Making sense of the 2025 Budget

A quick look at what it means for Oxfordshire, the Cotswolds and your personal finances.

The short version

The government raised about £26 billion through new taxes. Most of the impact will fall on people with higher incomes, business owners and anyone with valuable property or investment income. Everyday households will feel the impact too, because tax thresholds are still frozen while living costs continue to rise.

What this means for local businesses

Business owners across Oxfordshire and the Cotswolds may feel the squeeze. Here is what stood out.

More people will drift into higher tax bands

Frozen thresholds mean salaries that once sat safely in the basic rate could now push owners and employees into higher rates. Known as fiscal drag, as it drags people into higher tax brackets.

Dividends will cost more in tax

Many of our local businesses use the salary plus dividends model. This approach will feel more expensive now and may reduce take-home pay.

Staffing will cost more

Higher minimum wage levels and rising employer costs will challenge hospitality, care and tourism. These sectors are important here, so planning ahead is key.

Property-based businesses face new pressures

Farm shops, pubs, boutique hotels and holiday lets often rely on high-value property. New taxes on expensive homes could influence the way owners structure their affairs.

What this means for personal wealth in our area

People in Oxfordshire and the Cotswolds often hold a mix of income sources including property, pensions, investments and sometimes business shares. The Budget affects each of these.

High-value property will attract higher charges

If you own a home worth over £2 million or, if you plan to pass one on to family, you may face increased tax bills.

Dividends and savings may not stretch as far

Higher taxes on investment income make it more important to review how you hold your savings and investments.

Pensions will feel tighter

Salary sacrifice rules have been capped which reduces the tax advantage of larger pension contributions for employees and increases national insurance contributions for employers.

Introduction of Electric Vehicles Excise Duty (eVED)

EV owners will have to pay a 3p charge per mile (1.5p for hybrids) from April 2028 which will disproportionally impact drivers in rural areas.

Helpful next steps from Courtney Jones Financial Services

Simple and practical actions to consider.

Check your salary and dividends mix

The balance that worked last year may not be the best one now.

Revisit property plans

If you have a high-value home or a second property, it is worth reviewing ownership, inheritance plans and timing. Landlords need to consider the higher tax rates that will come into effect in April 2017

Diversify your savings and investments

Look beyond pensions for growth and security. A broader mix may help keep returns steady after tax.

Focus on cash flow if you run a business

With rising costs, this is a good time to review spending, pricing and future staffing decisions.

Stay informed

The Budget introduces changes that will roll out over time. Being proactive rather than reactive will help protect both your business and your personal wealth.

Need the help of a local financial adviser?  Get in touch with us.

Although the content of the article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.