Autumn Budget 2025 – What Could Be Coming?

 

As the Chancellor prepares to deliver the Budget on 26 November 2025, uncertainty continues to build for businesses and individuals alike. Normally, the Budget comes in October, but this year’s delay has extended the period of speculation and left many waiting much longer than usual for clarity. Unsurprisingly, this has only heightened the sense of unease around what changes may be on the horizon.

At ETC Tax, we’re not aiming to predict the Chancellor’s exact announcements. Instead, we’re looking at the areas that are most likely to feature, so you can start to think ahead. Whether you are reviewing corporate structures, assessing your personal tax position, or planning future investments, considering the possible outcomes now may help you react quickly once the Budget is delivered.

 

Income Tax and National Insurance

There has been repeated discussion in recent months about the possibility of increasing income tax rates. At one point, reports suggested the Government was considering a 2p rise, alongside a further extension of the frozen thresholds through to 2030. Had this gone ahead, it would have marked the first change to the main income tax rates in decades.

To balance this, a matching 2p cut in employee National Insurance was reportedly under consideration. However, following the Chancellor’s recent comments ruling out an income tax rise, this reduction now appears unlikely.

Instead, the Government may prefer to continue increasing the tax burden on higher earners through fiscal drag. By keeping thresholds frozen while wages rise, more people are pushed into higher tax bands without any explicit rate increases – allowing ministers to avoid breaking their election pledge.

 

Inheritance Tax

Inheritance Tax is widely expected to play a central role in the upcoming Budget. The changes announced last year confirmed that unused pension funds and lump-sum death benefits will fall within the IHT net at 40% from April 2027. In addition, the scope of agricultural and business property relief was narrowed. With this direction of travel in mind, further reform would not be surprising.

Lifetime gifting remains one of the most effective ways to pass on wealth while reducing IHT, provided the donor survives seven years and gives up all benefit in the asset. However, several ideas have been floated that could restrict this area of planning, including:

• A potential lifetime gifting cap (possibly around £100,000)
• Limitations on taper relief for gifts made between three and seven years before death
• Extending the seven-year surviving rule to ten years
• Continuing the freeze of the £325,000 nil rate band until 2030
• Reducing the £175,000 residence nil rate band

For those with significant estates, such changes could mean revisiting existing planning or reconsidering strategies they had intended to implement.

 

Property Taxes

Property taxation is also expected to come under scrutiny. A range of possible measures has been reported, including changes to council tax, Stamp Duty Land Tax (SDLT), and even the introduction of a “mansion tax.” One proposal that has gained attention is an annual 1% charge on any excess in properties valued above £2 million, which would mean, for example, a £10,000 annual tax bill for a £3 million home

There has also been talk that SDLT may be abolished altogether or restructured, with liability shifting to sellers for properties over £500,000. The Institute for Fiscal Studies has warned that increasing property transaction taxes could harm the housing market by discouraging moves – particularly for those looking to downsize, upsize, or relocate for work.

Additionally, some reports suggest that council tax could be reformed, with extra charges applied to homes sold for more than £1.5 million. Taken together, these changes would significantly increase the cost of owning high-value homes and investment properties, which would be of particular concern to property investors and high-net-worth individuals.

 

Capital Gains Tax

Capital Gains Tax is another area under the spotlight. One of the more prominent ideas discussed is capping the private residence exemption for main homes. At present, individuals do not pay CGT when selling their main residence, but some commentators have suggested introducing a limit for higher-value properties – possibly in the £1.5 – £2 million range.

Other proposals that have surfaced include an “exit tax” for individuals leaving the UK and the removal of the CGT base cost uplift on death. Both measures would increase the tax burden on inherited or relocated assets. However, recent reports suggest these particular ideas may be unlikely to progress, partly due to concerns that they could discourage inward investment or deter internationally mobile individuals from coming to the UK.

 

Corporation Tax

While there is currently no clear suggestion that the main rate of corporation tax will rise, business owners may still see indirect increases through fiscal drag or changes to allowances and reliefs. These adjustments can have a material impact on company profitability and reinvestment decisions, so it will be important for business owners to pay close attention to the announcements.

On the VAT side, the registration threshold is expected to remain frozen at £90,000. With inflation pushing turnover levels higher, this freeze will inevitably bring more small businesses into scope.

 

Looking Ahead

With the Budget now only days away, significant uncertainty remains. We have focused here on the areas where speculation has been strongest and where any changes could have the most meaningful impact on businesses, property owners, and higher earners.

Once the announcements are made, we will be reviewing the details closely and sharing our insights. If you are considering how any of the potential changes could affect you, please get in touch with ETC Tax.