The Fourth Horseman Arrives: Tax Rises Loom as Borrowing Hits Five-Year High

Despite the relative success of the second state visit by President Trump, where a £150 billion investment deal was signed, Chancellor Rachel Reeves was brought back to reality today after figures were released showing borrowing for August reached 18 billion – a five year high say leading audit, tax and business advisory firm, Blick Rothenberg.

Tom Goddard a senior associate at the firm said: “Monthly figures from the Office of National Statistics show borrowing at a five-year high, at £18bn. Total borrowing exceeded £80bn for the five months from April to August 2025.”

He added: “The fourth horseman of any Chancellors apocalypse (tax rises) will seemingly join the other three horseman of sluggish growth, a downgrade on productivity, and increased borrowing that will likely haunt Chancellor Reeves from now till Budget Day (26 November).

“The reported blackhole, now estimated to be £30bn, will no doubt have to plugged by creative tax hikes to bring Chancellor Reeves back within her fiscal rules.”

Tom said: “We recently forecasted the possible taxes that we could see increased in the Autumn budget. This included property taxes and inheritance taxes (IHT) as likely targets for reform.

“However, based on the figures published today IHT and Stanp Duty Land Tax will likely not bring in the required revenue that Rachel Reeves hopes for.”

Tom added: “looking at the stats published by HMRC, we can see that IHT, although showing an increase of 8.46% on the past 12 months compared to the year prior, took only £8.4bn from September 2024 to August 2025 (less than 1% of HMRC’s total receipts). Likewise, Stamp Duty Land Tax (SDLT), although showing an impressive 22.25% growth for the last 12 months compared to the prior period, only accounts for 1.6% of total receipts.”

Tom said: “The manifesto pledges made by the Chancellor and her party not to increase income tax, VAT or NIC, have thus forced the Chancellor into seeking alternative tax rises on lower revenue generating methods to fill this fiscal blackhole. Although many suggest SDLT is ripe for reform, would we be seeing SDLT generate so much conversation if such manifesto pledges had not been made?

Tom added: “SDLT may have its moment in the spotlight, no doubt of course exacerbated by the recent stories involving key political figures. However it is now clear that these tax reforms if used, will not bring in the money she was expecting based on the figures published today, unless of course a serious re-think is had. Other tax rises are now inevitable in the Autumn Budget.”