Autumn Budget 2025: Martin Lewis' instant reaction and analysis

Andy_L

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?

Parliament voting the budget into law

kimwp

monkey-fingers said:

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.

I definitely didn't. I was working on the basis of dividends from shares (my personal experience, made £18 so far), and a friend who owns a company saying that above the personal allowance she draws dividends instead of income to minimise the tax. she didn't mention corporation tax.

m_c_s

It does seem that this is just a standard tax and spend budget. No mention of growth anymore so how on earth is all this spending going to be paid for in the long term? The OBR in their report say that nothing in the budget contributes to extra growth. What is going on here? Unless I have missed something I don't know how the bond markets can have any certainty when they buy gilts. This will just add to the national debt. I cannot see any logic or long term strategy in this piecemeal budget.

Vitor

The 'mansion tax' is just another kicking for pensioners. And it's regressive.

monkey-fingers

kimwp said:

monkey-fingers said:

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.

I definitely didn't. I was working on the basis of dividends from shares (my personal experience, made £18 so far), and a friend who owns a company saying that above the personal allowance she draws dividends instead of income to minimise the tax. she didn't mention corporation tax.

Yup. Companies pay between 19 and 25% corporation tax on all profits.
This is all the money that the company has left over after paying wages and expenses.

Then you pay Dividend tax to withdraw it.

Many contractors leave the money in the company until they need it. If you have a lean few months without a contract, you can then extract it at a lower tax rate.

eskbanker

Vitor said:

The 'mansion tax' is just another kicking for pensioners.

It's obviously a very broad term for what is far from a homogenous group, but most references to 'pensioners' don't relate to the small subset who live in properties valued at over £2m!

Perhaps an issue for detailed design/implementation but I don't know why this wasn't just specified as two additional council tax bands rather than a new surcharge, as my understanding is that it'll entail property valuation and collection via CT.

DRS1

Vitor said:

The 'mansion tax' is just another kicking for pensioners. And it's regressive.

It is interesting that the mansion tax will be on the owner not the occupier.  Yet it will be collected alongside council tax which is collected from the occupier.  I bet that was dreamed up by an MP renting a "mansion" in Westminster.

jgh

monkey-fingers said:

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.

I'm already paying about 24p per mile taxes for a petrol car. EV drivers are getting off lightly.

jgh

How will the different tax rates for work vs rent work? If I have 9000 work income and 3000 rental income, that's 12000 so under the taxable allowance? What if I have 10000 work income and 3000 rental income, that takes me to 13,000 so over the 12570 allowance. How is the 430 residual taxed? At the moment it's simply 430 * 20%. Will it be split up in proportion to the source, so (3000/13000)*430 at 22% plus (10000/13000)*430 at 20%?

kimwp

jgh said:

How will the different tax rates for work vs rent work? If I have 9000 work income and 3000 rental income, that's 12000 so under the taxable allowance? What if I have 10000 work income and 3000 rental income, that takes me to 13,000 so over the 12570 allowance. How is the 430 residual taxed? At the moment it's simply 430 * 20%. Will it be split up in proportion to the source, so (3000/13000)*430 at 22% plus (10000/13000)*430 at 20%?

I think you can ask HMRC to add your income in different ways for tax efficiency. So I guess in that case, you would ask for the rental income to be the first in the calc, then it would be the work income that would be over the allowance.