Autumn Budget 2025: Wishful Thinking or a Tougher Tax Landscape? 

Autumn Budget 2025 tax changes wish list and predictions for businesses and families

With the Autumn Budget 2025 scheduled for 26 November, individuals, families, and businesses are bracing for potential UK tax changes. We’ve reviewed the promises of the past year and set out two perspectives: our wish list of sensible reforms, and our predictions for what the Chancellor may actually announce.

Wish list

Our wish list centres on creating stability, encouraging business and entrepreneurship, avoiding further barriers to growth and rectifying some of the changes previously announced that aren’t working.

1. Protect inheritance tax reliefs – APR and BPR

Agricultural Property Relief (APR) and Business Property Relief (BPR) are vital to protect family businesses from crippling Inheritance Tax (IHT) bills. The new rules, scheduled to come into forced on 6 April 2026, will allow up to £1 million worth of qualifying value to be totally exempt from IHT, with any value over that only qualifying for 50% relief. This could mean substantial IHT liabilities for some estates. While the new rules will allow any IHT on businesses to be funded over a 10-year period without interest, the overhanging debt to HMRC still weighs heavy and can have further tax implications if the money needs to be withdrawn from the business.

Weakening these reliefs risks leaving farming families, business owners and entrepreneurs with long-term tax debts, forcing them to sell land or business assets. For farmers, without reform, this could lead to wealthy investors buying up farmland, reducing genuine farmers to tenants.

2. Reverse the national insurance increase

Employer national insurance contributions have already frozen recruitment and suppressed wages, creating additional challenges for businesses trying to grow. Reversing the rise would ease pressure on employers and support workers across the UK, helping to stimulate job creation and wage growth.

3. Restore indexation relief for capital gains tax

Capital Gains Tax (CGT) was increased in the Spring Budget, with further hikes likely to appear in the Autumn Budget. To ensure some degree of fairness, indexation relief should be reinstated so taxpayers are not paying tax on gains caused by inflation rather than genuine profit.

Without this relief, investors, business owners, and property sellers could face significantly higher tax bills on gains that do not represent real economic benefit. Restoring indexation would provide clarity and predictability, allowing individuals and businesses to plan more effectively for the future.

4. Unfreeze the nil rate band for inheritance tax

The IHT nil rate band has remained fixed at £325,000 since 2009 and is frozen until at least April 2028. Over the same period, property values and the overall cost of living have risen significantly, meaning that many ordinary families are now falling into the IHT net despite having relatively modest estates.

This freeze undermines the original intent of the nil rate band and places an increasingly heavy burden on families trying to pass on wealth across generations. A long-overdue update would not only reflect modern property values more accurately but also restore fairness to the system.

5. Greater certainty through pre-clearance

UK tax legislation is extremely complex, and this can, at times, create uncertainty for taxpayers. Some tax legislation even contains rules, the interpretation of which is subjective. Despite this, there are only limited circumstances in which taxpayers and their advisers can approach HMRC and seek “pre-clearance”. The aims of such clearances are generally to ensure that individuals and businesses have certainty on tax treatment before they enter into a transaction, or to enable them to declare and pay taxes correctly. An explanation of HMRC’s pre-clearance opportunities would be very welcome.

6. Reduce corporation tax

A meaningful reduction in UK corporation tax could provide a strong incentive for businesses to invest and grow domestically rather than looking overseas. Lower rates would not only encourage international companies to establish operations in Britain but also help retain businesses already here.

For existing companies, a cut in corporation tax would free up funds for reinvestment into expansion, innovation, and employee development, creating a more dynamic and competitive economy. At a time when the UK is striving to attract global investment and support entrepreneurs, reducing corporation tax would send a clear message that Britain is open for business.

Predictions

Shifting from optimism to realism, we outline five key areas where we expect potentially significant UK tax reforms:

1. Growing pressure for landlords

One possibility is the introduction of national insurance contributions on rental income, which would add a new layer of tax on top of existing income tax and restrictions on mortgage interest relief. Such a move would further squeeze landlords’ profit margins, potentially forcing smaller property owners out of the market and reducing the availability of rental housing.

For tenants, this could mean higher rents as landlords attempt to offset rising costs. With the private rental sector already under strain, any additional taxation could have wide-reaching consequences for both landlords and tenants across the UK.

2. Capital gains tax increases

One possibility is aligning CGT rates with income tax, which could raise the top rate from 24% to 45%. While this would be a major blow for business owners selling companies and landlords looking to realise gains in their property portfolio, it would also affect general investors, including those who rely on their investment portfolios to pay living expenses.

At the same time, there is growing speculation around restricting or abolishing main residence relief for “higher-value” properties. If introduced, this could mean that selling a family home, particularly in London and the South East, may no longer be tax-free.

Another possible change is the base cost uplift on death, which currently resets an asset’s value for CGT purposes when inherited. Its removal would mean beneficiaries not only face inheritance tax (IHT) on estates but also inherit the deceased’s original purchase price, leading to large CGT bills when assets are sold. In effect, this could result in double taxation, with significant consequences for families passing on wealth across generations.

3. Inheritance tax reforms

In terms of IHT, we may see changes impacting the Potentially Exempt Transfers (PET) rules, including the following:

• Currently, gifts are exempt from IHT if the donor survives 7 years, with a reduction in the IHT rate payable from 40% if the donor survives between 3 and 7 years. We may see an increase in the required survival period, perhaps to 10 years, potentially also with an abolition of watering down of the aforementioned “tapering” rules.
• The introduction of a “gift tax” on any substantial gifts that is immediately chargeable to IHT, although potentially at a rate lower than 40%.
• An introduction of a lifetime cap on the amount that can be gifted before some form of IHT or gift tax is applied.

4. Pension tax relief cuts

Pensions remain an attractive area for reform for any government looking to raise substantial amounts of revenue. One option being discussed is replacing the existing relief framework with a flat rate of 30% or imposing further restrictions for high earners. While this would potentially reduce the incentive to save for retirement and discourage long-term investment in pensions, given growing concerns about the cost of pension tax relief to the Treasury, this cannot be ruled out.

There is also speculation regarding a possible reduction in the 25% tax-free lump sum that individuals can currently withdraw from their pension following retirement. This could significantly alter retirement planning strategies, particularly for those who have relied on this tax-free element as part of their financial security. For many, changes to pension relief would require a fresh look at long-term planning to ensure retirement goals remain achievable under a new, less generous regime.

5. The prospect of a wealth tax

Perhaps the most controversial potential measure in the Autumn Budget 2025 is the potential introduction of a wealth tax, an annual levy on individuals simply for owning assets above a certain threshold. This could include property, investments, and even personal possessions of high value, adding yet another layer of complexity to the UK tax system, potentially requiring detailed annual valuations and significant additional reporting for taxpayers.

Final thoughts

If the Autumn Budget 2025 follows these trends, business owners, farmers, landlords, and families may face significant new tax burdens.

For those considering selling assets, gifting property, or succession planning, taking professional advice before Budget Day may help secure existing reliefs and avoid being caught by new restrictions.

Our experienced team can guide you through inheritance tax planning, capital gains tax advice, and corporate tax strategy, ensuring you are prepared whatever the Chancellor announces.