It's hard to remember an Autumn Budget that hasn't had more headlines and speculation!
Rumours of manifesto breaking income tax rises, re-written proposals based on revised projections, and a load of potential policies have all been debated before the Chancellor, Rachel Reeves, has even stepped up to the dispatch box. It's been a case of theories, political noise, and economic jargon all dialled up to the maximum! But there's just one simple question you probably want an answer to:
How will the budget affect me, my money, and my future?
That's why I've written this blog post to help you by addressing the key rumours, likely changes, what they may mean for you, and what you need to think about. Needless to say this is something of an arduous task, for almost every day seems to bring something new that Rachel Reeves is contemplating. Mansion taxes, reform of pensions, and potential ISA restrictions to name a few - the potential list is vast!
I've broken down what I think are the key and most likely changes coming in plain and simple English. I've also provided our predicted likelihood score for each potential measure with a 1 being I can't see it happening, and 5 being I think it's practically guaranteed. We'll see how accurate my predictions are on Wednesday 26 November 2025.
10 Potential tax rises that could be coming in the Chancellor's upcoming Budget statement:
A potential mansion tax charge of 1% could be applied to homes valued above £1.5m. To do this, it is said that 2.4m homes in Council Tax bands F, G, and H will be revalued as the current system is based on property values from 1991. According to the Daily Telegraph, the levy would likely impact 300,000 properties across the country.
It means that a property valued at £2m could face an annual charge of £20,000, equivalent to £1,667 a month. However, there are also reports that there would be an option to defer payment until death or house sale. The reason for this being to prevent asset-rich but cash-poor pensioners from being forced to sell up due to the rising cost of maintaining their home.
| Current Council Tax Bands | |
| Band | Property value |
| A | Up to £40,000 |
| B | >£40,000 - £52,000 |
| C | >£52,000 - £68,000 |
| D | >£68,000 - £88,000 |
| E | >£88,000 - £120,000 |
| F | >£120,000 - £160,000 |
| G | >£160,000 - £320,000 |
| H | >£320,000 |
Consideration: Reforms to property taxes can take time to implement, keep an eye on our blog for the budget summary and any posts covering specific changes, their impact, and any planning that can be implemented.
Likelihood: 4/5
Capital Gains Tax (CGT) is being considered for main residences if they sell for over £1.5m. The Times reports that the £1.5m being set as the threshold means this would impact around 120,000 homeowners resulting in CGT bills of close to £200,000. Under current legislation CGT is only charged on the sale of second homes.
Consideration: Timing could potentially be critical to this policy. If you feel your main home is close to the potential £1.5m threshold, you may want to think about your property valuation, any future plans to move, and any improvements that could result in a rising property value.
Likelihood: 3/5
Might the Chancellor extend the freeze on personal tax thresholds beyond the original 2028 deadline? Doing so would raise tax revenue albeit likely not for another 3 years. It results in fiscal drag whereby assumed wage growth over time results in tax payers being pushed into higher income tax bands (which don't rise with wages or inflation).
Calculations done by MoneyWeek suggest a tax payer earning £100,000 in 2022 could pay £7,000 more in tax than if thresholds had kept pace with inflation. They further break this down whereby the additional tax burden is calculated to be £5,600 for someone on £80,000, and £4,600 for someone on £50,000.
This is all based on the assumption that wage growth is in line with the Office for Budget Responsibility’s data and forecasts, and 2% inflation in 2030.
Consideration: The impact of this isn't felt overnight but it happens over a matter of years. If you're a higher earner, business owner, or receiving regular pay rises or bonuses then now would be a good time to review how close you are to the next tax band. Small adjustments to salary structure, benefits, or pension contributions may be able to help you manage fiscal drag.
Likelihood: 5/5
Could the lump sum be capped at a lower amount of £100,000? At present, from the age of 55 you can usually withdraw 25% of your pension pot tax-free to a lifetime limit of £268,275.
Consideration: Such a change is likely to impact you if you have a larger pension pot or if you're planning a significant withdrawal in the near future. It may be worth reviewing your retirement timeline, how much you intend to take tax-free, and whether earlier action could be a more tax efficient action.
