# Reeves signals tax rises being considered at Budget during Saudi Arabia visit

By Sarah Coles — 2025-10-27

Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “HMRC calculates the impact of raising income tax every year.

“The figures from June 2025 show adding 1p on basic rate income tax could raise £6.9 billion more in 2026/7, £8.25 billion in 2027/8 and £8.2 billion in 2028/9.

“Adding 1p on higher rate income tax could raise £1.6 billion more in 2026/7, £2.15 billion in 2027/28 and £2.1 billion in 2028/9.

“The government is between a rock and a hard place for the Autumn Budget.

“They need to decide whether to opt for a host of small tax rises, or to make changes to one of the big hitters – like income tax or National Insurance.

“Neither would be easier or popular, but these figures show just how much can be raised from a small change to a big tax.

“They might opt to make a host of smaller changes, raising more modest chunks of tax with each one, but causing serious issues for anyone affected.

“The more changes they make, the more far-reaching these impacts become.

“The Budget last year demonstrated the widespread dissatisfaction that can come from this approach.

“Alternatively, they could opt to change a big hitter – raising more in a single move like adding a penny to income tax.

“Politically, it would be incredibly difficult, because they pledged to leave these alone in their election manifesto and have repeatedly said they won’t raise taxes for working people. However, these figures show just how much money this could raise.

“In an environment where there are no great and popular choices, the government will need to find the least worst options, so we need to consider the potential impact of these changes.

“If you are concerned about income tax, then making extra pension or SIPP contributions is an incredibly useful way to reduce your total taxable income.

“They may also enable you to stay below a tax threshold – cutting your highest rate of tax.

“It won’t give you more money in your pocket today, but it will help you build a more resilient retirement.

“It also makes sense to plan ahead. If you’re aiming for a retirement income that may exceed future tax thresholds, you can consider using cash and stocks and shares ISAs alongside your pension.

“Income you take from an ISA is tax free, so it gives you real flexibility in managing your tax bill in retirement.”

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