Why this year’s Autumn Budget could mean big tax changes

Twelve months ago, Rachel Reeves made headlines with her declaration of a “£22 billion black hole” in the public finances, announcing a controversial restriction on the Winter Fuel Payment for pensioners. That move set the tone for months of speculation over possible tax rises in the 2024 Autumn Budget.

Now, a year on, the cycle is repeating. This time, it is the cost of policy reversals that has put fresh strain on the public purse. The decision to abandon means-testing for the Winter Fuel Payment is estimated to cost £1.25 billion, while reversing planned reforms to disability benefits is expected to add a further £5 billion to government spending. Combined with slowing economic growth, the fiscal challenge has reignited debate about where the next tax increases might fall.

The Chancellor has ruled out increases to income tax, national insurance and VAT for what she terms “working people”, narrowing the field of possible revenue-raising measures. Among the options being discussed are:

• A longer freeze on income tax allowances and bands – The personal allowance and thresholds were originally frozen for four years (2022/23 to 2025/26) under Rishi Sunak, extended by Jeremy Hunt for another two years. Extending the freeze to April 2030 would quietly draw more taxpayers into higher bands – a process known as fiscal drag – and could raise significant revenue without changing headline rates.
• Reform of pension contribution tax relief – A frequent target in Treasury discussions, pension tax relief disproportionately benefits higher earners. Moving to a flat rate of relief for all savers could generate billions, particularly given the growing number of higher and additional rate taxpayers.
• The introduction of a wealth tax – While politically sensitive and administratively complex, the idea has been openly floated by senior political figures. Many countries have abandoned wealth taxes due to their challenges, and a July 2025 House of Commons Public Accounts Committee report noted that “HMRC has no overview of an individual’s total wealth and faces challenges in getting all the data it needs to risk assess and target wealthy people”.

For individuals and business owners, the coming weeks present an opportunity to review personal and corporate financial plans. Early preparation could allow you to make use of current allowances and reliefs before any changes take effect.

As ever, while speculation dominates headlines, the detail will only emerge on Budget day. However, history suggests that when fiscal pressures mount, the government will explore every avenue to raise revenue – and that makes proactive financial planning more important than ever.