Remember when Budget day used to feel like a once-a-year event you could actually prepare for? This year it’s felt more like a slow-motion car crash we’ve all been watching in real time.
Ever since the election, barely a week has gone by without another “exclusive” revealing the next potential tax rise. The Treasury’s PR machine has been working overtime – or perhaps under-time, depending on how you look at it – and today, November 26th 2025, we finally discover what actually made the cut.
What We Know (And What We Only Think We Know)
Let’s be honest – after months of briefings, counter-briefings and outright U-turns, even the experts are throwing their hands up. But certain measures now look almost certain to appear when the Chancellor stands up this afternoon.
The Big One: Employer National Insurance
If there’s one tax rise that’s survived every twist and turn of the rumour mill, it’s the increase in employer National Insurance contributions. The word on the street – and by street I mean the corridors of Westminster – is that the rate could jump from 13.8% to something closer to 15%, while the threshold at which businesses start paying it drops dramatically.
That’s not a tax on “big business”. That’s a tax on anyone who employs people. Your local café, the family-run factory, the startup that just hired its tenth employee – they’ll all feel it. And guess who ultimately pays when employment costs rise? Exactly.
Every 1% increase in employer NI costs the economy billions and usually ends up as lower wages or higher prices. History is remarkably consistent on this.
Capital Gains Tax: Alignment Anxiety
Few topics have caused more sleepless nights for investors than the prospect of capital gains tax (CGT) being aligned with income tax rates. Right now, higher-rate taxpayers pay 20% on most gains (28% on property). The fear is that Reeves will push this toward 40% or even 45%.
In my experience covering these events, when a Chancellor refuses to rule something out for months, it’s usually because they’re planning to do it. The repeated “we have no plans to…” statements have worn thinner than a budget surplus.
- Shares and second homes currently 20% for higher-rate taxpayers
- Potential new rate: 40-45%
- Business Asset Disposal Relief (formerly Entrepreneurs’ Relief) widely expected to be restricted or scrapped
- Possible reduction in annual exemption (currently £6,000 and already falling)
Inheritance Tax: The Unavoidable Conversation
Perhaps the most emotionally charged area. Pensions have miraculously remained outside the inheritance tax net for years – one of the last great tax advantages. All the signals suggest that’s about to end.
Add in potential restrictions to Business Property Relief and Agricultural Property Relief, plus the freezing of the £325,000 nil-rate band until at least 2030, and we’re looking at what some are already calling a generational wealth reset.
It’s worth remembering that inheritance tax currently brings in about £7 billion a year. Even doubling the take would still leave it as a relatively small revenue raiser compared to income tax or VAT. But politically? It plays differently.
The Non-Dom Crackdown That Keeps Growing
The original plan to scrap non-dom status looked aggressive enough. Then came the four-year foreign income regime for new arrivals, then the crackdown on offshore trusts, and now apparently even UK-born non-doms who left years ago might get caught if they return.
I’ve spoken to several wealth advisors in recent weeks who describe this as the most significant change to the UK’s tax residence rules in decades. London’s position as a magnet for international wealth was already under pressure. This could be the tipping point.
What About the Good News?
There has to be some, right? The Chancellor has repeatedly promised to protect “working people”. That phrase has been examined more closely than any budget line in years, but it appears to mean:
- No increase in the basic rate of income tax
- No rise in employee National Insurance
- No VAT on energy bills (the temporary cut might even be extended)
- Fuel duty likely frozen again
Whether this constitutes genuine protection when employer NI, CGT and inheritance tax are all rising significantly is, shall we say, a matter of perspective.
The Numbers Everyone’s Waiting For
The Office for Budget Responsibility will publish its forecast alongside the statement. Markets are braced for the famous “fiscal headroom” number to be dramatically lower than the £10-15 billion we thought existed after the election.
Some analysts are whispering about a £40 billion black hole. Others think it’s closer to £25 billion. Either way, the Chancellor’s self-imposed fiscal rules – debt falling as a percentage of GDP in five years – look increasingly like they’re going to require some creative accounting.
Changing the debt measure (from PSND to PSND ex-Bank of England, apparently) has become the worst-kept secret in SW1. It would magically create billions of extra headroom. Whether markets buy it is another question entirely.
How This Affects Real People
Let me tell you about a conversation I had last week with a friend who runs a medium-sized engineering firm. He’s already modelling the impact of higher employer NI. His conclusion? Either freeze pay rises for two years, cut the apprenticeship programme, or increase prices by 8% and risk losing contracts.
That’s the reality behind the headlines. These aren’t abstract numbers. They’re decisions that affect jobs, wages, and prices in the real economy.
Meanwhile, parents who’ve been diligently saving into junior ISAs and pensions for their children are frantically recalculating inheritance tax exposure. The phrase “seven-year rule” is being googled more than ever before.
What Happens Next
Whatever Reeves announces today, the political fallout will last for months. Labour came to power promising no return to austerity. Delivering the largest tax-raising budget in modern British history (which this almost certainly will be) while claiming to protect working people requires verbal gymnastics of Olympic standard.
The markets will have their say immediately. Sterling has been remarkably resilient despite the leaks – perhaps because much is already priced in. The FTSE 100, heavily weighted toward international earners, might actually shrug much of this off. The FTSE 250, full of domestic UK companies, is another story entirely.
And then there’s the behavioural response. Higher CGT rates don’t necessarily mean higher revenue if people simply stop selling assets. Higher employer NI doesn’t raise the full projected amount if companies cut jobs or freeze hiring. These are lessons from budgets past that somehow keep needing to be relearned.
One thing feels certain: by teatime today, millions of Britons will be recalculating their financial plans. Some will be looking at bringing forward sales before tax rises hit. Others will be researching gifting strategies or trust arrangements. Financial advisors are going to be very busy in December.
In many ways, this budget feels like the moment the honeymoon ends. The election promises meet the cold reality of public finances. The “change” the country voted for arrives in the form of higher tax bills.
But perhaps that’s democracy in action. We ask governments to fix things, then complain when they send us the bill. Today we discover exactly how much that bill will be.
I’ll be watching the statement live and updating throughout the afternoon. Whatever your personal circumstances – business owner, investor, pensioner, parent saving for children – today matters. Probably more than any budget in fifteen years.
Hold onto your hats. Or perhaps more appropriately, hold onto your wallets.
