Autumn Statement Preview: 7 Tax Changes We Might See (and How Likely They Are)
What the Next Autumn Statement Might Mean for Your Finances
It’s now just under three months until the next Autumn Statement — expected to drop late October or early November. No official date has been set (at the time of writing), but the usual crystal ball gazing and Westminster whispers have already begun.
And with spending tracking higher, growth tracking lower, and the recent U-turn on welfare and winter fuel payments, expectations are for further tax rises.
Trying to predict tax changes is something of a fool’s errand. But as George W. Bush once said: “Fool me once, shame on — shame on you. Fool me — you can’t get fooled again.” So, naturally, we’re giving it a go anyway.
Now watch this drive…
What Might Be Coming – Rumours, Reality, and Red Herrings
Here’s a list of potential tax and policy changes being touted in the financial media, along with our likelihood ratings.
1. Stealth Tax Rises
Our view: Very Likely
The classic move. Expectations are high that the ongoing freeze on tax thresholds — including the tax-free Personal Allowance (£12,570), higher-rate income tax threshold (£50,270), and the IHT nil-rate bands — will be extended again. These freezes, in the context of inflation and wage growth, mean more people quietly slide into higher tax bands. It’s a tax rise by stealth.
Rachel Reeves previously hinted at a thaw in future years, but that might now be shelved. Freezing thresholds is politically convenient, revenue-rich, and headline-light. Expect more of the same.
2. Employer NI on Pension Contributions
Our view: Medium-to-High Likelihood
Labour has pledged not to raise National Insurance (NI), income tax, or VAT during its parliament. But that might not include plugging what’s been described (unfairly in our view) as a “loophole” — the exemption from Employer NI on pension contributions.
This is one of the few remaining tax-efficient frontiers for business owners — using employer contributions to extract profit. Introducing NI on these would be a significant (and painful) hit to the self-employed and SME crowd.
Would Labour go this far? Possibly. It could raise serious cash. But it’d also be deeply unpopular among business owners and could contradict their pro-enterprise narrative.
3. Changes to Pension Tax Relief or Tax-Free Cash
Our view: Unlikely
This rumour never dies.
Reducing higher and additional rate tax relief to a flat 25% or 30%, or slashing the tax-free cash cap from £268,275 to £150k or even £100k, would certainly save Treasury coffers — on paper.
But the government only just curbed the IHT benefits of pension savings by bringing them into the estate from 2027. To squeeze pensions again could cause savers to abandon them altogether, undermining long-term retirement self-sufficiency.
As a side note here, we would support an increase in auto-enrolment contributions. The current 8% of qualifying earnings won’t cut it. We think this should be gradually raised to 12–15% to get anywhere near retirement adequacy.
4. CGT Hike or Tinkering
Our view: Medium likelihood
Having only just increased Capital Gains Tax (CGT) rates last October (to 18% for basic-rate taxpayers and 24% for higher/additional), it seems unlikely the government will double down so soon.
That said, one area that could be reformed is the CGT uplift on death. Currently, inherited assets are revalued on death, resetting the base cost for CGT purposes. Scrapping this could raise revenue and discourage “deathbed hold” strategies.
We see that as more plausible than another rate hike or allowance cut.
5. ISA Allowance Reduction
Our view: Very unlikely
The government was said to be considering a halving of the ISA allowance - potentially limited to Cash ISAs only — but Rachel Reeves has reportedly shelved any such plans.
Any ISA changes now look improbable. If anything, expect simplification and reform of ISAs rather than limits to them. It’s also worth noting that the ISA allowance remaining frozen at £20,000 a year, represents an annual tightening after adjusting for inflaiton.
6. Inheritance Tax Shake-Up
Our view: Medium Likelihood
Last year, Rachel Reeves introduced sweeping changes to Business Relief and Agricultural Relief – two key planning tools long used by business owners and landowners to pass on wealth free of IHT.
This year, speculation is mounting that lifetime gifting could come under the microscope next:
Extending the seven-year rule: At present, gifts fall outside your estate after seven years (assuming no reservation of benefit). But there’s talk this could be extended to ten years, increasing IHT exposure for anyone gifting capital in later life.
Removing the surplus income exemption: Under current rules, if you can show that gifts were made from ‘surplus’ income (and were regular in nature), they fall immediately outside your estate. This is a powerful tool for high earners, and one that could now be in the government’s sights.
None of this is new – these changes have been rumoured for over a decade. But the political appetite for change might now be stronger. However, for those considering such gifts, it may well be worth accelerating these plans ahead of the upcoming Autumn Statement.
That said, there’s a philosophical question here too: do we really want to disincentivise gifting? Passing wealth down to younger generations helps fuel spending, house purchases and child-rearing costs. Gifting can be good for the economy – shifting wealth from a generally cautious, asset-rich generation to a more spendthrift one.
7. Wealth Taxes
Our view: Very Unlikely
We may well be ‘eating our hat’ on this one, but we think recent rumours of Wealth Taxes are unlikely to come to fruition.
A proper, full-fat wealth tax – on assets rather than income – is being called for by some of the more left-leaning Labour MPs. However, as tax specialist Dan Neidle has brilliantly argued in a recent article (click here), wealth taxes are slow to implement, hard to administer, and typically generate much less revenue than anticipated. They’re also economically counterproductive – capital flight is a very real risk, especially among the globally mobile elite.
Final Thought
Inevitably, there will be more.
Rumours, think pieces, and speculative leaks will be everywhere in the run-up to the Statement. Some will be credible, many will be noise. If you spot something that concerns (or intrigues) you, do send it our way.
And of course, once the actual policy changes are announced, we’ll be on it. Analysing what matters and what doesn’t, and what you should do (or not do) about it.
But if we had to summarise?
No dramatic tax hikes. No sweeping reforms. Just more of the same.
Extended tax freezes, possibly a tweak to employer NI on pension contributions, and a fresh consultation or two on IHT.
To re-emphasise – these are just our views. And yes, there’s always the chance of a rabbit pulled from the hat. Just don’t bank on it being fluffy.
Please note: The Financial Conduct Authority does not regulate tax advice. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts and their value depends on the individual circumstances of each investor.
Happy Thursday!
Kind regards,
George
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