Tax rises we may see in the Autumn Budget

With the Autumn Budget scheduled for 26^th November 2025, speculation is intensifying over where the Chancellor may turn to raise fresh revenue.

Economists have suggested the Chancellor may need to raise around £40 billion, and whilst the government has confirmed that headline rates of income tax, national insurance, and VAT for working households will not increase, attention is focused on other areas of the tax system where changes may be introduced.

The following summarises the key tax areas currently under discussion and potential implications for businesses, property owners, and higher earners.

Threshold freezes

The government may extend the freeze on income tax thresholds and allowances. This approach increases tax revenues over time as more individuals move into higher bands without changes to headline rates.

National Insurance and income tax adjustment

There has been discussion of reducing employee national insurance contributions while increasing income tax rates to offset the difference. This would broaden the base of income tax without affecting overall tax receipts.

VAT

Although the Chancellor has ruled out increasing the main VAT rate, adjustments to exemptions and reduced rates are possible. A more uniform application of VAT across food and drink categories has been suggested as one option.

Property taxes

Proposals have been reported to replace stamp duty and council tax with two new forms of land and property taxation:

• National land tax: applied to the sale of properties above a certain threshold, such as £500,000, based on value above that level.
• Local property tax: set by local authorities, based on up-to-date property valuations rather than historic council tax bands.

Mansion tax / capital gains on high-value homes

A measure under consideration is to remove the primary residence exemption for properties above a specified value (reported threshold example: £1.5 million). Under such a change, disposals of qualifying high-value main residences would become subject to capital gains tax (CGT). Reported features of this approach include:

• Application only where the property value exceeds the threshold.
• The requirement for sellers to calculate and report the gain on disposal.
• use of the annual CGT exemption (reported at £3,000) against gains before tax becomes payable.
• Existing CGT rates on residential property gains applying (reported rates: 18% for basic-rate taxpayers and 24% for higher/additional-rate taxpayers).

Pension tax relief

Standardising pension tax relief at 20% for all earners is frequently cited as a potential measure. This would reduce the current higher levels of relief available to higher and additional rate taxpayers.

Other potential areas

• Inheritance tax allowances could remain frozen, which would increase the effective burden over time.
• ISA allowances or rules around salary sacrifice arrangements may be reviewed.
• The possibility of national insurance being applied to rental income has also been raised.

Next steps

The Autumn Budget will provide clarity on which of these options the Chancellor intends to pursue.

Following the Budget, Verallo will be producing a comprehensive guide to the Autumn Budget and hosting an expert panel discussion. These resources will provide clear analysis of the changes announced and practical guidance on the implications for individuals, businesses, and investors.