Autumn Statement: key predictions

With the UK facing a significant budget deficit, the upcoming Autumn Statement is widely expected to introduce impactful measures for businesses, households, and the broader economy.

At Parsons Accountants, we are closely monitoring developments to help our clients stay informed and prepared. Below is a summary of the most widely speculated changes:

• Income Tax & Fiscal Drag: Personal tax thresholds are currently frozen until 2027/28, with reports suggesting a possible extension to 2030. This prolonged freeze, known as fiscal drag, means more people are pulled into higher tax bands as wages rise—generating substantial revenue without changing headline tax rates.
• Pension Tax Relief Changes: The government may cap or reduce the 25% tax-free lump sum, lower the Annual Allowance (currently £60,000), and limit higher-rate relief, possibly moving to a flat-rate system. These changes could particularly affect higher earners and those making large pension contributions.
• Rental Income & National Insurance: Rental profits may become liable for NIC, potentially mirroring self-employed rates (6% on £12,570–£50,270; 2% above). This would significantly increase the tax burden on landlords, particularly those with other sources of income.
• Income Tax & NIC adjustment: A proposed 2p increase in income tax paired with a 2p decrease in employee NIC could raise £6 billion while aiming to create a more balanced system between employees, landlords, and the self-employed.
• Income tax on dividends – Abolishing the £500 dividend allowance, and/or increasing the rates of income tax on dividends (currently 8.75% / 33.75% / 39.35%) to match the rates of income tax on non-savings income (currently 20% / 40% / 45%). Such changes would significantly increase the tax burden for company owners and investors.
• High-Value Property Tax: Some proposals include a new levy on homes worth £500k or more, a restriction on the availability of Principle Private Residence Relief on homes worth £1.5m or above. If adopted, these measures could significantly reshape the tax landscape for high-value homeowners and property investors.
• Inheritance Tax changes: It has been reported that HM Treasury is looking at changes to the IHT gift rules, including revisions to the taper rules (for gifts in the seven years before death), a possible lifetime cap on exempt gifts as well as an extension of the current freeze on the nil-rate band and residence nil-rate band beyond April 2030. These changes could have significant implications for estate planning and intergenerational wealth transfers.

We will be sharing more tailored insights after the Budget announcement on 26 November. In the meantime, if you’d like to discuss or take any preparatory steps in advance of the Autumn Statement, you can get in touch here, by emailing Daniel.Andreca@parsons.co.uk or calling 01924 669 500 and we’d be more than happy to help.

Authors: Daniel Andreca, Tax Director and James Covell, Business Services and Tax Associate