Autumn Budget 2025: Are Tax Rises on the Horizon?

Sarah Richards
Group Head of Tax for The Sedulo Group

Chancellor Rachel Reeves has warned of “harder choices” ahead of Labour’s Autumn Budget, in her speech at the party’s conference in Liverpool.

The numbers tell the same story. ONS figures show government borrowing in August was the highest in five years. Tax receipts had increased following Labour’s first Budget, but those gains were quickly swallowed by higher spending on public services, benefits and the spiralling cost of debt.

Economists are clear: if Reeves is to stick to her own fiscal rules, she will need either tax rises or spending cuts. And with services already stretched, the weight may fall on the tax side.

This November’s Budget is expected to lean heavily on stealth and wealth — extending freezes, tightening reliefs, and shifting the burden onto assets and property. But looking beyond 2025, the bigger picture is unavoidable: further tax rises could be on the horizon.

The Levers That Could Be Pulled

Income tax thresholds

• Frozen until 2028, with speculation of an extension to 2030.
• Fiscal drag is raising billions as more taxpayers are pulled into higher bands.
  → More people pay tax without official rate rises, pushing many into higher bands by stealth.

Capital Gains & property

• Restricting Principal Private Residence (PPR) relief on homes above £1m+.
• Further narrowing of the Annual Exempt Amount (now £3,000).
• Pressure to bring CGT rates closer to income tax rates.
• Options to reform SDLT into an annual property levy on high-value homes.
  → Higher effective tax on property sales and business disposals; expensive homes may face annual charges instead of one-off SDLT.

Inheritance Tax (IHT)

• Shorter taper relief on lifetime gifts.
• Caps on annual and small gift exemptions.
• Residence nil-rate band under review.
• Business & Agricultural Property Relief already due for reform in 2026.
  → Passing on wealth, businesses, and property will become more expensive, pulling more families into IHT.

Pensions & salary sacrifice

• Reduction of the 25% tax-free lump sum.
• Flattened relief at 20–25% across all savers.
• Salary sacrifice schemes likely to be restricted.
• Pensions brought into IHT from 2027 — possibly accelerated.
  → Less generous pensions and fewer planning options, with higher earners losing the most.

NIC expansion

• Rental income likely to be brought into scope (~£2.3bn potential yield).
• Older workers and pensioners may also be targeted.
  → Landlords, retirees and secondary earners could face new NIC bills on income not currently caught.

The Horizon: Overt Rises to Come

Stealth alone may not be enough to close a £50bn gap. The Institute for Government has warned that constant tinkering undermines confidence and increases complexity. That means the Chancellor may, in time, have to look at more direct options.

The MoneyWeek numbers highlight why these levers are attractive:

• +1p basic rate income tax = ~£6.9bn.
• +1p employee NI = ~£5.35bn.
• +1p VAT = ~£8.8bn.

With borrowing at a five-year high, and Reeves’ fiscal rules biting, these options may prove too tempting to ignore. From 2026–27 onwards, we could expect:

• 1–2p added to income tax rates.
• NIC extended to landlords and pensioners.
• CGT rates nudged closer to income tax.

My Take

This Budget is unlikely to touch the headline rates of the “big three” taxes, but it will not be quiet. Stealth measures on wealth, property, pensions and inheritance are expected to do much of the work.

Looking further ahead, borrowing pressures and Reeves’ own fiscal rules mean the government may not be able to rely on stealth alone. We could see overt tax rises from 2026–27 onwards — small changes to income tax, NIC or CGT that together deliver billions.

For founders, HNWIs, athletes and entertainers, the key isn’t second-guessing the precise measure. It’s ensuring your planning has the flexibility to adapt if, and when, those rules change.