Autumn Budget draws mixed response from Big Four

The chancellor’s Autumn Budget prompted a wide-ranging reaction from Big Four tax specialists and economists, who said the package delivered a substantial rise in taxes while offering a more settled outlook for businesses after months of speculation.Tim Sarson, head of tax policy at KPMG UK, said the Budget had been “the most heavily trailed in recent history”, with the final announcements broadly matching expectations. He said businesses would be “relieved” to have avoided major new burdens, though near-term pressures were expected to persist.

Among the most significant measures was the extension of frozen income tax and national insurance thresholds, which will now remain in place until 2031. Economists said the decision shifts the weight of consolidation onto households and will continue to draw more taxpayers into higher bands, while the ICAEW yesterday said the move would place HMRC under “considerable strain”. 

Amanda Tickel, head of tax and trade policy at Deloitte UK, described the statement as a “big, broad Budget” that raised £26bn in taxes, with “the burden resting more on individuals than businesses”. She noted that the extension of frozen thresholds had “gone beyond what was trailed”, raising an estimated £7.8bn in 2029-30.

Other reactions centred on the degree of predictability and the absence of several feared measures. Marco Amitrano, senior partner of PwC UK, said the clarity provided would help companies chart a more stable course. He warned, however, that the next test would be whether firms trust that the tax system is settling after a period of volatility.

The Office for Budget Responsibility’s (OBR’s) new forecasts offered a mixed picture. While productivity was downgraded again, the revisions were less severe than some had expected. Higher wage growth is projected to deliver stronger revenues, but the pace of economic expansion was trimmed back from earlier outlooks, and the OBR now expects growth to average 1.5% a year from 2027.

Yael Selfin, vice chair and chief economist at KPMG UK, said the OBR’s judgement reflected “an acceptance of recent productivity underperformance”, even as its alternative scenario pointed to the potential for faster growth if the UK adopts artificial intelligence more rapidly than assumed.

She added that the Chancellor had “stuck to the letter” of manifesto commitments by again choosing not to raise income tax rates, instead relying on threshold freezes that will bring millions more into higher bands by 2031. She said the impact would be felt primarily by households, with taxes rising to 38% of GDP by the end of the forecast period.

The Budget’s structure was described by several analysts as unusually dense, comprising dozens of distinct interventions across personal taxation, business incentives and the administration of the system. Chris Sanger, UK tax policy leader at EY, said the Chancellor had delivered “a ‘smorgasbord’ of measures”, though he argued the breadth made it resemble “more of a stew” once combined.

Sanger said the core of the package lay in “threshold freezes, the increase in employment and savings taxes, the new council tax surcharge and the mileage charge on EVs”, balanced by limited “sweeteners” such as the freeze in fuel duty.

Amitrano said it was “encouraging that some of the anticipated tax rises on business didn’t materialise”. He added: “Companies now have a clearer line of sight to plan, invest and get moving at pace again.”

The scale of near-term household impact and wider public spending restraint drew concern from economists. Selfin said the historic rise in revenues would “only just” cover commitments in health and defence, leaving other departments facing flat budgets in real terms until 2028-29 and potential cuts in 2029-30.

Barret Kupelian, chief economist at PwC UK, meanwhile said the Budget “finished what last year’s Budget started”, consolidating reduced fiscal headroom by raising roughly £24bn in taxes and increasing spending by around £2bn at the end of the forecast horizon. He said most of the tax rises would take effect from 2027-28, with the earlier spending moves likely to increase borrowing in the near term.

He added that freezing income tax thresholds gave the strategy “a firmer footing”, helping rebuild the Chancellor’s margin against the Government’s fiscal rule. He warned, however, that markets may view the staging of support and consolidation with caution.

Sarson said the Budget’s collection of policy shifts carried “major ramifications for many over the coming months and years”, while providing “a better defined roadmap for the financial future of the country”. Nonetheless he noted that businesses would continue to face challenges, including national insurance on salary sacrifice pensions and changes to the minimum wage.

Tickel meanwhile pointed to the Budget’s “continued focus on closing the tax gap” through measures such as a whistleblower scheme, expected to bring in about £10bn a year by the end of the Parliament. She said the total 88 measures “added to the complexity” of the tax system, though the phasing-in of changes would give time to adjust.

Looking ahead, Amitrano said the priority should shift “from the Budget itself to a sustained programme for growth”, adding that the fiscal headroom now available offered “cautious optimism” that the Government could avoid returning to a similar position next year.

Kupelian concluded the rebuilt headroom should give households and businesses “greater confidence to start investing and spending over time”. He likened fiscal space to oxygen, saying: “You do not notice it until it runs thin.”