The biggest and possibly furthest reaching announcement in the Autumn Budget is the Government’s decision to freeze personal tax thresholds until April 2031 – extending the current freeze for another three years.
Whilst politically this means that Labour avoids breaking its manifesto pledge to not raise personal tax rates, the reality is that this change is a tax rise in all but name.
This change will affect income tax thresholds and the equivalent NICs thresholds for employees and self-employed individuals. Digging deeper into the Chancellor’s red book, it will also extend the freeze on Inheritance Tax (IHT) rates for a further year, April 2030 to April 2031.
Deciding to freeze the Income Tax rate is expected to bring in around £8 billion to the treasury, but it will also drag nearly one million more people into paying tax and force hundreds of thousands of taxpayers into higher tax bands due to fiscal drag.
If there was some consolation it was to those already worried about the upcoming reform to Agricultural Property Relief (APR) and Business Property Relief (BPR) from April 2026.
During her speech, the Chancellor confirmed that any unused £1 million allowance for the 100 per cent rate of APR and BPR will be transferable between spouses and civil partners. This includes if the first death was before 6 April 2026.
Acknowledging the costs that this would add to the lives of working people, Reeves did commit to driving energy bills down by axing the ECO scheme. This will cut average household bills by £150 each year.