What the Autumn Budget 2025 means for SPOA members

On 26^th November 2025, Chancellor Rachel Reeves delivered her second Budget to Parliament. Here is everything you need to know as a plant or machinery owner:

• New 40% First-Year Allowance on plant and machinery

From 1^st January 2026, companies, sole traders and partnerships can write off 40% of the cost of new, qualifying plant and machinery in the first year. This includes diggers, telehandlers, rollers, survey kit and other equipment, whether it’s used in-house or hired out.

• Reduced annual depreciation relief on remaining assets

For equipment not written off immediately, the Writing-Down Allowance (WDA) for main rate plant and machinery reduces from 18% to 14% from April 2026. This affects older machinery and second-hand plant, which will now attract slower annual tax relief.

• Continued Annual Investment Allowance (AIA), full expensing for eligible investments

For businesses investing under the AIA threshold or using full expensing provisions where applicable, these remain in place, giving flexibility depending on the assets purchased.

• Impact on older or second-hand equipment

Because relief is less generous for second hand machinery, older fleets could become less financially attractive compared with investing in new kit.

• Cash flow and investment opportunities

For businesses planning upgrades or expansion, the upfront 40% FYA can ease cash flow, reduce the tax burden in the purchase year, and improve return on investment, making 2026 a strategic time to invest.

• Labour costs and wage pressures

With inflation and cost of living pressures continuing, wage costs remain in the spotlight. Rising employment costs such as National Insurance and other employer contributions remain a concern for the plant sector. 

• Dividend income

From April 2026, dividend income will see a 2%-point rise to the ordinary and upper tax rates. 

• Changes to salary sacrifice for pensions

From April 2029, the amount that is exempt from the National Insurance contributions (NICs), will be capped at £2,000 a year for employee contributions made via salary sacrifice.

• Electric vehicle owners to face pay per mile tax

From April 2028, electric car drivers will pay a road charge of 3p per mile, while plug in hybrid drivers will pay 1.5p per mile, with rates going up each year with inflation.

Click here to access the full guidance document produced for members.​​​

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