Rachel Reeves could move to hike this 1 tax in her next Autumn Budget | Personal Finance | Finance

Just one day after her Spring Statement, Britons have been warned that Rachel Reeves could hike capital gains tax in her next Autumn Budget. Her first fiscal plan in October 2024 laid out an initial rise from 10% to 18% for basic-rate taxpayers, and from 20% to 24% for higher-rate taxpayers. However, this might only be the beginning, experts have warned.

Paul Johnson, director of the Institute for Fiscal Studies (IFS) think tank, said there was a “good chance” the Chancellor would raises taxes in her Autumn Budget. He told The Indepdent there would be “months of speculation over what those tax rises might be – a raid on pensions, a wealth tax on the richest, another hike to capital gains tax?“

Jason Hollands, of wealth adviser Evelyn Partners, added that there was “a real risk” of tax increases if the economy does not grow sufficiently.

He told The Telegraph: “I think the capital gains tax increase we saw was at the lower end of expectations. Might they look at nudging that up a little more? It can’t be ruled out.

“There was even talk of aligning with income tax but that would be very damaging for entrepreneurs. Could they come back and add a little bit more? It’s possible.”

Capital gains tax is paid on profits of more than £3,000 made when an asset is sold. The amount you pay is based on on how much you usually pay in income tax, and how large the profit is.

Ms Reeves also announced in October that the capital gains tax charged on carried interest would rise to 32% from 28%. She argued that “there needs to be a fairer approach to the way carried interest is taxed”.

She said at the time: “We need to drive growth, promote entrepreneurship and support wealth creation, while raising the revenue required to fund our public services and restore our public finances.

“This means the UK will still have the lowest capital-gains tax rate of any European G7 economy.”

Capital gains tax raised £14.5 billion in the 2023-24 tax year, with an estimated 348,000 people and 21,000 trusts paying it.