Upcoming Budget: What to Expect on 26 November 2025
Chrissy Leach • 24 November 2025
Rumours, Reforms and What It Could Mean for You
As the Autumn Budget 2025 approaches on Wednesday 26 November, all eyes are on Chancellor Rachel Reeves and her first major fiscal statement since Labour took office.
The Budget comes against a backdrop of a flatlining economy, high borrowing costs and calls for both fairness and fiscal discipline. The Chancellor has promised a “responsible” approach, but one that could still involve difficult decisions.
The Economic Context
The UK economy continues to face sluggish growth, rising debt interest payments and pressure on public services. The Office for Budget Responsibility (OBR) is expected to publish cautious growth forecasts, leaving limited scope for giveaways.
The Treasury has already warned that while the economy “isn’t broken”, it “isn’t working well enough for working people”. That sets the tone for a Budget focused on long-term productivity and fair taxation.
What’s Already Been Signalled
In her pre-Budget speech last week, Rachel Reeves set expectations by reaffirming her commitment to fiscal responsibility - and notably did not rule out tax increases.
However, Labour’s manifesto promised not to raise the headline rates of Income Tax, VAT or National Insurance for working people. That means any revenue-raising measures are likely to come from less visible adjustments - such as frozen thresholds, relief changes or targeted reforms.
Key Rumours Ahead of 26 November
Here’s what’s being speculated by analysts and the financial press:
Income Tax
The tax thresholds are currently frozen until 2028 - a “stealth tax” increase because more tax is payable when pay rises are received (even if they don’t even keep up with inflation). This could be extended beyond 2028, as it generates around £8bn annually.
Income Tax v National Insurance
There are rumours of a 2% rise on income tax with an equal 2% reduction in national insurance. Whilst this will have a neutral effect for working people, pensioners and landlords do not pay national insurance and would be impacted by the 2% rise.
National Insurance on Rental Income
There are rumours that national insurance could start to be charged on rental profits, meaning that landlords could see a significant cut to their post-tax profits.
Pensions and Salary Sacrifice
The rumoured changes to the 25% tax-free pension withdrawal are no longer on the table, but salary-sacrifice could be changed.
Salary-sacrifice is when employees sacrifice a portion of their salary for pension contributions which save both tax and national insurance for the employees, and also employers national insurance for the employers.
There’s speculation that national insurance relief on salary-sacrifice pension contributions could be capped (for example, only applying to the first £2,000).
ISA Allowances
Reports suggest possible tweaks to the annual ISA limit, particularly the Cash ISA limit, which is said to be aimed at encouraging investing rather than providing tax revenue.
Corporation Tax
The main rate is expected to stay at 25%, but businesses could see a tightening of certain reliefs or investment allowances.
Property and Capital Taxes
Adjustments to Stamp Duty or Capital Gains Tax on property are being discussed as potential revenue-raisers.
“Modern” Taxes
Environmental and digital-focused levies could appear, aligning with Labour’s sustainability agenda.
What It Could Mean for Businesses and Individuals
Income Planning
Frozen or lowered thresholds could mean more tax on the same income. Reviewing dividend strategies, bonuses or salary levels will be worthwhile for owner managed businesses.
Payroll & Pension Structures
If salary-sacrifice changes are introduced, employers and directors using these arrangements should review the impact on take-home pay.
Business Reliefs
Any change to R&D, capital allowances or small-business reliefs could affect year-end planning, particularly for growing companies.
Personal Savings
ISAs and pensions remain essential tax-efficient vehicles, so maximising allowances is sensible.
What Happens Next
The Budget will be delivered on Wednesday 26 November. Our blog the next week will cover the changes; often the devil is in the detail.
As always, the above are rumours, so we wouldn’t advise making any drastic changes before then, particularly as we don’t know whether changes would be immediate or at the start of the next tax year.
It’s important to speak to your accountant about any changes that might affect you once the Budget is delivered. They can help you work through your options.
Key Takeaway
The Autumn Budget 2025 is expected to focus on stability, credibility and gradual fiscal tightening - rather than major rate hikes. But “fiscal drag” through frozen thresholds, and subtle changes to reliefs, could still raise billions in additional revenue.
Tax planning remains crucial for both businesses and individuals.
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