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Chancellor to unveil series of tax hikes to fill black hole in public finances in highly anticipated Budget on Wednesday
Caitlin Doherty,Athena StavrouWednesday 26 November 2025 07:13 GMTComments
CloseRachel Reeves says Budget will deliver on Labour's promise of change
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Judgement day looms for Rachel Reeves and Sir Keir Starmer as the chancellor will unveil her long-awaited Budget on Wednesday, after months of speculation about what her statement could mean for voters’ wallets.
Ms Reeves is expected to unveil a ‘smorgasbord’ of tax rises as she looks to plug the gap in the country’s finances worth billions, after an apparent government U-turn on the idea of bringing in an increase to income tax.
It comes after ministers announced two tax changes on Tuesday. Health secretary Wes Streeting confirmed the expansion of the soft drinks industry levy - otherwise known as the sugar tax - to cover packaged milkshakes and lattes, while communities secretary Steve Reed announced that mayors in England will be given the power to impose a tourist tax, with a “modest” charge on visitors staying in hotels, bed and breakfasts, guesthouses and holiday lets.
Ministers also confirmed that minimum wage rates will increase next year, up to £12.71 for adults aged 21 and over, and to £10.85 for 18 - 20 year olds.
Key Points
- Rachel Reeves to deliver long-awaited Budget
- How Budget day will unfold
- Income tax thresholds will drag more people into tax
- What we can expect in the Budget
What we can expect in Budget
Rachel Reeves is poised to deliver her Budget this week, with intense speculation surrounding potential tax increases designed to stabilise the nation's finances.
The chancellor is anticipated to outline measures addressing a significant public funds deficit and establishing a more robust financial reserve, aiming to reduce future demands on taxpayers.
These proposals are expected to be announced at approximately 12:30pm on Wednesday, 26 November.
The Independent’s Albert Toth reports:
Rachel Reeves announces the Budget on Wednesday. Here’s what to expect
The Chancellor is expected to announce tax hikes as part of the 2025 autumn BudgetTom Barnes26 November 2025 07:09How Budget day will unfold
Chancellor Rachel Reeves will deliver the Autumn Budget at approximately 12:30pm on Wednesday after Prime Minister’s Questions.
HM Treasury will then release the budget documents, which provide the technical details of the economic forecasts and proposed tax changes.
The leader of the opposition, Kemi Badenoch, will then respond, followed by the leader of the third largest party, Sir Ed Davey.
The Office for Budget Responsibility (OBR), the budget watchdog, will also publish revised forecasts for the economy and public finances.
(AP)Tom Barnes26 November 2025 07:07Minimum wage to be increased
Minimum wage rates are to be increased next year, the government has announced ahead of the Budget.
From next April the national living wage will rise by 4.1 per cent to £12.71 an hour for eligible workers aged 21 and over, which the government said will increase gross annual earnings of a full-time worker on the rate by £900, benefiting around 2.4 million low-paid workers.
The national minimum wage rate for 18 to 20-year-olds will increase by 8.5 per cent to £10.85 an hour, while for 16 to 17 year olds it will increase to £8 per hour.
However, amid a struggling job market for young people, the Resolution Foundation has warned that "these steep increases risk causing more harm than good if they put firms off hiring".
Caitlin Doherty26 November 2025 07:05Income tax thresholds set to be frozen
The freeze on income tax thresholds is set to be extended when Rachel Reeves delivers her Budget on Wednesday, according to reports.
The chancellor has dropped plans to hike the headline rate of income tax, which would have breached Labour's pledge around not putting up national insurance, VAT or income tax.
A freeze would see more people dragged into paying tax for the first time or shifted into a higher rate as wages increase.
According to The Times, the thresholds are set to be frozen for a further two years, as Ms Reeves looks to a 'smorgasbord' of tax rises to fill the gaps in the public finances.
Caitlin Doherty26 November 2025 07:05Rachel Reeves to deliver long-awaited Budget
Rachel Reeves will deliver her long-awaited Budget today, with a raft of tax rises expected as she looks to plug the gaps in the public finances.
Speculation has swirled for months as to what the chancellor will announce in the financial statement.
The chancellor had laid the groundwork for a manifesto-busting increase to income tax, but that idea has seemingly been abandoned.
Speaking ahead of the Budget, Ms Reeves said that people are "angry at unfairness" in the UK economy,
In a filmed address, she said: "“I have to be honest that the damage done from austerity, a chaotic Brexit and the pandemic were worse than we thought.
“But I’m not going to duck those challenges, and nor will I accept that our past must define our future. It doesn’t have to."
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(Kirsty O'Connor/Treasury)Caitlin Doherty26 November 2025 07:04More about
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