North East Tax Expert Urges Caution Ahead Of The 2025 Budget

One of the North’s leading independent accountancy and business advisory firms, Clive Owen LLP, which has offices in Darlington, York, Durham, Middlesbrough and Newcastle, is advising caution ahead of next month’s eagerly anticipated Autumn Budget, amid mounting speculation over potential changes to tax and savings rules.

The Autumn Budget, which takes place on Wednesday, 26 November 2025, will outline the Chancellor’s plans for tax, borrowing and public spending for the year ahead, while aiming to keep the state’s finances balanced.

Last October, Rachel Reeves’ first Budget introduced a record £40bn of tax rises, although she indicated at the time that such increases were unlikely to be repeated in 2025. However, with slower than anticipated UK growth, additional commitments announced in the Spring Spending Review and wider global economic fragility, there are rumours that new measures may be introduced come November.

“There has already been plenty of speculation and column inches published ever since the Chancellor announced her Autumn Budget about what we could expect to see, ranging from adjustments to ISA limits and pensions to potential tweaks to Inheritance Tax and Capital Gains Tax,” says David Baggaley, Head of Tax at Clive Owen LLP.

“While it can be tempting to react to every rumour, the key is patience and measured, informed planning. Announcements made by the Chancellor may differ significantly from speculation, as we saw in last year’s Budget, and long-term financial goals should remain the priority.”

David has outlined a series of potential areas that could be impacted in the Budget, as well as what has already been confirmed by the government so far.

Individual Savings Accounts (ISA) Limits

The government has confirmed a review of ISAs, which has sparked debates over potential caps on cash ISAs, in a bid to try and encourage more investment in equities rather than leaving money in cash savings.

Pensions

Changes to salary sacrifice arrangements and the 25% tax-free pension cash allowance could also be considered by the Chancellor, as cutting tax relief remains a key lever the Treasury could use, especially for higher earners.

Capital Gains Tax (CGT) and Inheritance Tax (IHT)

While CGT is not currently under formal review, future adjustments are possible, including potential rate increases or further reduced annual exemptions.

IHT Reliefs

From 6 April 2026, Agricultural Relief and Business Relief will be reformed. Currently, these reliefs provide 100% relief on qualifying assets. Post-April 2026, a £1M combined allowance will retain 100% relief, with relief above this threshold reduced to 50%.

For example, a business valued at £5M qualifying for Business Relief would be entirely exempt from IHT if the owner passes away before April 2026. After the reforms, the IHT liability could be £800,000 without proactive planning.

Additionally, it has been rumoured that the government could reform lifetime gifts. While these are exempt from IHT (when made directly, not into a trust) at the time they are gifted, they remain ‘potentially exempt transfers’ for a period of seven years.

However, speculation is that the Chancellor might introduce a lifetime cap on tax-free gifts or even scrap or extend the seven-year rule.

Unused Pensions and Death Benefits

From 6 April 2027, most unused pension savings and death benefits will be included within an individual’s estate for IHT purposes. Previously, these were largely exempt, meaning individuals with large unused pension pots may face new IHT liabilities.

Property Taxes

It has been rumoured that the government could overhaul property taxes, potentially by introducing a single annual levy to replace stamp duty and council tax, allowing stamp duty payments to be spread over several years, adding higher-value council tax bands or reducing capital gains tax exemptions on primary residences.

National Insurance and Income Tax

Potential extensions to frozen thresholds could act as a “stealth tax,” while landlords may see new National Insurance liabilities on rental income.

Wealth Tax

Calls for a tax targeting the UK’s wealthiest have also been mooted, however, no formal policy exists, and concerns remain over the impacts this could have on investment.