Investing tax-efficiently
The complex world of tax on investment
The UK tax system has grown increasingly elaborate. With tax increases in the last two Budgets totalling over £67 billion, the complexities are growing ever greater. This guide offers a brief outline of how your investments are currently taxed and future changes (or freezes) that have already been announced, including those set out in the Autumn Budget 2025. The challenges of recent years have led successive Chancellors (and their Scottish counterparts) to take significant steps to raise revenue.
As result:
- Many personal tax allowances and bands are now frozen until April 2028, despite inflation having peaked at over 11% in October 2022, in the first tax year of the freeze.
- There was a six percentage point jump in the main rate of corporation tax from April 2023.
- Since April 2023, the starting point for additional rate tax (top rate in Scotland) has been £125,140, nearly £25,000 below the previous (frozen) level.
- In Scotland a further 1% was added to the higher and top rates from 2023/24 and another 1% to top rate in 2024/25, taking them to 42% and 48%. Scotland also saw the introduction of a new 45% ‘advanced rate’ of tax for income between £75,000 and £125,400 in 2024/25.
- The tax rate on property income, interest and other savings income will increase by two percentage points from 2027/28.
- Following the Autumn Budget 2025, the tax burden is on course to reach 38.3% of GDP by 2030/31, a historic high and 5.4 percentage points above the pre-pandemic figure of 32.9% in 2019/20.
Expert advice is necessary if you require more information or a greater insight into how to cut your share of the growing tax burden.
