What taxes could rise in the Budget?

Chancellor Rachel Reeves is considering tax rises and spending cuts in the Budget, on 26 November.

In a pre-Budget speech, she said she will make the "necessary choices" for the economy, to bring down NHS waiting lists, the national debt and the cost of living.

Before the 2024 general election, Labour had promised not to increase income tax, National Insurance or VAT for working people.

The chancellor's Budget statement outlines government plans for raising or cutting taxes. It also includes big decisions about spending on public services such as health, schools and police.

The statement is made to MPs in the House of Commons. It usually starts at about 12:30, after Prime Minister's Questions, and lasts for about an hour.

The Leader of the Opposition, Conservative MP Kemi Badenoch, will give an immediate response.

Income Tax and National Insurance (NI)

The government could extend a freeze on income tax and NI thresholds, which is due to end in 2028.

Freezing the thresholds means that, as salaries rise over time, more people reach an income level at which they start paying tax and NI or qualify for higher tax rates.

Talking to the BBC in September, Reeves did not rule out extending the freeze.

The Resolution Foundation think tank - which has close links to some members of the government - has recommended cutting 2p from the employee NI rate, while adding the same amount to income tax.

Reeves has signalled that she could focus on wealthy individuals, arguing "those with the broadest shoulders should pay their fair share".

She may change the rules for limited liability partnerships (LLPs), which are sometimes used by high earning professionals. The Times reported that making this group pay employers' National Insurance could raise £2bn.

• How could National Insurance and income tax change in the Budget?
• What questions do you have about the Budget?

Help with energy bills

In October, Reeves told the BBC that she would take "targeted action to deal with cost of living challenges" while inflation remains high.

The BBC understands the government could bring down gas and electricity bills by cutting the current 5% rate of VAT charged on energy, or reducing some regulatory costs which suppliers can pass on to customers.

Welfare

The government is under pressure from its own MPs to scrap the two-child limit for benefit uplifts. Currently, households on universal credit get extra support for the first two, but no additional help for subsequent children.

The FT suggests the chancellor is considering measures to tackle child poverty which stop short of abolishing the limit altogether. That would not reduce child poverty by the end of the parliament, according to the Resolution Foundation.

Property taxes

Reports suggest the government may reform property taxes. It could replace stamp duty - a tax buyers pay on properties above a certain value in England and Northern Ireland - with a property tax.

Landlords could have to pay more taxes, and council tax could be replaced.

Some people selling their main residence may have to pay capital gains tax (CGT).

Isa reform

In July, the chancellor ruled out any immediate reform to cash Isas (Individual Savings Accounts).

However, the FT has since reported that she may cut the cash Isa limit from £20,000 to £10,000.

Business taxes

The TUC, the umbrella group for UK trade unions, has called for higher taxes on banks and online gaming companies.

In September, the chancellor told ITV News that "there is a case for gambling firms paying more".

Youth employment guarantee

Also in September, Reeves said that young people who have been out of work for 18 months will be given paid placements to help them secure full-time employment.

Small parcels

The FT has reported that the government may close a tax loophole which UK firms argue gives an unfair advantage to foreign online retailers like Shein.

At the moment, overseas retailers can send packages worth less than £135 to the UK without incurring import duties.

The government has repeatedly said that boosting the economy is a key priority.

A growing economy usually means people spend more, extra jobs are created, more tax is paid and workers get better pay rises.

In October, the International Monetary Fund (IMF) forecast that the UK was set to be the second-fastest-growing major economy in 2025. However, it also predicted that the UK will face the highest rate of inflation among G7 nations in 2025 and 2026.

The latest official figures show the UK economy grew by 0.1% in August, after a 0.1% contraction in July. Between June and August, UK GDP grew by 0.3%, down from 0.6% in the previous three months.

Meanwhile, government borrowing - the difference between public spending and tax income - reached £20.2bn in September. That was the highest level seen for the month in five years, driven by an increase in debt interest payments.

Prices are rising faster than expected. Inflation held steady at 3.8% in the year to September - above the Bank of England's 2% target.

In August, the Bank cut interest rates to 4%, the lowest level for more than two years. It acted because of fears that the jobs market was weakening.

It held rates at its next meeting in September, arguing the UK was "not out of the woods" on inflation.

MPs will debate the measures for four days, before voting on them.

If approved, any tax changes in the Budget can come into effect immediately. However, the government must pass a finance bill to make them permanent.

Further details about Budget measures - and what they cost - are published by the Treasury, the government's economic and finance ministry.

The Office of Budget Responsibility (OBR) - which monitors the UK economy - will also release its assessment of the government's plans alongside its latest forecast.