What To Expect In The 2025 Autumn Budget

The Autumn Budget is scheduled to be delivered on 26 November 2025 and is widely expected to introduce changes across several key areas, including Inheritance Tax (IHT), Capital Gains Tax (CGT), property taxation, pensions, and broader fiscal policies. While no official measures have been confirmed at this stage, there is growing speculation from industry experts about what the Chancellor may announce. In this article, we explore the most discussed predictions and potential reforms which could impact your small business and the wider economy.

What Is The Autumn Budget?

The Autumn Budget refers to an annual statement delivered by the Chancellor of the Exchequer, currently Rachel Reeves, outlining the UK Government’s plans for public spending and revenue generation. It sets out the fiscal measures intended to manage the economy, reduce the national deficit, and support long-term economic stability.

What Changes To Expect

Although no legislative changes have been officially confirmed, experts have made informed predictions regarding potential outcomes of the upcoming Budget. These forecasts largely focus on possible adjustments to tax legislation. It is important to emphasise that all projections remain speculative, and no financial decisions should be made solely on the basis of these predictions.

Inheritance Tax (IHT)

Inheritance Tax (IHT) is expected to change in the coming years. From April 2026, agricultural land may no longer be exempt [1], and from April 2027, leftover pension money could be taxed as part of someone's estate. Experts also believe the rules around giving money away before death could be tightened. For example; extending the current seven year rule to ten years or putting a cap on how much can be gifted tax-free.

Some existing tax-free allowances, such as the £325,000 nil-rate band, have been frozen for years and may stay that way until at least 2030. Due to property and asset values going up, more families are being pulled into paying IHT. While major changes are unlikely, smaller adjustments to gift rules and thresholds could bring in more tax and affect estate planning in the future.

Capital Gains Tax (CGT)

Capital Gains Tax (CGT) is not a top Government priority right now, but it was increased in last years Budget and could be revisited as an easy way to raise revenue. Rates rose from 10% and 20% to 18% and 24%, and the annual tax-free allowance was cut from £12,300 in 2022–23 to just £3,000 by 2024–25. These changes mean many more people now pay tax on profits from selling property, shares, or other assets.

Whilst no new CGT changes have been officially proposed, the Chancellor could raise rates again or reduce the allowance further. Small, gradual increases are seen as effective ways to bring in more tax over time without discouraging people from selling assets. With limits on raising other major taxes like income tax or VAT, CGT may become a key target if the government needs more revenue.

Pensions

There has been ongoing speculation about changes to pensions, particularly around the 25% tax-free lump sum and tax relief on contributions. Although these changes did not happen in last years Budget, many people rushed to access their pension funds early, which may have hurt their long-term financial plans. This shows the risks of acting on rumours without proper advice. Meanwhile, tax relief on pensions (costing the government £45–£50 billion a year)[2] remains a potential target for future reforms, especially for higher earners.

The government has already announced that from April 2027, unused pension funds will be subject to Inheritance Tax [3]. Other ideas being discussed include limiting salary sacrifice schemes or introducing a small annual charge on pension fund values.

Property Taxes

There is increasing speculation that the Chancellor may introduce new property taxes in the upcoming Budget. One idea reportedly under review is replacing stamp duty and council tax with a single annual levy on high-value homes. Other options include adding new council tax bands for expensive properties or letting buyers spread stamp duty payments over several years to make moving home more affordable.

Another proposal being discussed is taxing the sale of main homes above a certain value, as these are currently exempt from Capital Gains Tax (CGT). This is currently being referred to as 'mansion tax'. It could apply to homes worth over £500,000 or more, and would mainly impact wealthier homeowners. These measures are seen as ways to raise revenue without introducing a broader wealth tax.

Individual Savings Accounts (ISAs)

Earlier this year, there were strong rumours that the Chancellor might cut the annual Cash ISA limit from £20,000 to £4,000 to encourage more investment in stocks and shares ISAs, particularly in UK companies. Although the idea has been put on hold, it signals the Government's broader aim to shift savings away from cash and towards equities.

Wealth Tax

A wealth tax has been talked about as a way to raise extra money, with suggestions like a 2% charge on assets over £10 million. While it could bring in a lot of revenue, many experts warn it might push wealthy people and investment out of the UK. Other countries have tried similar taxes and most have scrapped them (France 2018, Sweden 2007, etc). Although some Labour party members, such as Sharon Graham are supporting the idea, it is unlikely to appear in the Autumn Budget.

Making Tax Digital (MTD)

Making Tax Digital (MTD) is a government initiative to modernise the UK tax system by requiring businesses and individuals to keep digital records and submit tax returns using approved software. It currently applies to VAT and will extend to income tax from April 2026.

Looking For Further Information

Hopefully this article has helped clarify what to expect from the Autumn Budget. For more information on topics related to the UK economy, feel free to explore our Knowledge Base. If you have any questions about how the Autumn budget will affect your small business, do not hesitate to contact us.