UK Budget 2025: What to Expect from Rachel Reeves’ Autumn Statement
- Adon Beddoes
- 5 days ago
- 4 min read
With the UK Budget now confirmed for 26 November 2025, speculation is mounting over how Chancellor Rachel Reeves plans to fill the widening fiscal gap. As borrowing hits a five-year high, Labour faces growing pressure to deliver its promise of economic growth while keeping taxes “fair” and protecting “working people.”
Below, we outline the key areas likely to be targeted — and what they could mean for households, investors, and expatriates with UK assets.
1. The Big Picture
UK government borrowing reached £20.2 billion in September, the highest since the pandemic. Persistent inflation, rising debt costs, and the challenge of funding Labour’s growth agenda have narrowed Reeves’ options.
While both the Prime Minister and Chancellor have avoided ruling out tax rises, their language now suggests previously untouchable areas — such as income tax and VAT — may be back in play. The Chancellor has made clear that those with the “broadest shoulders” should expect to contribute more.
2. Possible Income Tax Changes
A headline increase of 1p on the basic rate of income tax could raise around £8 billion, marking the first such rise since the 1970s.
An alternative proposal — cutting National Insurance by 2p while increasing income tax by the same amount — would shift the tax burden toward pensioners, landlords, and the self-employed (groups not paying NI). This could raise around £6 billion, while allowing Labour to claim it hasn’t raised taxes on “working people.”
3. ISA Reforms: Encouraging Investment Over Savings
The long-standing £20,000 ISA allowance may be split, with a lower cap for cash ISAs (rumoured between £4,000 and £10,000) and the full allowance retained for stocks & shares ISAs.
The goal is to redirect the £300 billion held in cash ISAs toward UK-listed companies. Critics warn the move could make mortgages more expensive, as building societies rely on cash deposits for lending — and that it may simply push savers into taxable deposit accounts.
4. Limited Liability Partnerships (LLPs)
High-earning professionals using LLP structures — such as lawyers, doctors, and consultants — could face new charges. Partners are currently exempt from employers’ National Insurance, costing the Treasury an estimated £2 billion annually. Reeves is reportedly considering closing this “accident of history.”
5. Pensions Under Review
Although Labour has pledged to maintain the State Pension triple lock, the Chancellor may look elsewhere for pension-related revenue:
Tax-free lump sums: Think tanks like the Fabian Society have proposed cutting the 25 % allowance by two-thirds, potentially raising £2 billion.
Tax relief reform: Replacing higher-rate relief with a flat-rate system could generate substantial savings and is viewed as “fairer” by many economists.
Salary sacrifice scrutiny: Technical adjustments could reduce the efficiency of pension contributions for higher earners.
6. Inheritance Tax (IHT) Adjustments
From April 2027, private pension pots will be subject to 40 % IHT, and reliefs for farmers and business owners will tighten.
Reeves may also:
Introduce a lifetime gifts cap, limiting how much wealth can be passed on tax-free.
Extend the freeze on the nil-rate band (£325,000) to 2030 — a stealth tax worth billions.
Review the residence nil-rate band (£175,000), potentially exposing more property wealth to IHT.
7. VAT and “Stealth” Tax Freezes
Despite campaign pledges, a VAT rise can’t be ruled out. Labour could instead expand the scope of VAT by removing exemptions or tightening reduced-rate categories (such as gambling, zero-rated goods, or certain services).
Meanwhile, frozen income tax thresholds continue to act as a silent revenue driver. The freeze until 2028 is expected to generate £39 billion by 2030, and extending it would be a politically quiet way to raise more.
8. Property and Wealth Taxes
Labour may consider a property-value-based annual tax, potentially replacing council tax. A “mansion tax” on homes worth over £2 million, or CGT on primary residences, is also rumoured.
Other property ideas on the table include:
Replacing stamp duty (paid by buyers) with a sellers’ tax on homes above £500,000.
Exploring a land value tax, which economists say could promote fairness but risk property-market instability if introduced too quickly.
9. Landlords and National Insurance
A new National Insurance charge on rental income is being explored. Aligning tax rates between earned and rental income could raise around £2 billion, though many landlords now operate via limited companies — potentially blunting the impact.
10. Fuel Duty and Environmental Taxes
While Labour’s green credentials remain strong, the freeze on fuel duty — costing over £3 billion annually — may be extended again to avoid adding inflationary pressure. The Chancellor will likely tread carefully to avoid backlash from commuters and small businesses.
11. Wealth Tax: Unlikely but Not Impossible
A formal wealth tax remains a “non-starter” in Cabinet, despite support from some Labour backbenchers and campaign groups. History is not on its side — most countries that introduced wealth taxes later scrapped them.
Still, Reeves’ emphasis on “fairness” means the ultra-wealthy can expect continued scrutiny, particularly on offshore holdings and non-dom residency.
What It Means for You
Whether you’re based in the UK or abroad with British assets, the November Budget could reshape how income, pensions, and property are taxed. Those with ISAs, pension pots, or UK property holdings may wish to review their portfolios ahead of the announcement to ensure flexibility against potential tax changes.
Final Thoughts
With the fiscal gap widening and economic growth still subdued, Reeves faces an unenviable balancing act: protecting Labour’s core voters while stabilising the public finances.
For advisers, investors, and expatriates alike, November 26 will be a pivotal moment in shaping the UK’s financial landscape for years to come.
Stay Ahead of the Budget
With significant tax and policy shifts on the horizon, now is the time to review your financial strategy. Our advisers at Max Foresight can help you understand how the upcoming Budget could affect your income, pensions, and long-term plans — and ensure your wealth remains structured efficiently, wherever you are in the world.
Book a confidential review today to prepare your portfolio before November 26.
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