All eyes will be on Chancellor Rachel Reeves next week as she delivers the highly anticipated Autumn Budget, with the nation awaiting confirmation on which taxes are set to rise. The statement, scheduled for Wednesday, November 26 at around 12:30pm in the House of Commons, follows Prime Minister's Questions and will outline key decisions on taxation and public service spending for the NHS, schools, and police.
This Budget arrives amidst significant fiscal pressure, casting doubt on the Labour Party's manifesto pledge not to increase income tax, National Insurance, or VAT for 'working people'. Both Prime Minister Keir Starmer and the Chancellor have recently failed to rule out tax rises, emphasising the dire state of public finances.
The Fiscal Challenge Driving Potential Tax Rises
The central driver behind the speculated tax increases is the Chancellor's commitment to her self-described 'non-negotiable' fiscal rules. Reeves aims to end borrowing for day-to-day public spending and reduce government debt as a share of national income by the end of this parliament.
To achieve this, the economic think tank the Institute for Fiscal Studies (IFS) suggests a fiscal 'tightening' of £22 billion is required. With the Chancellor ruling out a return to austerity and government debt already high, raising taxes appears to be the primary lever left to pull. Reeves has also expressed a desire for more 'headroom' to shield against future economic shocks, making tax rises even more likely.
Which Taxes Are Most Likely to Increase?
With income tax, NI, and VAT theoretically off the table, the government is expected to look elsewhere for revenue, with property and wealth in the crosshairs.
Property and Wealth Taxes: Significant changes are predicted for property taxation. Rumours suggest stamp duty could be replaced with a new property tax. Furthermore, The Times reports that the government is considering applying Capital Gains Tax (CGT) to sales of primary homes above a certain value, a move that would contradict a pre-election guarantee from Keir Starmer. This potential 'mansion tax' could affect 1,300,000 families and raise £600 million.
Landlords also face a potential shake-up, with the BBC reporting they may be required to pay National Insurance if renting is their main job or they own multiple properties. This focus is particularly sensitive for Reeves, who recently faced controversy over an unlicensed rental property.
Pension Tax: The government is rumoured to be targeting pensions by further restricting the 25% tax-free cash that can be withdrawn from pension pots. Another measure under consideration is capping tax-free pension contributions via salary sacrifice schemes at £2,000, a move The Times says could raise £2 billion.
Tax on EV Drivers: With the 2030 phase-out of petrol and diesel cars, the Treasury is looking at a new way to tax electric vehicles. The Daily Telegraph reports that Reeves could announce a pay-per-mile tax for EVs to replace the £24.4 billion in fuel duty currently raised from traditional vehicles.
Inheritance Tax: Long-term changes to Inheritance Tax set out last year could be expanded. These include imposing the tax on agricultural assets from April 2026 and adding unused pension funds to an estate's value for tax purposes from April 2027.
Cost of Living and Political Stakes
Amidst the talk of tax rises, the Chancellor has promised 'targeted action' on the cost of living. This could involve cutting the 5% VAT rate on energy bills or reducing supplier regulatory costs. There have also been strong hints about ending the two-child benefit cap, a move campaigners say would lift 350,000 children out of poverty.
Politically, this Budget is a high-stakes test for the Labour government. Breaking manifesto pledges risks damaging public trust, while failing to raise enough revenue could force unpopular spending cuts. With recent YouGov polling showing 77% of Brits believe the government is managing the economy poorly, Reeves' statement will be crucial for both financial stability and party unity.
