The Treasury’s coffers could soon get a major boost, at the expense of the nation’s pay packets. HMRC is reportedly preparing to send out tax bills averaging £377 per person, under a new fiscal direction expected from Labour’s Chancellor, Rachel Reeves, during her Autumn Budget on 26 November 2025.
This move, according to financial experts, could mark the first significant shift in income taxation under the Labour government, and it’s likely to hit almost every taxpayer in Britain.
A potential tax hike on the horizon
Experts at AJ Bell have warned that: “The simplest option would be to increase the basic rate of income tax by one percentage point, taking it from 20% up to 21%.
The move would impact anyone who earns more than the tax-free Personal Allowance of £12,570, but those who earn more would pay more.”
If implemented, this single percentage point could cost some households hundreds each year. Those earning £50,270 or more would face the maximum rise of £377, while those on £15,000 could see a modest £24 increase.
Mid-income earners at £35,000 would be out by around £224 annually. The change would affect anyone with taxable income, not only employees but also pensioners, landlords, and savers.
“A more dramatic option would be to add 1 percentage point onto all income tax rates, also taking the higher rate up to 41% and the additional rate to 46%. However, the latter doesn’t raise that much more money for the Government,” the firm explained.
According to HMRC’s own data, lifting the basic rate alone could pull in £6.9 billion next year, and a staggering £23.4 billion over the next three years.
Growing signals from Westminster
Financial insiders say the groundwork for this policy has already been laid. Laura Suter, AJ Bell’s Director of Personal Finance, said: “The Budget is coming at the end of this month and we’ve had the clearest sign yet that Chancellor Rachel Reeves is looking to increase taxes.”
She added: “In an unexpected speech just 20 days before the Budget, Reeves paved the way for future tax rises, saying she wanted to give the context ahead of her speech on 26th November.”
That “context”, as Suter puts it, seems to hint at a deliberate attempt by the Chancellor to prepare the public for what could be one of the most wide-reaching tax adjustments in recent years.
What does it mean for taxpayers?
If the basic rate hike is confirmed, HMRC will effectively raise taxes on all earners above the current threshold, a move that would instantly touch millions of working Britons.
The measure may help the Government manage spiralling public spending and plug budget gaps left by economic pressures, but for taxpayers already battling high living costs, it could sting.
Analysts are divided on whether this move is a “necessary correction” or a “fresh burden” on households.
Yet, one thing is clear: come 26 November, all eyes will be on Rachel Reeves and HMRC, as the Autumn Budget sets the tone for the country’s financial landscape heading into 2026.
HMRC’s possible £377 annual bill signals Labour’s readiness to raise revenue through income tax, with implications for every earner above £12,570. The full details will be revealed when the Chancellor steps up to the Despatch Box later this month.
