An interview with a cabinet minister has all but upgraded Autumn Budget 2025 to an event 'inevitably' increasing contractor taxation, experts are warning ContractorUK.
Before the interview with Darren Jones, formerly the chancellor's deputy, contractors were told by experts to merely "be on watch" for tax hikes on Nov 26th.
Issued in September, that alert was based on advisers being extra cautious as, actually, Rachel Reeves had reassured that bruising Autumn Budget 2024 was a one-off.
'Never again have to repeat a Budget like that'
Alluding to her Oct 31st 2024 package, Reeves said in June 2025: "We've already drawn a line under the Tory mismanagement with tax rises last year.
"And we will never have to repeat a Budget like that again."
But in his recently published interview, Mr Jones declined to confirm that the chancellor's statement next month will even honour Labour's manifesto.
'We have honoured Labour election manifesto commitments'
The Cabinet Office minister preferred to say that Labour's 2024 pre-election vows not to raise income tax and VAT stand, as of "today."
And they stand as of Reeves' three fiscal set pieces so far.
He told Sky News: "Our actions in the last budget through the spring statement, through the spending review, [show] we honour those commitments".
'Chancellor will tell the country at the budget'
In his underreported September 29th interview, Jones added — auspiciously for contractor take-home pay: "And we're going to keep doing so."
But apparently pressed on whether Autumn Budget 2025 would put up taxation overall, the minister clammed up, reportedly saying:
"When the chancellor is in a position to make decisions, which she will be in the coming weeks, she will make those decisions, and she'll tell the country at the budget in the normal way."
'Non-committal'
Christian Hickmott, of Integro Accounting, says the effective silence in answer to the question of whether contractors' HMRC bills will soon rise speaks volumes.
"Looking at [Jones' comments]… all I can say is this…is a textbook example of a politician carefully avoiding direct answers by remaining non-committal.
"To be fair, he was being asked questions he likely couldn't answer definitively at this stage, which explains why the [Sky News] article is so light on substance."
'Little to reassure contractors that Autumn Budget 2025 will differ from 2024's'
Integro's managing director, Mr Hickmott hinted that contractors might not be as sympathetic, given they face a budget in just 40 days.
He told ContractorUK: "[Jones'] replies like…'The manifesto stands today,' and 'Any decisions will be announced in the normal way' are classic avoidance.
"But the vague, evasive tone of his comments will do little to reassure contractors that this time around autumn's budget will be any different."
'Contractors bracing themselves for inevitable announcement of potential tax increases'
Michael McCullion, of Bright Ideas Accountancy, fears that it won't be any different — and may even be worse, as contractor tax increases now seem inevitable to him.
"The [minister's comments] do not sound or look great when it comes to tax raids on the cards, do they?
"As Reeves' fiscal update nears, self-employed contractors should brace themselves for the inevitable announcements of potential tax rises," McCullion told ContractorUK.
'Unsurprising ministers are refusing to rule out budget tax increases'
The issue for the government is that it's "left itself with very little wriggle room to raise funds in the current environment of low economic growth."
Matt Fryer, of Brookson, yesterday fleshed out his assessment to ContractorUK:
"It is therefore not surprising that senior ministers are now refusing to rule out a potential raft of tax rises being announced in the November budget."
'Capital Gains Tax on Nov 26th could be pushed closer to income tax levels'
Shown Mr Jones' comments, the Accountancy Partnership (AP) said the personal allowance and income tax thresholds would now "likely" be frozen by Reeves.
"[More positively] the chancellor is reportedly considering raising the VAT registration threshold to £100,000.
"[However] Capital Gains Tax could be pushed closer to income tax levels," the AP's Lee Murphy continued to ContractorUK. "And the annual exempt amount could be squeezed even further."
The Accountancy Partnership's managing director, Mr Murphy fears tax-free cash, pensions, and salary sacrifice might all also be "in the firing line."
'Tax advantageous contractor strategy salary-sacrifice under threat'
Brookson's Mr Fryer has precisely the same concern for Nov 26th.
"Of the remaining tax advantageous strategies for contractors, the one which I fear could be under threat is tax relief on pension contributions and the ability to sacrifice taxable salary for pension contributions."
Bright Ideas Accountancy, where Mr McCullion is a director, says the tax raids that the chancellor will invariably approve might hit more contractors, more directly.
'Dividend tax rise and/or dividend allowance reduction'
He says: "The government is under increasing pressure to generate more revenue, and it's the self-employed who always find themselves in the firing line.
"Therefore, we could be looking at a rise in dividend tax rates at Autumn Budget 2025, or further reductions in the dividend allowance.
"Either of those, and worryingly both of those, would hit contractors' take-home pay where they trade through a limited company.
"And there have also been rumours of a decrease in the VAT registration threshold, which would only serve to bring more into the VAT net, with all the associated costs and admin time that brings."
'Angst-hit contractors already battling IR35 uncertainty'
In their Autumn Budget forecasts yesterday to ContractorUK, both McCullion and Fryer spoke of the off-payroll working rules.
But McCullion only uttered "IR35" to highlight the "uncertainty" that contractors have long contended with ("angst-hit contractors already feel the squeeze").
Fryer sees the IR35 rules similarly, citing "OPW" as part of the torturous legislative journey that contract professionals have endured (since 2000, but in earnest since 2017).
'Encouraging the chancellor to incentivise the flexible labour market'
Brookson's boss told ContractorUK in a statement: "UK contracting has in recent years seen a reduction in the tax breaks offered to contractors; changes to the Flat Rate VAT scheme, a tightening of the Off-Payroll Working (OPW) rules, and an all but removal of tax-free expenses for umbrella company employees
"In an ideal world, we tax advisers would now be encouraging a chancellor heading into an autumn budget to make changes to the tax system to incentivise the flexible labour market — such as a rethink of the restrictive OPW rules.
"However, given the economic backdrop, and now cabinet minister Jones's comments, I cannot envisage there being much in the way of positive news for contractors six Wednesdays from today. I hope I'm proven wrong."
Speaking on Tuesday, Oct 15th 2025, about how she'll tackle the UK's economic challenges, Reeves reportedly said: "Of course, we're looking at tax and spending as well."
