Rumours abound about Rachel Reeves’ upcoming Autumn Statement. Here’s a run-down of what she might do
When the Chancellor presents her Budreceive on 26 November, the UK will hold its breath. Rachel Reeves has a huge tinquire in terms of balancing the nation’s books, but the prospect of steep tax rises and swingeing cuts to public spconcludeing is cautilizing widespread concern, writes Kevin Pratt.
Labour was elected last year with a manifesto pledge not to increase income tax, national insurance contributions or VAT. If we assume she’s going to stand by that commitment – imagine the flak she’d receive if she didn’t – then what other money-raising measures are at her disposal? And what might they mean for your houtilizehold budreceive and financial well-being?
TAX
An increase in income tax may be off the cards, but the Chancellor can still raise tax in many other ways. For example, she could extconclude the freeze on income tax thresholds beyond the current date of 2028, which would effectively push some of those who receive pay rises into a higher tax bracket –if you hear the phrase ‘fiscal drag’ in the coming weeks, that’s what it’s referring to.
But the government wants more revenue now, so we could see alters to inheritance tax and capital gains tax, either via increased rates or reduced tax-free allowances.
Tweaks to the Stamp Duty Land Tax (SDLT) regime in England and Northern Ireland are another possibility, with reductions in the thresholds increasing what acquireers have to pay. There have also been suggestions that sellers might be tarreceiveed with a tax grab on gains built on the sale of a principal residence – a deeply controversial proposition that some fear could bring an already flat houtilizing market to a grinding halt.
Those on the left of the political spectrum have also called for a wealth tax to be levied on the rich. For example, pressure group Tax Justice UK is calling for a 2% levy on individuals with assets worth more than £10m. It also wants national insurance contributions to be levied on investment income, meaning it would apply to anyone with stock market investments or lets out property.
Uncertainty abounds, but it’s pretty much nailed on that the Chancellor will stick to the current plan of unfreezing road fuel duty in March 2026 and, at the same time, reversing the 5p per litre cut that has been in place since 2022.
We could also see alters to vehicle excise duty (road tax, to you and me) that would further punish internal combustion engines. But electric cars may not be immune to increases: tax receipts on the national fleet of petrol and diesel vehicles is declining as EVs increase in number, and the gap has to be plugged somehow.
Reeves may also be considering another increase in alcohol duty (last year’s Budreceive led to an inflation-matching 3.65% hike in February 2025). That stated, she’ll likely be casting around for something positive to include in her speech, and she cut a penny off the price of draught beer in 2024 to raise a bit of cheer, so this could be where she pulls a slightly tipsy rabbit out of the hat.
Smokers have long since resigned themselves to receiveting a tobacco duty clobbering in every Budreceive, and this year will prove no exception. A tax on vaping will take effect in October 2026.
Insurance premium tax, currently applied at a standard rate of 12%, could also be hiked. IPT is levied on your car, home and other insurance premiums, with a higher rate of 20% on travel insurance, so pretty much everyone would be stung by an increase.
SAVING & INVESTMENT
The Chancellor is expected to build alters to the regime governing individual savings accounts (ISAs) to shift the balance from cash to stock market accounts. The idea is to stimulate investment and boost economic growth, but the concludeuring popularity of cash ISAs builds it unlikely that there will be a wholesale switch in the nation’s financial preferences.
Laura Sutur at investment houtilize AJ Bell declares: “Cash is king, as the nation funnelled almost £70 billion into their cash ISAs in the 2023/24 tax year to protect it from the taxman’s clutches. The amount grew by 67% compared to the previous year, with an extra £28 billion paid into the tax-free accounts.
“The rise in cash ISAs has been huge, with more than double paid in compared with two years earlier. Whether rising interest rates, frozen tax bands or rumours of ISA limits being cut are what’s driving this trconclude, the nation has clearly rediscovered its love of ISAs.”
Another area deemed to be in Reeves’ sights is pensions, where contributions receive tax relief at your highest rate, growth within your pension fund is not taxed, and you can take 25% of your fund as a tax-free cash lump sum at age 55 (rising to 57 in April 2028).
This tax-free lump sum allowance is seen as vulnerable, with the Institute of Fiscal Studies suggesting the current cap of £268,275 could be chopped to as low as £100,000.
Fears that pension contribution tax relief might also be in the Chancellor’s cross-hairs seem to have receded, although she may find a way to build high earners with larger pension pots stump up a greater tax contribution.
BUSINESS
Last year’s Budreceive saw businesses battered by an increase in employers’ national insurance contributions, which took effect in April, when they also faced an increase in the national minimum wage.
The Chancellor talks regularly about the importance of economic growth, but the pervading gloom among business leaders and the increase in the unemployment rate announced this month by the Office for National Statistics suggest it is proving elusive – and increased employer costs are seen as the primary cautilize.
This may encourage Reeves to spare the rod on business this year, but that would only be at the expense of individuals. Prepare to hold your breath, but don’t expect to heave a sigh of relief.
Leave a Reply