The Autumn Budget is scheduled for 26 November 2025, and promises significant uncertainty for taxpayers, business owners, and investors across the UK. Many of us will be watching with closely to see how Chancellor Rachel Reeves will balance fiscal challenges, earlier manifesto pledges and a rapidly changing economic landscape. 

Fiscal Pressures and Market Uncertainty

With rising borrowing costs, projected slower growth, and revised fiscal rules set last year, the government now faces a fiscal shortfall estimated at £20–£40 billion. 

The Office for Budget Responsibility may revise growth forecasts even further downward, which will intensify pressure for the Budget to balance the books as well as maintain the Chancellor’s credibility with investors and markets. 

Many experts argue that the Chancellor will need to send a decisive signal that tough decisions will be taken to meet current fiscal rules and avoid a crisis reminiscent of previous failed fiscal strategies. 

Preparing the Ground

The Chancellor appeared to prepare the ground in a recent speech in Liverpool when she said: ‘We will face further tests, with choices to come, made all the harder by harsh global headwinds and long-term damage to the economy, which is becoming clearer.’ Her remarks point to two key challenges:

• Global headwinds, including trade tensions, geopolitical conflicts and higher interest rates driving up borrowing costs.
• The UK’s persistent productivity problem, with the OBR expected to publish as critical reassessment of the country’s long term productivity performance.

The message from the Chancellor is clear; don’t be surprised if taxes rise, and don’t expect any giveaways.

Taxation: What Might Change?

While direct increases to Income Tax, National Insurance, or VAT appear unlikely due to those manifesto pledges, experts anticipate a strategic switch in the tax base and reforms that target perceived inequities: 

• National Insurance and Income Tax Shift: The Resolution Foundation proposes switching some National Insurance contributions to Income Tax, which it claims could raise £6 billion. It also advocates distributing the burden more evenly between employees and those with income sources that currently escape NICs, such as pensioners, landlords, and the self-employed. 
• Corporation Tax Enforcement and VAT Threshold: Growing unpaid business Corporation Tax and businesses intentionally sitting below the VAT registration threshold are also possible targets. Reducing the VAT threshold to £30,000 (from its current £90,000, about twice the OECD average) and stepping up enforcement on outstanding Corporation Tax could together raise around £4 billion annually over several years. 
• Property Tax Reforms and Wealth Taxes: There’s growing speculation about reforms to property taxes, with some experts suggesting a single annual levy on high-value homes, higher council tax bands, and even Capital Gains Tax (CGT) on primary residences above a set value. A ‘mansion tax’ or wealth tax continues to be discussed but faces opposition due to concerns around taxpayer flight and reduced investment. 
• Indirect Tax Rises and Frozen Thresholds: Even without headline rate increases, freezing tax thresholds would, as wages rise with inflation, draw more people and businesses into higher tax bands. Reviews of pensions, housing-related tax breaks, and certain business reliefs are possible—likely to be framed as closing “loopholes” rather than introducing new taxes.

Public Sector Productivity and Spending

The Institute for Fiscal Studies (IFS) has raised concerns about the government’s ambitious plans for public sector productivity improvements, which are essential for delivering service enhancements within tight financial constraints. 

Historically, productivity growth rates have lagged behind what is now required, especially in the NHS, making successful delivery of Budget promises dependent on unprecedented efficiency gains. Failure to achieve these could force the Chancellor to further supplement departmental budgets, which would strain fiscal targets. 

Reeves has also confirmed that the legally required biannual OBR forecasts could be altered, potentially moving to only one forecast each year. This could reduce mid-year instability when predictions fall short and speculation about tax changes escalates.

Addressing Concerns and Possible Scenarios

Stakeholders are asking how the Chancellor plans to resolve the fiscal black hole without breaching manifesto commitments to avoid tax rises and protect ‘working people’. 

Potential scenarios include: 

• Targeted stealth taxes such as freezing personal allowances and higher rate thresholds.
• Restricting salary sacrifice schemes and adjusting tax-free pension cash limits. 
• Gradual lowering of the VAT threshold, more aggressive collection of outstanding business taxes
• Indirect changes to property and wealth taxation. 

Conclusion

While we won’t have the answers until the Chancellor sits down on the 26^th November, the signs all point to a Budget that seeks revenue through indirect and targeted reforms rather than headline rate increases. 

Advisors and taxpayers alike should prepare for significant changes, especially regarding the VAT threshold, property tax, business tax enforcement, and pension rules. As always, we’ll be listening closely to the to the Budget speech and reviewing the small print before updating clients as quickly as possible. 

If you have any concerns about how the Autumn Budget might impact you, either before or after the Speech, please get in touch; we’re here to help. We (sadly) don’t have an inside line to Rachel’s desk, but are happy to help as far as we can!