Are tax rises on the horizon? What recent activity at The Treasury means for you and your business
While the 2025 Spending Review focused on long-term investment rather than introducing new taxes, the scale of spending suggests that future tax rises are likely.
Where have the Government recently invested funds?
The Chancellor pledged multi-year funding for health, defence and public infrastructure, setting departmental budgets until 2028–29.
Key announcements included:
· Defence spending to rise to 2.6 per cent of GDP by 2027
· £2.3 billion annual capital boost for the NHS
· £2.4 billion a year for school rebuilding
· £15.6 billion for transport in major city regions
· £500 million for digitalising HMRC
However, funding for other vital areas like local government, policing, and the environment will either remain flat or fall.
Where will the money come from?
No tax rises today does not mean no future tax rises.
Despite assurances that new spending is fully funded, rising debt interest payments, global volatility and flatlining productivity all place pressure on the Chancellor’s future fiscal decisions.
From a technical standpoint, experts believe the most likely targets include:
· Extending threshold freezes, which quietly push more people into higher tax brackets
· Cuts or caps on pension tax reliefs
· Council tax rises passed through local government
These changes have the potential to impact both business cash flow and personal wealth, which is why advanced planning is essential.
What can you do to prepare for potential tax changes in the Autumn Budget?
The absence of immediate change should not create complacency.
Now is the right time for you to:
· Stress-test cash flow and margins under potential tax scenarios
· Revisit remuneration strategies and reliefs
· Speak to your accountant about existing tax-saving opportunities
With significant investment flowing into defence, healthcare, infrastructure and technology, now might also be an ideal time to explore public sector contract opportunities and position your business to support the UK’s long-term development.
