Rachel Reeves’ autumn budget options – what’s on the table?

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The Autumn Budget is approaching, and all eyes are on Chancellor Rachel Reeves. She’s walking a tightrope — balancing the need to invest, grow, and rebuild trust while keeping within the strict fiscal rules she and the Labour government have set.

So, does she have any options? Has she painted herself into a corner with her manifesto promises? What are her real options?

The context – and the constraints

The Institute for Fiscal Studies (IFS) estimates a £22 billion “hole” in the public finances over the next few years. Growth is sluggish, borrowing costs are high, and inflation still lurks in the background.

The government’s fiscal rules are clear – balance the books and keep a buffer. Reeves has repeatedly said she won’t break them.

At the same time, she has a problem with political promises made in last year’s election manifesto – assurances declaring that there would be no increase in income tax, VAT, or national insurance. In the last few days, there have been increasing signs that some kind of increase in Income Tax may be on the cards. This would inevitably risk damaging public trust, so it will be interesting to see how the Chancellor ‘dresses up’ any such increase.

Whatever she decides, the Chancellor is left with a narrow path – raise money through targeted tax reforms, spending restraint, or limited borrowing. But each comes with trade-offs.

Let’s look at the main options on the table.

1. Capital gains tax – closing the gap with income tax

One of the most talked-about possibilities is aligning Capital Gains Tax (CGT) more closely with income tax rates.

That would raise money from wealthier individuals who profit from selling assets rather than working income. It would also be seen as a move towards fairness – closing what some see as a loophole in the tax system.

The risk? It could discourage investment and even trigger capital flight if people sell up before rates rise. Still, adjusting reliefs or indexation might be politically easier than a full-blown rate hike.

2. National insurance or property income reform

There’s been growing pressure to bring landlords and property investors into the fold by applying National Insurance to rental income or changing how this income is taxed.

This would be framed as fairness – ensuring all income types are treated similarly – and it could bring in steady revenue.

But it’s not without consequences. Many small landlords might feel squeezed, and there’s always the risk that higher taxes feed into rising rents.

3. Rethinking property taxes

The IFS and other economists have long argued that the UK’s property tax system is outdated.

We rely heavily on Stamp Duty (a tax that discourages movement) and Council Tax (based on 1991 property values).

Reeves could begin the process of reform – shifting towards a land value tax or a revaluation of Council Tax bands. It would show long-term thinking and could boost fairness between regions.

The problem? Property taxes are politically explosive, and implementation would be complex. So, while reform might start in this Budget, it’s unlikely to deliver a quick fix.

4. Inheritance tax changes

The Chancellor may move beyond the usual tweaks and introduce more radical changes to IHT. In recent days, several rumours have emerged, including –

Instituting a lifetime cap on tax-free gifts, so you’ll only be able to pass on a certain amount (perhaps £ 50k-£200k) without IHT.
Extending the “seven-year rule” to ten years or more, meaning you’d need to survive for longer after making a gift to keep it outside the estate.
Cutting or removing taper relief for gifts made in the 3-7 year window before death
Keeping the nil-rate bands frozen or reducing reliefs such as the residence nil-rate band, making IHT more likely for many estates.

These changes are still unconfirmed, but if any take effect from Budget day, they’ll affect estate planning strategies significantly.

5. Closing reliefs and loopholes

There’s also scope for a quiet but effective approach – tightening tax reliefs, exemptions, and loopholes.

Possible areas include charitable reliefs, non-domicile rules, pensions, and trusts. These changes wouldn’t grab headlines like new taxes, but they could raise billions while keeping Labour’s tax pledges intact.

Expect Reeves to frame such moves as modernisation and fairness rather than revenue grabs.

6. The wealth tax question

Labour has publicly ruled out a new wealth tax.
But that doesn’t mean there won’t be movement in this area.

Instead of creating a whole new system, Reeves might tweak existing taxes on wealth – for example, increasing charges on high-value property or introducing one-off levies for specific assets.

That approach avoids the “wealth tax” label while still nudging the system in a more progressive direction.

What this means for you

For individuals and business owners, the message is clear: expect targeted, structural tax changes rather than broad rate rises.
If you have property, investments, or complex assets, now’s the time to review your financial position and prepare for potential reforms.

The smartest move? Get ahead of the curve.

Talk to Dux Advisory

At Dux Advisory, we help individuals and businesses understand how government budgets and tax changes affect their finances.

Maybe now is a good time to review your position or plan for what’s likely to come from the Autumn Budget. Our team is here to take your call – to help you make those all-important clear, confident decisions.

Get in touch today . Let’s talk about how we can support you through the changes ahead.

Author

Dan Hart

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