Likelihood: 3/5
There has also been speculation that pension tax relief, currently calculated at 20%, 40%, or 45%, depending on your income level, could be cut to 30%. That would work well for basic-rate taxpayers earning under £50,270, but would result in higher earners receiving less than previously.
Consideration: There are questions as to how this would be administered by pension schemes as it has been suggested previously that this could be too complex. If your're a higher earner then you may find that contributing sooner to your pension is potentially more tax efficient. Perhaps review your current contribution levels and how any future changes could impact on your retirement planning moving forward.
Likelihood: 3/5
At present, employees give up part of their salary to increase their contributions to their pensions through salary sacrifice schemes. The key benefit is that workers and employers pay no Income Tax or National Insurance (NI) on these pension contributions.
There is no limit to the amount of salary you can put in before it's subject to NI. A cap is being considered which is being suggested could be £2,000. This means above that limit the full NI rate on contributions would apply. For reference NI is charged at 8% for earnings under £50,270 and 2% above that.
Consideration: A cap would result in higher NI costs for employees and employers above any new limit. Do you rely on salary sacrifice as a key part of your pension strategy? How much do you contribute through this? Keep an eye on this one as changes could impact on your retirement planning.
Likelihood: 5/5
The amount of time you need to live for a gift to be free of Inheritance Tax (IHT) could potentially increase from 7 to 10 years. A lifetime cap could also be introduced on the total value of the gifts you make prior to death.
The IHT regulation as it currently stands means there's no total amount you can gift tax-free during your lifetime, you just need to live for at least 7 years once you've made the gift for it to be fully outside of your estate as a general rule. If you die between 3 and 7 years after making it, a taper relief then applies.
Taper relief only applies to gifts above the £325,000 IHT tax-free allowance (known as the nil-rate band). This is as follows:
Consideration: You many need to rethink any gifting as part of your estate planning in terms of timing and strategy. This is particularly the case for substantial gifts such as property or property deposits for children. Any moves from the Chancellor could limit future flexibility in terms of your plans.
Likelihood: 2/5
The Chancellor wants to encourage people to invest and so maybe looking at reducing the cash ISA annual allowance to £10,000. A British ISA is once again being considered whereby an additional £5,000 tax-free allowance would be available for investment in UK-listed shares.
Savers in the main can currently pay in up to £20,000 across various ISAs, thereby allowing them to earn interest, income, and capital gains tax-free.
Consideration: If you rely on the full £20,000 cash ISA limit you may want to consider if, and how, you spread your contributions between cash and investments. Keep an eye on whether a Stocks & Shares ISA, or a future British ISA might be beneficial.
Likelihood: 2/5
Electric car (EV) drivers could be hit with a pay-per-mile tax from 2028. It means EV drivers covering an annual average of 8,000 miles may need to pay £435 per year, broken down as £240 for the pay-per-mile tax and £195 of Vehicle Excise Duty (VED).
It could work whereby as a driver you estimate the amount of miles you'll cover for the year ahead. If you drive fewer miles by the end of the year then you could have a credit that carries over. If you exceed the mileage estimation then you may face a top-up charge.
Consideration: Review in the first instance your annual mileage. Then think potentially about how future journeys and driving habits could impact on any future annual costs.
Likelihood: 3/5
An exit tax could apply to those who leave the UK while owning assets that have risen in value, even if those assets haven’t been sold. At the moment current legislation means those leaving the UK and becoming non-resident can sell their assets (after emigrating) without paying CGT.
A proposed tax could treat certain assets (for example shares in UK companies or business interests) as if they were disposed of at the point of departure. This would be known as a 'deemed disposal' whereby the unrealised gains could then be taxed potentially at 20%!
Consideration: If you're potentially relocating and you're a business owner or someone with significant shareholding, it may be wise to review your assets and plans. The timing of a future move could be critical in terms of if, and when, such a policy is to be introduced.
Likelihood: 2/5
The content of this post was created on 21/11/2025.
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