What to expect from the Autumn Budget 2025

Mark your financial calendars; November 26 will see UK Chancellor of the Exchequer Rachel Reeves reveal the much-anticipated Autumn Budget 2025.

The budget arrives against a troubled economic backdrop. Government borrowing in August hit the highest level for the month in five years, while debt interest spending is expected to exceed £111 billion in 2025-26.

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As a result, many anticipate a rise in taxes to meet Reeve’s previously announced fiscal rules, which she called “non-negotiable”. So, what can we expect from the upcoming Autumn Budget?

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Tax hikes, with limitations

New tax rates are a near certainty as the government seeks to slow a growing deficit. The question is, who pays them? Labour has already pledged not to raise VAT, income tax rates, National Insurance, or the main rate of corporation tax. That leaves Reeves with limited options.

·       Capital gains tax (CGT) could be set to rise, with some suggesting an alignment to income tax rates. The current top rate of CGT sits at 24%, well below the 45% top rate of income tax.

·       Inheritance tax (IHT) has also been touted for a possible increase. The government has already pushed through changes to IHT to increase revenue, including the tax on inherited pensions that’s due to land in April 2027. Some expect the upcoming budget to target exemptions and reliefs, including a cap on the value of gifts individuals can give until their death.

·       Property taxes are also in the spotlight amid slowing house price growth. Reports suggest a possible overhaul of stamp duty and other property taxes to both raise funds and stimulate the market.

·      A wealth tax could also be levied, with some senior figures in the Labour Party voicing support for the same. The move’s not without risk, though. Britain has already seen a flight of wealth out of the country following last year’s changes to the non-dom rules.

Growth-focused measures for businesses

The government’s interim report on business rates made clear the system needs ongoing reform. Investment, growth, and modernisation are also outlined as key priorities. Because the headline rate of corporation tax is unlikely to change, Reeves may instead focus on allowances, reliefs, and incentives. Targeted relief could be simplified as a step towards incentivising greater investment in key industries.

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Additionally, new rates for retail, hospitality, and leisure businesses will be confirmed in November, before arriving in April 2026. That’s part of a package of reforms designed to support Britain’s high streets, as announced in the Autumn Budget 2024.

Meanwhile, SMEs expect some form of financial relief to help boost their own purses. That could include energy cost relief alongside investments in digital transformation to support modernisation.

How can businesses prepare for the Autumn Budget 2025?

Although the exact details of the Autumn Budget won’t be known until November 26, businesses can take steps to ready themselves and react effectively.

·       Speak to your advisers early: Your tax advisers and accountants are best placed to help you anticipate and interpret the impact of the Autumn Budget 2025. Reckon has in recent months guided many of our clients on the budget’s possible impact, being their trusted partner for financial preparedness.

·       Scenario planning: By modelling different scenarios such as a cut to reliefs or a freeze on tax thresholds, you can react quickly and decisively to minimise any negative impact and keep things running smoothly.

·       Assess investment and growth plans: If capital gains are targeted or reliefs are removed rather than strengthened, it would be wise to revisit any planned asset disposals or restructuring. Get ahead of this potential situation now with a review of your current plans.

·       Forecast cash flow: By forecasting cash flow under different tax outcomes, you can understand best and worst-case scenarios and prepare for the same. This is especially important for businesses with cross-border exposure, who face the threat of FX volatility around the budget announcement.

Feeling uncertain about the budget?

If you’re unsure how the Autumn Budget 2025 could impact your business, talk to Reckon for expert, tailored support. We provide tax planning and advisory services for corporations of all sizes that demand top-tier guidance.

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Contact us today to start the conversation.