The Autumn Budget 2025, scheduled for Wednesday 26 November, comes at a challenging time for the UK economy. With increased government spending on defence and welfare, a potential fiscal gap approaching £50 billion, and slow economic growth, the Chancellor faces pressure to raise revenue while supporting households and businesses.

Servicing the country’s existing debt costs over £100 billion per year in interest, and there is little sign of a clear plan to reduce the debt-to-GDP ratio. This combination of rising costs and fiscal uncertainty means both businesses and individuals could see changes affecting their finances.

autumn budget 2025

Why tax rises are being discussed

The government has stated in its election manifesto that they won’t raise headline income tax, National Insurance (NI), or VAT rates, but the scope of these taxes could be widened. For example:

  • Older workers or landlords may be required to pay NI

  • VAT registration thresholds could be adjusted

Some pressure groups are calling for a 1p or 2p increase in income tax to cover gaps in government funding. With rising inflation, high interest rates, and growing business costs, any extra taxes are likely to be particularly sensitive.

A recent reshuffle also placed key Treasury advisers closer to the Prime Minister’s office, potentially influencing Budget strategy. The delay from October to November adds further uncertainty, prompting businesses and households to hold off on major decisions until clarity is provided.

It is considered very likely that the government will break one or two of their manifesto pledges this autumn.

The most logical tax rise would be to return NI rates for the self-employed and employees to what they were pre-Covid. These rates have been tinkered with over the last five years, and the main rate is now at its lowest since 1981. However, this is probably unpalatable, as NI is only paid by “working people”, not on investments like property, pensions, or other investment income.

There are currently two schools of thought circulating in the rumours. One: the government could increase Income Tax rates and scrap NI altogether, so they can claim working people aren’t paying more when the two are combined, while investment income takes a hit. Pensioners are unlikely to be happy with this, and it has already caused a U-turn in the last 12 months when they expressed their displeasure.

The other possibility is that the government might extend the income that is subject to NI, which, of the two options, might be relatively simpler to achieve.

In our view, scrapping NI completely would be such a large undertaking that it would take several years to prepare the groundwork in the tax system. But stranger things have happened!

Below, we list the items we are hearing whispered about. It’s all rumour, though!

Key areas we may see changes

1. Income Tax and National Insurance

  • Threshold freezes may be extended beyond 2028, dragging more people into higher tax bands through “fiscal drag”

  • A small increase in the main rate of income tax (1–2p) is rumoured, possibly alongside minor adjustments to NI

  • These measures could impact employees, self-employed individuals, pensioners, and landlords

  • Possible extension of NI to include pension income, those older than state pension age, and possibly rental income

  • There is always a risk that dividend taxes could be increased (the current rates are unusual and stand out as needing reform), although we would expect the £500 tax-free allowance to remain

2. Inheritance Tax (IHT)

  • Potential reforms include lifetime gifting limits, taper relief adjustments, and freezing or reducing nil-rate bands

  • Changes could increase the tax cost for families passing on wealth, particularly through property or pension arrangements

  • If the government is desperate for a vote winner, removing some previously announced IHT changes is possible, but this would likely be offset by increases in another area of tax

3. Property and Wealth Taxes

  • Rumour suggests they are considering applying NI (or a version of it) on rental income, which would likely make rental income part of an individual’s “net relevant earnings” for pension contributions too. No change is simple!

  • Discussions continue about council tax reform, a mansion tax, or adjustments to Stamp Duty Land Tax

  • A tax on land values rather than buildings is also being debated

  • There are some rumours that reducing stamp duty on “average” value properties could unlock economic growth but will the Treasury be brave enough to implement it?

  • While an annual wealth tax remains unlikely, property-related changes could affect many business owners

4. Capital Gains Tax (CGT)

  • CGT rates were increased last year (18% / 24%) and may be aligned with income tax rates

  • Any rise could influence investment decisions and property sales, potentially affecting wealth management strategies

5. Landlords and Rental Income

  • NI could be applied to rental income, increasing costs for landlords and potentially impacting rental prices

  • HMRC’s Making Tax Digital system (from 2026/27) will make tracking rental income much more straightforward

6. Pension and ISA Changes

  • Proposals include reducing or removing the 25% tax-free lump sum from pension withdrawals and adjusting pension tax relief. These are generally seen as unlikely, as the government wants to encourage everyone to save in pensions to wean the country off the state pension as the state pension age gradually increases

  • Cash ISA allowances could be cut, encouraging investment in taxable equities

7. Corporation Tax and Business Rates

  • The main rate of corporation tax (25%) is expected to stay, but the lower rate for small businesses could be reviewed

  • Business rates may be permanently reduced for retail, hospitality, and leisure properties, with broader reforms possible to encourage business expansion

8. Fuel Duty, VAT and Other Charges

  • The fuel duty freeze ends in March 2026; its removal would increase transport costs

  • VAT registration thresholds could be lowered, bringing more small businesses into scope

  • Limited changes to VAT rates or reduced/zero rates are possible, while increases in the headline rate seem unlikely

  • Employers should start preparing for National Living Wage (NLW) increases in April 2026, which will impact payroll costs, particularly for businesses with a large low-paid workforce

  • “Sin taxes” on alcohol, sugar, tobacco, and fuel are also likely to increase, hitting households directly while helping the Treasury raise extra revenue

Budget & Beyond – What’s next?

On 3rd December, join Josh Curties BA(Hons) FCA and Emma White FCA, Co-Managing Partners at A4G, for Budget & Beyond – What’s next?, a 25-minute insight-packed presentation covering the Autumn Budget 2025, likely tax changes, Inheritance Tax (IHT), BADR, and practical steps for your business.

Then, toast the festive season and the final event of A4G’s 30th year with bubbles, wine, canapés, and networking with fellow business owners.

Why attend?

  • Clarity beyond the headlines: Understand the real implications for your business, personal finances, and upcoming NLW changes

  • Short, sharp, actionable insights: 25 minutes of expert guidance you can implement immediately

  • Network and celebrate: Make connections, share insights, and enjoy a relaxed festive atmosphere

Spaces are free but limited reserve your place today to ensure you don’t miss out.

[Reserve my free ticket]

Looking ahead: After the Spring Statement in April 2026, we’ll host a longer, 1-hour session with insights from our experts and a guest speaker from the Bank of England. Full details coming soon.

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Josh Curties

BA (Hons) FCA

Co Managing Partner

01474 853856

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