Autumn Budget 2025 Tax Rises Loom

Date: July 1, 2025

Chancellor Rachel Reeves is under intensifying pressure to introduce further tax increases in the late October/early November 2025 Autumn Budget. This follows recent fiscal reversals and mounting public spending commitments, the changes to the Government Welfare Bill being the latest. With this, Autumn Budget 2025 tax rises are looking more certain. Published by Alexander & Co | Expert Chartered Accountants and Tax Advisors

Welfare U-turns fuel pressure for new Autumn Budget 2025 tax rises

After reversing planned disability and pensioner benefit cuts, which mainstream sources estimate to be worth an estimated £5 billion, Reeves is now working with an estimated narrowed fiscal margin of under £10 billion. Both the Institute for Fiscal Studies and the Treasury warn that, unless economic indicators improve, further tax rises in the Autumn 2025 are likely to be inevitable.

Freeze on income tax thresholds – hidden tax rises

Though Chancellor Reeves has pledged no further NI hikes, one route is through freezing income tax thresholds for longer. Previously signalled in Treasury reports, such freezes effectively raise income tax revenue by pushing more taxpayers into higher-rate bands. Early forecasts suggest extending this freeze through 2030 could generate roughly £7 billion annually.

Other Autumn Budget 2025 tax hike candidates: ISA, pensions, inheritance, CGT

Multiple consultations are currently in progress with draft legislation likely to be finalised later this year:

Capital Gains Tax reforms, including April 2025 changes to Business Asset Disposal relief and carried interest reforms, extending to April 2026
Inheritance Tax on agricultural property, currently protested by farmers since November 2024, with a 20% levy on estates over £1 million from April 2026.
ISA and pension tax relief adjustments, hinted at the Spring Statement reviews, potentially cutting tax-free allowance for high earners.
Stamp duty loophole closures, such as AIM share relief, under parliamentary consultation.

Past Budget increases: national insurance & energy profits levy

Reeves’s October 2024 Budget included £40 billion in tax hikes. National Insurance employer rates increased, and the Energy Profits Levy was raised to 38%. Additionally, inheritance tax rules were tightened, and landfill and vehicle duties rose. Whilst much is now law, implementation of these policies continues.

Timing: Autumn Budget 2025 tax rises are fast approaching

The Autumn Budget 2025 is widely expected around late October or early November, potentially between 28 October and 4 November. With that window fast approaching, both markets and the public await clarity on which taxes, including income, corporation, CGT, ISA and inheritance tax, could soon rise.

Why it matters: household budgets & business planning

Families and low‑income households: freezing thresholds and tweaking ISAs, pensions, or benefits could increase bills and reduce disposable income.
High-net-worth individuals and investors: with new CGT and carried interest regimes, further tax planning must reassess asset sales and structures.
Farmers and rural landowners: continued protests signal strong resistance to inheritance tax changes affecting agricultural estates. Further clarification on the proposed tax increases is likely to be published in the forthcoming months.
Businesses: Further National Insurance increases or corporation tax adjustments may dampen hiring and growth. The last increase has already negatively affected many businesses.

What to look out for with Autumn Budget 2025 Tax Rises

Final legislation on CGT and carried interest will be published later this year.
Proposed legislation on the changes to Inheritance Tax (IHT) regarding agricultural relief and business property relief. This has been subject to consultation, but detailed legislation is yet to be published.
ISA and pensions relief adjustments, especially for higher earners.
Defence spending pressures if defence outlays hit 5% of GDP. Whilst not in time for the Autumn Budget 2025, Keir Starmer has mentioned tax rises post 2029.

Summary

With welfare U-turns and public service costs increasing, late Autumn 2025 could bring a second wave of tax rises. These could be in the form of frozen thresholds, reformed CGT, tighter inheritance tax rules, and curtailed tax reliefs. Alexander & Co’s clients can expect a full breakdown on household impact, business response, and legislative timelines. We will provide these as they are known when proposals firm up around the late October/early November Budget. Pre-emptive planning may be beneficial. Please contact Alexander & Co if you would like to discuss how we can assist.