Key Insights for the Autumn Budget 2025: What to Anticipate

Introduction to the Autumn Budget

The 2025 Budget is set for Wednesday 26 November and will reveal the UK government’s plans for taxation, spending plans, and strategies to boost economic growth. This year's Budget will focus heavily on the state of the UK’s finances, with discussions around potential tax rises. This could include changes to income tax thresholds, Insurance Premium Tax (IPT), and council tax.¹

The government’s commitment to budget responsibility and adherence to fiscal rules will be central themes.¹ Small businesses and the self-employed should pay close attention, as the budget could impact business taxes, property tax, and other levies that affect day-to-day operations.¹

Taxation Overview

The upcoming Budget is expected to introduce tax changes aimed at helping the government raise revenue and manage the UK’s finances. Key areas under review include:¹

• Income tax: Possible adjustments to income tax thresholds could mean more people moving into higher tax brackets due to fiscal drag.
• Capital gains tax: Changes may affect those with rental income or investments in buy to let properties.
• Tax relief: Adjustments to tax relief schemes, including those related to pension contributions and salary sacrifice, may be introduced to raise additional revenue.

These changes aim to raise money while supporting economic growth and ensuring fairness in the tax system.

Capital Gains and Wealth

The 2025 Budget may bring significant changes to capital gains tax and wealth tax policies:¹

• Capital gains tax rates and tax thresholds could be altered, particularly affecting the housing market and owners of buy to let properties.
• While a wealth tax remains less likely, reports suggest that there could be a chance we see a new form of property tax.
• Inheritance tax rules may be reviewed, potentially changing thresholds and rates to raise additional revenue.
• Tax rules around pension funds might also be updated, impacting how wealth is transferred and taxed.

These measures could influence investment decisions and property ownership, especially for basic rate taxpayers and those in higher tax brackets.

Fiscal Policy and Responsibility

The government’s fiscal policy² will be a key focus, with an emphasis on:

• Balancing the budget and reducing national debt.
• Following fiscal rules to maintain budget responsibility.
• Supporting UK growth through targeted spending and tax policies.

The Budget Responsibility Act guides these decisions, ensuring that the government’s spending plans are sustainable. This is particularly important for small businesses and hospitality businesses that rely on a stable economic environment.

Local Taxes

Local taxation is also expected to see changes:

• Council tax and business rates may be adjusted, with potential changes to tax thresholds and tax rates.
• Stamp duty land tax and other property tax measures could be reviewed to support the housing market.
• Local authorities might gain more power to set rates and retain tax revenue, helping them manage departmental budgets more effectively.

These changes could affect both homeowners and small businesses, especially those with property holdings.

Housing and Property

The housing market³ will be a key area of focus:

• Possible increases to and changes to stamp duty for buy to let properties and second homes.
• Measures to increase the supply of affordable housing and support first-time buyers.
• Potential tax increases aimed at rental income and property investors.

Such changes aim to balance the needs of the housing market while ensuring the government can raise additional revenue.

Business and Investment

The Budget will outline plans to support businesses and encourage investment in the year ahead:⁴

• Possible reductions or adjustments in corporation tax, business taxes and other taxes.
• Increased tax relief for research and development to foster innovation, which aligns with the economic policy goals of the current labour government.
• Support for entrepreneurship and small businesses through targeted incentives. This will be crucial, as the government seeks to balance raising extra revenue without discouraging investment.

These measures are designed to stimulate economic growth and help businesses navigate the challenges of tax increases. These could influence how businesses and individuals plan their finances. They reflect the government's broader strategy to improve government finances while fostering a competitive business environment.

Pension and Inheritance

Changes to pensions and inheritance tax are anticipated. The Budget could see changes such as:⁵

• Adjustments to pension tax relief and inheritance tax thresholds, which may include reconsideration of the lifetime cap.
• Review of tax rules for pension funds.
• A continued freeze on certain thresholds is also under discussion, which could impact how much tax individuals pay on their pensions and inheritances.

Such a change would have significant implications for wealthier individuals and those planning for retirement in the near future.

Autumn Budget Expectations

The 2025 Budget is expected to:

• Introduce tax rises and spending cuts to manage the UK’s finances.
• Emphasise fiscal policy and budget responsibility.
• Have wide-reaching effects on individuals, small businesses, and the broader economy.

Budget 2025 Key Takeaways

• The Budget 2025 will be crucial for the UK’s economic future.
• Expect tax rises, spending cuts, and technical changes.
• The government will focus on balancing growth with fiscal responsibility.¹

Budget Preparation

Individuals and businesses should:

• Prepare for potential tax increases and spending cuts to public services.
• Engage in tax planning and financial management ahead of the budget day.
• Monitor announcements closely to adapt to new tax rules and policies.

Budget Responsibility Act

The Budget Responsibility Act⁶ underpins the government’s fiscal approach:

• It commits to balanced budgets and sustainable public finances.
• The Budget will test the government’s adherence to these principles.

Sources

1. saffery.com/autumn-budget-2025-what-to-expect
2. bma.org.uk/budgets-and-fiscal-events
3. adkinspropertygroup.co.uk/housing-market-is-in-holding-mode-until-autumn-budget
4. grantthornton.co.uk/autumn-budget-2025-what-to-expect
5. fidelity.co.uk/what-can-we-expect-in-the-autumn-budget
6. legislation.gov.uk/ukpga/2024/24