Budget 2025 – new rules for high‑value property owners and UK businesses

The eagerly awaited Budget 2025 has now been announced by UK Chancellor Rachel Reeves, setting out a wide range of measures aimed at supporting growth, reforming taxes and reshaping how businesses and households contribute to the public finances. Key headlines for our clients include a new surcharge for properties over £2 million, increases to the National Minimum Wage and National Living Wage, a future mileage charge on electric vehicles, and a package of targeted support and reliefs for UK businesses in key sectors such as retail, hospitality and leisure. This article provides a general legal overview of the most relevant changes for high-value property owners and employers, but it is not tax advice and anyone affected should always seek independent tax advice from a specialist.

From a legal perspective, these Budget 2025 property tax and business changes mean many individuals and organisations will need to take a fresh look at ownership structures, contracts, policies and long-term planning. Fosters Solicitors can assist with the legal aspects of life planning, property and business ownership, and employment law, working alongside clients’ accountants and tax advisers where specialist tax advice is required.

New tax on homes over £2 million

One of the most eye-catching Budget 2025 property tax changes is the introduction of a new High Value Council Tax Surcharge on residential properties valued at more than £2 million, which is due to take effect from April 2028. Properties falling within this value bracket will face an additional annual charge within defined value bands, with government analysis suggesting that a significant number of higher-value homes, particularly in London and the South East, will be affected. This comes alongside other measures in the property and housing space, including reforms to planning and ongoing work to improve the home buying and selling process.

From a legal standpoint, this shift towards a recurring charge on high-value homes has several implications for clients in England and Wales. Ownership structures will become increasingly important, particularly where a property is held jointly, via a company, or as part of a wider estate and succession plan. Existing declarations of trust, partnership or shareholder agreements may not currently address who bears an ongoing annual surcharge of this type, and this can create disagreement if left unresolved. Wills and lifetime gift strategies may also need to be revisited to reflect the impact of an additional annual cost on long-term family wealth planning.

Legal considerations for high-value homeowners

• Review how any £2 million plus property is owned and whether declarations of trust or company documentation need updating.
• Consider how the High Value Council Tax Surcharge interacts with Stamp Duty Land Tax, Inheritance Tax and any existing life planning arrangements.
• Obtain up-to-date valuations to understand if a property is likely to fall within the new surcharge bands from 2028 onwards.
• Look again at Wills and succession plans where a high-value home forms a core part of family wealth.

These Budget 2025 property tax and business changes may also affect clients who own more than one property, including second homes and investment properties. Timing of sales, gifts to family members and transfers into or out of company ownership are all areas where tailored legal advice, alongside independent tax advice, can help manage longer-term risks and costs.

Minimum wage rise – what employers need to do

The Budget 2025 property tax and business changes also confirm significant increases to the minimum wage framework. The main rate, applying to workers aged 21 and over, will rise 50p to £12.71 per hour from April 2026, with larger percentage increases for younger workers and apprentices (workers aged 18-20 seeing an 85p rise to £10.85, and under-18s and apprentices getting 45p more to £8 an hour).

For employers, the rise in the National Minimum Wage and National Living Wage is not only a financial question but also a legal one. Businesses must ensure that no worker is paid below the new statutory minimum once the changes take effect, taking into account all working time and any deductions that might reduce take-home pay. Contracts, salary scales, overtime arrangements and benefits structures that appear compliant before April could fall short once the new thresholds apply, so now is a sensible time to review documentation.

Key contract and policy checks for employers

1. Audit all pay rates against the updated statutory National Minimum Wage and National Living Wage for each age band.
2. Review contracts, salary scales and overtime arrangements to confirm ongoing compliance after the new rates take effect.
3. Check commission, bonus, sleep-in and on-call arrangements to ensure workers do not fall below the legal minimum over pay periods.
4. Review any deductions for uniforms, equipment or accommodation that might affect whether the minimum wage is met.
5. Update written terms and staff handbooks where changes are required and consult with staff where contractual variations are needed.

