The Chancellor of the Exchequer, Rt Hon Rachel Reeves MP, delivered her second Budget on Wednesday 26 November 2025.
The challenges that she faced were significant. They included:
- a highly volatile geoeconomic climate;
- anaemic growth –HM Treasury forecasts predicting an average of 1.4% gross domestic product (GDP) growth for 2025, slowing to 1.2% in 2026;
- a current budget deficit (i.e. borrowing required to fund day-to-day spending) – ONS figures showing the total current budget deficit for the seven months to the end of October 2025 to be £83.9bn (£7.4bn (or 9.7%) more than in the same seven-month period of 2024); and
- elevated net debt – ONS figures showing public sector net debt equivalent to 94.5% of GDP at the end of October 2025 (just 0.2% less than at the same time in 2024).
In addition, the Chancellor restricted her policy choices both:
- fiscally – due to her two 'non-negotiable' fiscal rules to:
- push the current budget into surplus by 2029-30, and
- ensure the ratio of debt-to-GDP (net debt) is declining in 2029-30; and
- politically – due to the Labour government's 2024 Manifesto pledge to "not increase taxes on working people… [and] not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT": the three single largest revenue-raising levers available.
In an unprecedented pre-Budget, Scene Setter speech on 4 November, the Chancellor all but confirmed both what has been known for some time - that taxes would go up – but also that the tax rises were likely to be substantial. All that remains to be seen is which taxes, and by how much.
Against this backdrop, speculation was rife that HM Treasury was considering a broad range of tax policy changes. This page tracked 56 of the more prominent proposals that surfaced across the main taxes and sectors; 20 of those were announced.
