Millions of UK taxpayers could face an additional bill of up to £377 following the upcoming Autumn Statement, according to new analysis from investment platform AJ Bell.
Budget Announcement Looms
The warning comes as Labour Chancellor Rachel Reeves prepares to deliver her Autumn Budget on November 26, 2025. In an unexpected move just weeks before the statement, Reeves indicated she would provide context for potential tax changes ahead of her formal address.
Laura Suter, Director of Personal Finance at AJ Bell, commented: "The Budget is coming at the end of this month and we've had the clearest sign yet that Chancellor Rachel Reeves is looking to increase taxes."
How the Tax Increase Would Work
Financial experts suggest the most straightforward approach would be increasing the basic rate of income tax from 20% to 21%. This change would affect anyone earning above the tax-free Personal Allowance of £12,570.
The impact would vary significantly depending on income levels:
- Someone earning £15,000 would pay just £24 more annually
- An individual on £35,000 would face an additional £224 per year
- Those earning £50,270 or more would bear the maximum £377 increase
This change would affect all taxpayers, not just employees, as income tax applies to earnings, pension income, rental income, and savings interest.
Revenue Implications and Alternatives
According to HMRC's own estimates, increasing the basic rate to 21% would generate £6.9 billion in the next tax year and £23.4 billion over the following three years.
AJ Bell also considered a more dramatic alternative: adding 1 percentage point to all income tax rates, taking the higher rate to 41% and additional rate to 46%. However, this approach would raise significantly less additional revenue - just £1.6 billion from the higher rate increase and a relatively small £145 million from the additional rate adjustment.
The analysis suggests that focusing on the basic rate provides the most substantial revenue boost for the Treasury while affecting the broadest base of taxpayers.
