Autumn Budget 2025 - What to Expect on 26 November - Maybe

2nd October 2025

The Chancellor is set to deliver the Autumn Budget on 26 November 2025, in what many economists describe as one of the most significant financial statements of the decade.

The economic backdrop is challenging. Growth remains sluggish, debt levels are high, and the Office for Budget Responsibility (OBR) is expected to downgrade productivity forecasts. That downgrade will widen the estimated fiscal shortfall, which independent analysts put between £20 billion and £50 billion.

At the same time, the government has ruled out raising the headline rates of income tax, National Insurance, and VAT. This leaves policymakers searching for other ways to close the gap, with many expecting a mix of indirect revenue-raising measures, often referred to as "stealth taxes."

Income Tax and "Stealth" Increases

Although rates of income tax and National Insurance are expected to remain unchanged, the government is likely to extend the freeze on tax thresholds. This process, known as fiscal drag, quietly raises billions by pushing more taxpayers into higher bands as wages increase.

Wealth, Property and Assets

Taxation of wealth is expected to play a larger role in this year's package. Adjustments to Capital Gains Tax (CGT) and Inheritance Tax (IHT) are widely anticipated. Options include lowering exemptions, freezing allowances, and bringing certain high-value property transactions into scope.

Property taxes are also under review. Possible measures include reforming stamp duty, introducing new council tax bands for expensive homes, or applying CGT to some home sales.

Businesses and Targeted Levies

Large corporations, particularly in the finance and energy sectors, may face higher contributions through targeted windfall levies. Meanwhile, the government is exploring ways to reform business rates, with an emphasis on making the system more progressive.

Consumption and Behavioural Taxes

Taxes designed to change behaviour are seen as politically easier to introduce. Potential increases in duties on gambling, betting, and speculative trading are under discussion. Adjustments to VAT are considered less likely to involve a rise in the standard rate, but narrowing exemptions or reduced rates could raise significant revenue.

Welfare and Social Commitments

On the spending side, ministers are under pressure to ease the two-child benefit cap, a long-standing Labour pledge. Removing the cap would cost several billion pounds, but it would signal a major policy shift in welfare support.

Balancing Risks

The government faces a delicate balancing act. Too heavy a package of tax rises risks slowing growth, while too little action could undermine fiscal credibility. Analysts widely expect the Chancellor to favour a patchwork of smaller measures rather than a single sweeping reform, raising revenue incrementally while avoiding market instability.

Outlook

The Autumn Budget 2025 is expected to raise substantial sums without changing headline tax rates. Households and businesses should be prepared for a series of technical changes that, taken together, will increase the overall tax burden.

The measures announced on 26 November will reveal how the government plans to address the funding gap, maintain market confidence, and deliver on its social commitments — all without breaking its promise on headline tax rates.