The Bank of England has knocked the main interest rate down to 4% today, cutting it by a quarter‑point from 4.25%. It’s the fifth cut in a year and brings the rate to its lowest since March 2023.

The decision was a close call: the nine‑member Monetary Policy Committee split 5‑4, requiring an unusual second round of voting to reach agreement. Bank governor Andrew Bailey cautioned that future cuts will have to be gradual and careful, especially given expectations that inflation may still hit 4% by September.

This cut offers relief to homeowners with tracker‑rate mortgages, reducing monthly repayments, but savers are likely to see lower returns on easy‑access accounts.

Shared home ownership offers a more accessible route to owning a home for those who cannot afford the full deposit or mortgage on a property that suits their needs. Under this scheme, buyers purchase a share of a property, typically between 10% and 75% of its market value and pay rent on the remaining portion to a housing provider.

The initial purchase can be funded through a mortgage or savings, along with a deposit usually ranging from 5% to 10% of the share. Over time, owners have the option to buy additional shares in the property through a process known as "staircasing," reducing the amount of rent paid to the landlord.

Shared ownership lets buyers get on the housing ladder with a smaller deposit and a part-rent, part-buy model.

Shared ownership properties can be new builds or resales and are often available through housing associations or local councils. For individuals with long-term disabilities, adapted homes may also be available through the scheme.

All shared ownership homes are leasehold, and buyers are typically responsible for service charges and ground rent.

Different rules apply in Northern Ireland, Scotland and Wales where alternative schemes, such as Right to Shared Ownership, may apply if you are currently renting.

Shared ownership can help individuals get on the ladder towards full home ownership making it a valuable option to consider.

The impact of frozen personal allowances often leads to fiscal drag, a situation where individuals pay more tax as their earnings rise without a corresponding increase in allowances.

This occurs because tax thresholds remain fixed while wages increase, thus pushing more people into higher tax brackets or causing them to pay tax for the first time. Since April 2022, a number of key tax thresholds, including personal allowances, have been frozen and will remain so until at least the 2028-29 tax year.

Fiscal drag is largely driven by inflation, wage growth and the government's decision to keep tax thresholds unchanged. As inflation erodes the value of money, wages rise nominally, but without a rise in allowances, taxpayers are increasingly “dragged” into higher tax bands. This increases tax revenue for the government without changing tax rates, which is why HM Treasury often uses frozen thresholds as a means to boost tax receipts.

Adjusting tax thresholds to align with inflation or another index is referred to as "indexation." The government’s approach to increasing certain thresholds each year based on inflation is called "uprating." However, this policy is not consistently applied. When thresholds are frozen, tax revenues increase for HM Treasury without the need for any adjustments in tax rates. According to the latest estimate from the Office for Budget Responsibility (OBR), the freeze on Income Tax thresholds is projected to generate an additional £38 billion annually by 2029-30.

As we look ahead to the Autumn Budget 2025, it is clear that the Chancellor, Rachel Reeves, will be under pressure to balance public expectations with fiscal reality. A combination of reduced growth forecasts, increased borrowing costs, and the reversal of planned welfare savings has narrowed the government’s room for manoeuvre.

Early signals suggest that the upcoming Budget, expected in late October or early November, will avoid headline-grabbing tax rate increases but may rely instead on less visible means of raising revenue.

One of the most likely measures is a further extension of the freeze on Income Tax thresholds. This approach, known as ‘fiscal drag’, increases the tax take without altering rates by pulling more taxpayers into higher bands as earnings rise. For many clients, this could mean a higher overall tax burden despite unchanged tax rates.

We also expect a closer look at Capital Gains Tax (CGT). Recent years have seen CGT receipts fall short of Treasury forecasts. This may prompt a review of CGT rates and allowances, especially for higher earners. Clients who are considering asset disposals may benefit from planning ahead of any potential changes.

Inheritance Tax (IHT) is also under the spotlight, especially following protests in the agricultural sector. Proposals such as tightening asset reliefs or reforming lifetime gifting rules could impact clients with family businesses or larger estates. It may be timely for those affected to review succession plans.

There is also speculation that the Chancellor will examine tax reliefs linked to ISAs and pensions. Any restriction here could affect retirement planning strategies, particularly for those making full use of current allowances.

While a rise in corporation tax has been played down, the Chancellor may still consider smaller adjustments to employer National Insurance or sector-specific tax reliefs. Departmental spending cuts and changes to benefit entitlements may also be used to help bridge the fiscal gap.

In summary, the Autumn Budget 2025 is expected to raise between £10 and £15 billion through a range of threshold freezes and targeted tax relief reforms. Now is a good time for clients to review their tax and financial plans. We are here to support you in preparing for the changes ahead.

Please contact us if you would like to arrange a review of your personal or business tax position in advance of the Budget.

HMRC missed out on £46.8bn in tax last year. Small businesses and Corporation Tax make up the biggest share of the shortfall.

The tax gap for the 2023-24 tax year has been published and is estimated to be 5.3% of total theoretical tax liabilities.

The tax gap is basically the difference between the amount of tax that should have been paid to HMRC and the amount of tax collected by the Exchequer. The gap includes tax that has been avoided in the UK’s black economy, by criminal activities, through tax avoidance and evasion. However, it also includes simple errors made by taxpayers in calculating the tax they owe as well as outstanding tax due from businesses that have become insolvent. 

In monetary terms, the tax gap is equivalent to lost tax of £46.8 billion. This means that HMRC collected £829.2 billion or 94.7% of all tax due.

The government has announced plans to raise a further £7.5 billion through its measures to close the tax gap.

Some of the key findings from this year’s calculations show:

• Small businesses represent the largest proportion of the tax gap (60%).
• Corporation Tax accounts for 40% of the total tax gap.
• Failure to take reasonable care (31%), error (15%) and evasion (14%) are among the main behavioural reasons for the overall tax gap.

As announced at Spending Review 2025, £1.7 billion will be provided to HMRC over four years to fund an additional 5,500 compliance and 2,400 debt management staff in order to try and ensure that more of the tax due is paid, to fund public services.