For 2025/26, offsetting measures are expected to save £8.1bn, but detailed spending figures will be released during the first part of the Spending Review, scheduled alongside the Autumn Budget on 30 October.
In her speech, Chancellor Rachel Reeves emphasized the challenging nature of the upcoming Budget, stating, “I have to tell the House that the Budget will involve taking difficult decisions to meet our fiscal rules across spending, welfare, and tax.” Despite this, Reeves reaffirmed Labour’s commitment not to increase National Insurance, the basic, higher, or additional rates of income tax, or VAT.
However, in an interview with The News Agents podcast, Reeves indicated that tax increases might be necessary in the Budget.
With this in mind, potential changes could be seen in capital gains tax (CGT) and inheritance tax (IHT). These, along with possible adjustments to pensions and taxes affecting ‘non-working individuals’ (including pensioners), have been the focus of media speculation.
Increases in CGT have been anticipated, especially since Labour declined to rule them out in pre-election discussions. While CGT is projected to raise £15.2bn in 2024/25 and £16.2bn in 2025/26, HMRC estimates that significant rate increases could actually reduce revenue by encouraging investors to defer gains.
