statement that "Income is income, regardless of source, so income tax is by definition the tax on earned income" is correct but then has a non-sequitur that it must relate only to earned income, when income can indeed come from many sources, some of which can be described as earned (e.g. your narrower "money received for work and services you provide") but many of which can't and fit your word "received" better, such as savings interest, dividends, and property!

Trying to make a case that anything done today (and on other days) is illegal doesn't withstand any scrutiny, but of course budgets are simply setting out what will appear in primary and/or secondary legislation, so again by definition, if differential income tax rates are specified, then that's what the law will say....

HedgehogRulez

Sachakins said:

Given a definition of income being money received for work and services you provide. What is the legality in this budget to charge an income tax at varying levels fir an income received.
I refer to the change in income tax to 22% for income from property, ie rental income, with the current income tax at 20% for basic rate tax payers.

Could there be a legal challenge to this, as income earned, regardless of source is still just income. So is the Chancellor breaking the law by differentiating the rate of tax for say a basic rate tax payers whose income tax is 20%, yet the income from property is 22%.
Income is income, regardless of source, so income tax is by definition the tax on earned income.

Therefore a separate rate due to its sources must be illegal.

Also as an aside, labour pledge not to raise income tax, but this is a rise in income tax. So breaking another manifesto pledge to not raise income tax.

This alone should allow the public to request a new election as this government, by it's actions has broken the manifesto it pledged and was elected on by the public.

Given this rise in income tax now dictates they lied in order to be voted in, surely means that they should forfeit government and call a fresh general election immediately.

Just a thought gor you to ponder?

Naive and wrong on many levels. Awks.

monkey-fingers

mark_cycling00 said:

The 3p a mile electric car driving tax is going to increase every year from now isn't it. 

Wish I hadn't bought the stupid thing now.

£1000 to install the charger, 80p per kWh to charge at a public charger and much higher purchase price than a petrol car. This morning was -3degrees and the range had almost halved due to the cold. 

Yes you can get 5hrs cheap rate (domestic ) electricity overnight but you pay more per kwh for the other 19hrs. 

I can see them becoming much more unpopular over time 

If it makes you feel better, I fully expect a pence per mile to hit all cars before this kicks in.

I called it out years ago, but the Tories kicked the can down the road.

monkey-fingers

Grumpy_chap said:

kimwp said:

dividend tax to still be so low compared to income tax. 

Remember that the dividend tax is paid on top of the corporation tax already paid - typically 20%.

I think people don't realise this.

The Government will be taking 46% of my total income from me come the next tax year.

My contractor rate isn't extraordinary (my deal is probably similar to an MPs if we include pension contributions)
People think that because our day rate tops us out over £100k we're absolutely minted.

We really aren't. We pay more tax than anyone.

I'll go back into a permanent role. My take home will be slightly less, but then I'll get job security, holidays, sick leave and all the other perks that come with not being treated like a commodity.