It’s fast becoming an annual tradition – a bit like the Christmas pantomime, only less entertaining. In the run-up we’ll no doubt be treated to endless speculation. I heard on the radio that even Tony Blair was sometimes kept in the dark about Gordon Brown’s Budgets – who knows if that’s true, but it certainly feels like we live in a world of constant chatter, much of which turns out to be hot air. A bit like football transfer rumours on deadline day (though I must admit, I do enjoy those!).
Every year, the same ‘possible changes’ get wheeled out –and a few new ones added for good measure. Property taxes on homes above £500,000, National Insurance on rental income, tweaks to VAT exemptions, or a flat rate of tax relief on pensions are some of the more recent ones.
The reality? At this stage, nobody knows what Rachel Reeves will announce. The only certainty is that she’ll need to balance the books –whether through higher taxes, reduced spending, or a mix of both. Realistically, spending cuts will be tough, given the difficulties Labour faced pushing through welfare reforms, even with a large majority.
We’ve seen before how unsettling speculation can be. Last year, rumours that tax-free cash might be scrapped led some people to draw benefits unnecessarily – only for nothing to happen. It was a reminder that the best decisions are based on facts, not guesswork.
Maybe, when we look back, we’ll wonder what all the fuss was about. Maybe it’ll be a Budget for the history books. My guess? Something in between. With inflation still above the Bank of England’s 2% target, growth stubbornly weak (stagflation, anyone?), and the Chancellor tied to her own spending rules – requiring government spending to be in surplus by 2029–30,with borrowing allowed only for capital investment – there’s little wriggle room. On top of that, the latest whispers suggest a black hole of somewhere between £20–£40 billion to fill.
We’ve certainly seen plenty of change already. From April2027, pension benefits will be included when calculating inheritance tax. From April 2024, the Lifetime Allowance (LTA) was scrapped and replaced with the Lump Sum Allowance (LSA) and the Lump Sum and Death Benefit Allowance (LSDBA). More changes look inevitable… but what they’ll be, and who they’ll hit hardest, is anyone’s guess.
So, my message is twofold:
Pre-Budget: if you can’t do anything about it, don’t worry – either enjoy the speculation or ignore it.
Post-Budget: if you can do something, we’ll take action.
