The upcoming Autumn Budget is making many hold their collective breath, uncertain that any financial moves made in the next month will still be economically sound going forward.
Rather than sit around and wait for 26 November, we have dusted off our crystal balls and our understanding of the country’s economy to consider what the most likely outcomes of the Autumn Budget are.
What can we expect to see in the Autumn budget?
Our first prediction is not about something that is going to change but rather something that looks to stay the same.
Income Tax thresholds have been frozen for a while and will likely continue to be frozen until at least 2028.
We might see an extension of this freeze if the Government do want to tap into Income Tax without officially increasing the scope.
This will result in a stealth tax as fiscal drag caused by inflation pushes more people across the existing thresholds, meaning that fewer people escape Income Tax entirely and more workers find themselves paying higher rates of tax without feeling the real-world benefits of higher wages.
On the subject of tax, we also expect there to be some changes to Capital Gains Tax (CGT).
This is due to it falling outside of the ‘off-limits’ taxes highlighted in Labour’s manifesto.
We expect to see CGT more closely aligned with Income Tax rates, which could see the 20 per cent rate give way to a 40 per cent rate for higher earners.
The annual exemption may be cut further or removed entirely to expand the scope of who is covered by CGT.
All of this may constitute part of a wealth tax designed to target the higher earners in society.
This would align with eh big changes that are coming to Agricultural Property Relief (APR) and Business Property Relief (BPR) that will be capped at £1m per person.
We predict that there is likely to be a further expansion or at least a clarification of new Inheritance Tax (IHT) changes as the Government continue to focus on it as a source of revenue.
What do we know is changing in the Autumn Budget?
As mentioned, we know that the Government is constrained by manifesto promises and so needs to either break with those pledges or continue to tax higher earners in society.
Other changes that will be ushered in following the Autumn Budget are more administrative and have a wider impact on financial management.
Making Tax Digital (MTD) for Income Tax will be implemented from April 2026 for self-employed individuals, sole traders and landlords earning over £50,000.
This means they will have to keep digital records and send quarterly updates to HM Revenue and Customs (HMRC) using approved software.
From April 2027, this will extend to those earning between £30,000–£50,000 and the threshold falls to £20,000 in April 2028.
In April 2027, Benefits in Kind (BiK) will need to be included as part of payroll rather than recorded using the P11D form.
These administrative changes require time and attention to ensure that preparations are managed effectively and deadlines are not missed.
While it is important to consider what might happen in the Autumn Budget, it is more vital to get ready for the confirmed changes and adapt to the other announcements as they happen.
We will be on hand to guide you through the wake of the Autumn Budget and ensure that your business is still well positioned to continue growing and succeeding, whatever is announced.
Speak to our expert team today for help and support with the upcoming Autumn Budget.