Alongside these Budget 2025 property tax and business changes, employers may also wish to keep an eye on updated guidance on minimum wage compliance and business support. A reliable reference point for statutory rates and business support schemes is the UK government’s official guidance, available via the GOV.UK website.

Mileage tax on electric vehicles

Another notable measure is the planned introduction of a national mileage charge for electric vehicles. From April 2028, fully electric car drivers will pay a road charge of 3p per mile, while there will be a lower rate of 1.5p per mile for plug-in hybrids. This will sit alongside earlier changes that bring many electric vehicles into the standard Vehicle Excise Duty regime, gradually narrowing the tax difference between electric and conventional vehicles.

For businesses that operate electric company cars, vans or fleets, or that reimburse employees for business mileage in their own electric vehicles, this creates new legal and practical questions about how costs are allocated and recorded between employer and employee. Company car policies, fleet agreements and staff handbooks may need to be updated to address how the new mileage charge will be treated in the context of business journeys and private use.

Implications for business vehicle policies

• Review company car and fleet policies to decide how the new mileage tax on electric vehicles will be handled for business journeys.
• Update staff handbooks and expense policies to explain whether and how the mileage charge will be reimbursed.
• Clarify how business and private mileage will be recorded and evidenced for staff using electric vehicles.
• Consider whether current employment contracts are flexible enough to accommodate future mileage charges or whether formal variations are needed.

Businesses may find it helpful to monitor HM Revenue & Customs guidance and future HM Treasury updates about the detailed operation of the EV mileage regime. These official sources will be key for understanding how any new rules interact with corporation tax, VAT and other business tax considerations, which is another area where independent tax advice is recommended.

Other business-related headlines from Budget 2025

In addition to changes affecting property, wages and electric vehicles, Budget 2025 includes a wider package of support and reforms for businesses. These measures sit alongside the Budget 2025 property tax and business changes and may be particularly relevant for high street businesses, growing companies and employers investing in skills.

• Lower business tax rates for over 750,000 retail, hospitality and leisure properties through permanently lower business rates, designed to support high streets and local services.
• Ending low value import relief, closing customs arrangements that previously allowed some online retailers to import goods duty free, which is intended to create a more level playing field for UK-based businesses.
• UK Listing Relief, in the form of a three-year stamp duty reserve tax exemption for newly listed firms, aiming to boost liquidity and make the UK a more attractive listing venue for scaling companies.
• Additional funding to make training for under-25 apprenticeships completely free for small and medium-sized enterprises, supporting skills development and helping SMEs bring through younger workers.

These changes are largely tax and regulatory measures, but they have legal implications in areas such as commercial leases, supply contracts, and corporate transactions. For example, landlords and tenants in the retail, hospitality and leisure sectors may wish to review how business rates responsibilities are allocated in their leases, while growing companies considering a UK listing may want to factor UK Listing Relief into their broader corporate planning. As with other elements of the Budget, tax outcomes will depend on individual circumstances and specialist tax advice should be sought before making financial decisions.

How Fosters Solicitors can help

Budget changes often generate understandable concern, especially when they affect something as important as a family home, employees’ pay or a business’s core assets. Fosters Solicitors provides clear, approachable and practical legal support on the issues raised by Budget 2025 property tax and business changes, including life planning and estate documents, property and business ownership structures, and employment law matters.

For high-value property owners, this may involve reviewing ownership arrangements, declarations of trust and Wills in light of the High Value Council Tax Surcharge. For employers, it might mean updating contracts, policies and procedures to reflect higher minimum wage rates, the forthcoming mileage charge on electric vehicles and other employment-related changes. While Fosters Solicitors can advise on the legal aspects of these issues, clients should also take independent tax advice from a qualified tax specialist or accountant before making decisions that could affect their tax position.

Contact us for more information.

This article was produced on the 26th November 2025 for information purposes only and should not be construed or relied upon as specific legal advice.