As summer starts to fade, another Autumn Budget approaches… but what changes to UK tax rules can we expect the Chancellor of the Exchequer to announce this autumn?
Last year, Chancellor Rachel Reeves made statements about a £22 billion ‘fiscal black hole’ that she believed should be filled by restricting benefits like the Winter Fuel Payment for pensioners.
This led to a lot of speculation about tax rises ahead of the 2024 Autumn Budget, which is happening again a year later after no tax increases were featured in the 2025 Spring Statement.
This year, on top of slow economic growth, the £1.25 billion cost of backing down on means testing the Winter Fuel Payment and the £5 billion expense of reversing the controversial disability benefit reforms are driving the most recent round of speculation on possible tax changes.
Expected by early November, here are some of the tax announcements that could be on the table.
Potential tax updates in Autumn 2025
As the Chancellor has ruled out increasing Income Tax, National Insurance, and VAT for workers, this leaves the following targets for potential tax updates:
- Income Tax freeze – Originally frozen from 2022 to 2026, then extended to 2028, the Chancellor could further extend the allowance and threshold freezes until 2030.
- Pension contribution tax relief – Introducing a flat relief rate for pension contributions would be bold, but could generate billions from higher and additional rate taxpayers.
- Wealth Tax – Former Labour leader Neil Kinnock recently brought back the idea of introducing a wealth tax, which hasn’t been ruled out yet by the Labour government.
Extended freezes to encourage fiscal drag seem most likely, while a wealth tax seems less likely – as a recent report by the House of Commons Public Accounts Committee stated that gathering all the data needed to assess an individual’s total wealth is currently too difficult for HMRC.
Time to review your personal finances?
Have you reviewed your personal finances yet this year? If not, this could be a good time to take stock of your financial circumstances and make adjustments ahead of the next Autumn Budget.
It may be extremely beneficial to consult a professional tax adviser, who can help you take inventory of your savings, investments, and assets and guide your future tax plans.
Our knowledgeable accountants in Barnsley are here to assist with tax planning that uses allowances wisely, helping you reduce your tax liability while complying with HMRC’s rules.
For business or personal accounting support, contact the team at gbac by calling 01226 298 298, or email us at info@gbac.co.uk and we will be in touch soon with more information.