Autumn Budget 2025 What Rachel Reeves Could Announce and What It Means for UK Taxpayers

The upcoming autumn budget, set for 26 November 2025, is poised to become a vital moment for the UK government. Chancellor Rachel Reeves faces the pressing challenge of a ballooning government deficit, with borrowing hitting £18 billion in August—its highest point in five years. Reeves is under mounting pressure to tighten fiscal policy in light of the deficit overshoot, which now stands at £11.4 billion higher than the Office for Budget Responsibility forecast in the spring.

Speculation is intensifying around which measures might be announced to bridge the £20-30 billion gap needed to maintain a narrow margin of fiscal headroom. Key avenues under discussion revolve around wealth, property, and banking sector taxes, as Reeves has shown a clear intent not to raise VAT, income tax or national insurance rates that would directly impact working households.

A radical overhaul of the property tax system is firmly on the agenda. Scrapping council tax and stamp duty in favour of a progressive property tax on homes valued above £500,000 is under serious consideration. This would align tax liabilities more closely with current property values, particularly benefiting regions outside London and the southeast, which have seen the sharpest rises since the outdated 1991 council tax valuations. There is also speculation about removing capital gains tax exemptions on prime residences, meaning higher-rate taxpayers could face 24 per cent on property value increases and basic-rate taxpayers 18 per cent.

Landlords could soon face a national insurance charge on rental income, potentially raising around £2 billion annually. The proposal under discussion involves a basic rate of 20 per cent, with an additional 8 per cent for those earning above £50,270 from rental income—a measure that would take direct aim at property investors’ returns.

The banking sector awaits the budget with apprehension as the government may introduce a windfall tax on profits that banks accrue from placing reserves with the Bank of England. The Institute for Public Policy Research has recommended this step, which could generate £8 billion. The government could also increase the existing bank surcharge from 3 per cent to as much as 8 per cent, targeting surging bank profits in the wake of sustained high interest rates.

Frozen income tax thresholds are expected to be extended by at least one more year to 202930. This measure, dubbed a stealth tax by critics, pulls more earners into higher tax bands due to wage inflation and is forecast to bring in an extra £10 billion. Suggestions also exist for increasing income tax while offsetting this with lower employee national insurance, aiming to shift the tax burden without raising overall costs for workers. However, such a move is likely to be politically sensitive given previous manifesto commitments.

A new gambling levy is also likely to feature in the budget, potentially raising over £3 billion by targeting profits from online casinos, slot machines, and high-stakes betting. Sin taxes, such as those on alcohol and processed foods, remain persistently in the policy mix as Labour looks to raise extra revenue without direct income tax hikes.

This autumn budget is shaping up to be an eventful one, with sweeping changes to the tax landscape possible as the government strives to meet its fiscal targets while navigating the complex realities of public opinion and economic necessity. All eyes will be on Reeves as she outlines a new path for UK fiscal policy.