UK government borrowing was £20.7 billion for June, according to new figures from the Office for National Statistics (ONS) - an increase of £6.6 billion compared to the same month last year.
While the overall figure is broadly in line with forecasts for the year so far, the rise has added pressure on Chancellor Rachel Reeves ahead of the Autumn Budget. Higher spending on public services, rising interest payments on debt, and weaker-than-expected tax receipts have contributed to the increase.
What does this mean for taxpayers?
Economists now widely expect that the Chancellor will need to find £15–25 billion later this year to meet her fiscal rules - particularly the commitment to:
- Not borrow for day-to-day spending
- Get debt falling as a share of national income by 2029–30
This makes tax rises a real possibility in the upcoming Budget.
What kind of tax changes could we see?
Obviously, nothing has been confirmed yet, but there is speculation about extending the freeze on income tax thresholds beyond 2028, which brings more people into higher tax bands over time.
Other possibilities might include targeted tax increases on capital gains, dividends, pensions, or business reliefs, or maybe reforms to tax breaks - particularly those perceived as benefiting higher earners or larger businesses.
At this stage it’s difficult to predict what could change, however we’ll continue monitoring developments as the Budget approaches. If you’d like to talk through your tax planning or discuss what changes could mean for you, please get in touch.
Charity trustees in England and Wales now have new legal powers when considering moral payments: payments made because there is a moral rather than strictly legal obligation to transfer some of a charity’s property.
The deadline for filing your 2024/25 Self Assessment tax return is fast approaching. You must submit your return and pay any tax due by 31 January 2026 to avoid penalties and interest.