The run-up to this year’s Autumn Budget has shifted unexpectedly. After two weeks of signalling that income tax rises were on the way, the Chancellor has reversed course. The change has surprised ministers, MPs and the markets – and it leaves business owners facing a very different outlook to the one expected only days ago.

Removing the widely expected income tax rise means the Government now needs to explore other ways to raise revenue. That creates more uncertainty and a broader mix of possible outcomes for both individuals and businesses.

Below is a clear overview of the tax areas now most likely to feature in the Budget – and what they could mean for you.

Income Tax and National Insurance

The Chancellor has ruled out increasing income tax rates. But this doesn’t rule out alternative ways of raising revenue.

Tax thresholds are not covered by manifesto commitments, so they can be frozen or adjusted without changing the main tax rates. If the freeze continues, more people will be pulled into higher tax bands over the coming years – a stealth increase that particularly affects business owners who pay themselves via a mix of salary and dividends, and anyone whose income is rising with inflation.

There is also speculation about changes to the way National Insurance applies to different types of income, including rental income. While nothing has been confirmed, this would have a significant impact on landlords already facing rising borrowing costs and restrictions on interest relief.

Taxes that could now move up the priority list

With income tax rises off the table, attention has turned to a series of smaller tax measures that could raise revenue.

Wealth taxes

Commentators expect the Chancellor to look more closely at wealth-based tax changes. These could include:

• Adjustments to capital gains tax
• Changes to reliefs
• Reviews of how certain assets are taxed
  There is also renewed discussion around a potential “mansion tax” on properties worth £2 million or more.

Inheritance tax

Inheritance tax changes are already due in April 2026. (You can read our summary here:
Inheritance Tax is Changing from April 2026)

Further changes may now be considered – including updates to allowances, gifting rules or reliefs that matter for business owners and families planning ahead.

Investment income

Possible adjustments to how investment income is taxed include:

• Changes to dividend taxation
• Tweaks to the treatment of savings and investment income
  The Treasury is also reviewing salary sacrifice for pensions and considering a flat rate of pension tax relief. This could reduce relief for higher and additional rate taxpayers.

Sector-specific taxes

Targeted measures may appear, including:

• Gambling duties
• Bank levies
• Taxes relating to high-value assets
  Individually these raise smaller amounts, but together they could contribute meaningfully to the Government’s revenue gap.

VAT

The Government is reportedly exploring higher VAT rates on luxury goods – such as high-end cars, designer fashion and art. This would raise revenue without breaking manifesto pledges on taxes for “working people”.

Corporation Tax and Business Investment

The main rate of corporation tax is already 25%, and there is no indication this will increase.

However, there may be new incentives aimed at supporting business investment – including enhanced allowances for capital expenditure or targeted reliefs linked to technology and green projects. These could be important for businesses planning ahead for 2025 and 2026.

Business Rates

A national revaluation is due next year. Many businesses will see their rates bills change as a result. The Budget may introduce transitional reliefs or changes to how rates are calculated, particularly for retail, hospitality and leisure businesses.

Staying informed

The Chancellor’s U-turn has created a more complicated Budget backdrop. Instead of one major tax change, we’re likely to see a combination of smaller measures that affect different parts of personal and business finance.

To stay updated on the announcements – and what they mean for you – you can sign up for our updates here.

Once the Budget is confirmed, we’ll break down the changes and help you understand how they apply to your business and your personal position.

If you have questions, or would like to plan ahead, please speak to your usual bk plus contact or your local office team.