Autumn Budget 2025 What Could Rachel Reeves Announce

Rachel Reeves stands on the verge of a potentially historic Autumn Budget as the government comes under intense pressure to tackle the nation’s fiscal challenges. With November’s statement looming, Treasury insiders suggest tax rises targeting higher earners and property owners are firmly on the table, even if it means breaking key manifesto pledges.

Labour’s general election manifesto promised no hike in income tax, national insurance or VAT. Yet both Chancellor Reeves and Prime Minister Keir Starmer have recently indicated a willingness to place the country’s financial stability above campaign commitments. Sources point to income tax as the most likely lever, with a one-penny increase across the board raising upwards of £8.3 billion, while a rise limited to the 40p higher rate would yield around £2 billion. Such moves risk a major political backlash, particularly as breaching tax promises gives opponents ample ammunition ahead of the next election.

Extending the freeze on income tax thresholds is considered a near-certainty. The current policy means that as wages rise, more workers are dragged into higher bands—a stealth tax that could raise an additional £10 billion if extended to 2029-30. This method has a lower political cost and Labour argues it does not formally breach manifesto pledges on tax rates themselves.

Reeves is also debating a “two up two down” approach: raising income tax by 2p while reducing national insurance by the same amount. This would maintain effective tax rates for most employees but increase the tax burden on pensioners and those with investment income, potentially raising £6 billion. Pensioners and wealthier landlords would lose out, though Reeves could argue that working people are protected by such a manoeuvre.

Significant “mansion tax” reforms are under consideration, with council tax hikes for the most expensive properties. Doubling council tax on the highest bands alone could generate £4.2 billion. Charging capital gains tax on primary residences appears less likely, and a broader wealth tax remains off the table. Labour’s support base is likely to welcome higher taxes on luxury homes, making this one of the less risky proposals politically.

The legal and accounting professions could also face a new tax raid, closing loopholes in limited liability partnerships to raise as much as £2 billion. This is likely to attract little public sympathy, though experienced professionals may seek new strategies to minimise their exposure and the impact on the City’s global competitiveness remains an open question.

The Treasury is weighing a new gambling tax, potentially targeting online casinos and high-stakes betting to raise around £3 billion, though exemptions for horse racing and uncertainty around revenue mean this may be less lucrative than first assumed. Energy bills may be in line for a VAT cut, while proposals to force landlords to pay national insurance on rental income are being mooted, though such measures could increase rents and fuel inflation.

Banks, awash with bumper profits from three years of higher interest rates, are rumoured to be in line for a potential surcharge increase, possibly raising between £1 billion and £2 billion. This measure would be popular with the public yet may complicate the City’s attraction as a financial centre.

The Autumn Budget 2025 therefore presents Chancellor Reeves with a daunting balancing act—raising billions for public services and economic recovery, while navigating fierce political opposition and breaking some of Labour’s most prominent election promises.