This week marks the point at which November becomes the earliest date the Chancellor can deliver the Autumn Budget. The Office for Budget Responsibility (OBR) must be given at least 10 weeks' notice to prepare its forecasts.
So far, the Labour government has revealed very little detail on what's coming, causing plenty of speculation. Estimates vary widely, with some commentators suggesting a funding gap of around £17 billion and others warning of a potential £50 billion “black hole” -The Guardian.
While we don't yet know the specifics, past trends and political commitments give some clues about which areas could see change. Here are some of the most talked-about possibilities:
Key areas under speculation
- ISA allowances
- Pension tax relief and salary sacrifice
- Inheritance Tax (IHT)
- Capital Gains Tax (CGT)
- Property and council tax reforms
ISA allowances
The Spring Statement confirmed the government is reviewing ISA reform possibilities to “boost the culture of retail investment” -UK Parliament. The current £20,000 (2025-26) annual allowance makes ISAs a tax-efficient way to save or invest. Any reduction to the allowance could be one lever the government uses to raise revenue.
Pensions and salary sacrifice
Salary sacrifice into pensions is a popular tax-efficient arrangement for employees and employers. However, the April increase in employer National Insurance has made this even more attractive.
The government could respond by:
- Capping the amount that can be sacrificed, aiming at higher earners.
- Removing the NI exemption on sacrificed salary altogether.
Either move would increase tax revenue but reduce the benefits of these arrangements.
Inheritance Tax (IHT)
One area that has come under a lot of controversy recently has been IHT where planned reforms already include:
- Changes to Agricultural Property Relief from April 2026.
- Bringing unused pension funds into the estate for IHT purposes from April 2027.
Given the complexity of IHT, the government may also seek to simplify or standardise the rules and make further cuts to tax-efficient IHT options. Anyone with significant assets should stay alert to how these changes might affect estate planning.
Capital Gains Tax (CGT)
Labour has pledged not to raise Income Tax, NI or VAT. That leaves CGT as one of the few areas where they have room to move.
Recent changes have already increased:
- Basic rate CGT from 10% to 18%.
- Higher rate from 20% to 24%.
- The annual exemption has also dropped dramatically from £12,300 to £3,000.
Whether further changes will follow remains uncertain, but CGT is one to watch.
Property and Council Tax
Reports suggest that the Labour government is exploring significant changes to property taxation. According to The Guardian, the Treasury is considering options such as introducing a new tax on homes sold for over £500,000 and undertaking a wider overhaul of council tax. These ideas form part of a broader Treasury review aimed at addressing the sharp rise in property values over recent decades. With council tax still based on early 1990s valuations, there are concerns it has become increasingly outdated and unfair.
What does this mean for you?
The lack of clarity is making many individuals and businesses nervous. While the full picture will emerge in the coming weeks, proactive tax planning can make a real difference.
If you're concerned about how these potential changes could affect you or your business, now is the time to review your situation. Waiting until after the Budget could leave you with fewer options.
We will continue to monitor announcements and share updates relevant to our clients. In the meantime:
If you have any concerns about tax rises or want to explore how to protect your finances, please get in touch. Our team is here to help you plan ahead.
Sources and useful links:
Financial Times
BBC
Simply Business
The Guardian
Moneyweek
Fidelity
UK Parliament