Income tax: Why it’s back in the spotlight ahead of the Autumn Budget

With the Chancellor due to deliver the Autumn Budget on 26h November, one topic is once again taking centre stage – income tax.

It’s a subject that affects almost everyone, yet few of us think about how it really works and potential change impact until Budget season comes around.

Simply put, income tax is what we pay on the money we earn – from jobs, self-employment, property, pensions, or savings. Most of us have it taken automatically through PAYE, while others pay through self-assessment each year.

Right now, you can earn up to £12,570 before paying any tax. Above that, the rate increases in steps – 20%, 40%, and 45% for those in England, Wales, and Northern Ireland. Scotland operates its own slightly different system.

Even though tax rates haven’t changed recently, many people are still paying more. That’s because the personal allowance and tax bands have been frozen since 2021. As wages rise with inflation, more people are being pushed into higher tax brackets, a quiet process economists call ‘fiscal drag.’ It means the government’s tax take can increase without official rate rises.

Ahead of this month’s Budget there’s plenty of speculation about what the Chancellor might announce. Some expect a small cut to ease the pressure on middle earners; others believe any changes will be modest, aimed at showing fiscal responsibility rather than headline-grabbing giveaways.

Whatever happens, changes to income tax could potentially affect take-home pay, business planning, and the overall health of the economy.

Once the Budget is announced, Verallo will cut through the noise with a free, easy-to-digest guide explaining every major change and what it really means for you.

We’ll also share a recorded expert panel discussion, giving you real-world insight and practical steps to help you plan with confidence.

Our goal is to ensure you don’t just hear the Budget headlines but understand their true impact.

If you have a question in the meantime or would like to speak to our tax experts, visit www.verallo.com or call us on 0203 912 9933.