It is once more time to turn from sunny thoughts of summer holidays to dark contemplation of the Autumn Budget.
In July 2024, Rachel Reeves made her contentious House of Commons statement about the “£22 billion black hole” and, as one of the measures to fill it, severely restricted pensioner entitlement to the Winter Fuel Payment. One consequence of her ‘discovery’ was that the rest of that summer and the first part of autumn was full of speculation about what tax rises would be contained in the 2024 Autumn Budget.
Fast forward a year and there is a similar story playing out. The Winter Fuel Payment features again, but this time it is the £1.25 billion cost of the climbdown on means-testing that matters. To that can be added about the £5 billion expense of another reversal of policy, reform of disability benefits. This new black hole, alongside slowing economic growth, is generating a fresh round of speculation examining what taxes might be increased.
The Chancellor continues to rule out increases to income tax, national insurance and VAT for ‘working people’, leaving potential targets such as:
- A further freeze on income tax allowances and bands: The personal allowance and income tax thresholds were originally frozen for four years (2022/23–2025/26) by Rishi Sunak, to which another two years were added by Jeremy Hunt. Rachel Reeves could extend the freeze until April 2030.
- Pension contribution tax relief: A regular candidate for revenue-raising, so far, most Chancellors have merely nibbled this low-hanging fruit. Were Rachel Reeves to be bolder and, for example, introduce a flat rate of relief for all contributions, this could generate billions from the ever-growing number of higher and additional rate taxpayers.
- A wealth tax: This idea was resurrected recently by Neil Kinnock, a former Labour leader, and to date, the government has studiously refused to rule out the possibility. In practice, wealth taxes have proved difficult to administer and many countries have abandoned them. As if to underline the problems, according to a July 2025 report from the House of Commons Public Accounts Committee, “HMRC has no overview of an individual’s total wealth and faces challenges in getting all the data it needs to risk assess and target wealthy people”.
If your personal finances have not had a recent review, it could be a good move to take stock and make any necessary adjustments before autumn progresses too far.
The information contained within this article is for guidance only and does not constitute individual financial advice.
Tax treatment varies according to individual circumstances and is subject to change. The Financial Conduct Authority does not regulate tax advice.
Content correct at time of writing.