Change is coming: what could be in the Autumn Budget?

Chancellor Rachel Reeves speaks at the Labour conference in September. Stefan Rousseau/PA Wire

By Dr Ed Cantelo

Navigating the complexities of financial planning has always been challenging, especially with impending changes on the horizon.

As Rachel Reeves, the new Labour Chancellor, prepares to present her first budget on 30 October 2024, predicting potential changes and their implications can be crucial but, of course, without a crystal ball can also be fraught with difficulties.

In this article, we explore what could lie ahead and how you might prepare.

The state of taxes

The current tax burden is the highest it has been since World War II. Labour has assured that it won’t increase the rates for income tax, National Insurance or VAT, at least for now.

However, this doesn’t mean that changes aren't coming as it seeks to plug the £22 billion ‘black hole’ in public finances they have identified.

How to increase tax and National Insurance without changing the rates?

The previous government froze the tax-free personal allowance and bands on which the different rates of tax are applied up until 2028. This government could decide to extend this through the remainder of their term. This is known as fiscal drag - by doing this, as people get pay rises, more people end up paying tax in the higher tax brackets leading to increased tax take. That said it can have downsides and we have seen a problem with people close to the £100,000 level choosing to work less rather than pay punitive tax.