Announced on 11 June 2025, the Spending Review is set to increase day-to-day spending from £517.5 billion in 2025/26 to £583.9 billion in 2028/29 and investment spending from £131.3 billion in 2025/26 to £151.9 billion in 2029/30.

With the NHS and Ministry of Defence both in line for significant funding increases, there may be business opportunities for those working within these sectors.

This is coupled with a focus on new housing, refurbished schools, and an investment in R&D.

According to Rachel Reeves, the Spending Review is designed to “invest in Britain’s security, in Britain’s health and to grow Britain’s economy so that working people are better off.”

While the planned investments in various sectors like the NHS and schools are welcomed by many, there is an increasing concern that the money required to pay for this will come from the very people who are most economically vulnerable.

Even businesses that operate in sectors that are set to receive funds have raised concerns about the impact the Spending Review could have on an already fragile economy.

We unpack the current situation and what it might mean for the future.

How has the public responded to the Spending Review?

Anxiety is rife in the wake of the Spending Review.

Despite most Britons believing that the priorities of the Spending Review are correct, 67 per cent believe that the Government will need to increase taxes or borrowing in the future to pay for them.

These are figures from the latest YouGov poll that sought to understand the impact of the Spending Review.

Nearly half of Britons continue to believe that Rachel Reeves is a bad Chancellor, with most Britons believing the economy to be in a bad way.

Research from IPSOS has also found that eight in ten Britons expect tax rises to occur this year to pay for the Spending Review.

Will the Spending Review lead to higher taxes?

The writing is on the wall for a tax increase later this year.

Reeves has been careful to not rule out the possibility of a tax rise, and the early indicators seem to point to Council Tax being the source of the increase.

Councils have been granted the power to increase Council Tax by up to five per cent, and it seems likely that most authorities will capitalise on this opportunity.

Businesses may also find themselves shouldering the burden.

This April saw a rise in employer National Insurance Contributions (NICs), which, coupled with other rising costs, have resulted in some businesses feeling the pressure.

If Labour’s pledge to keep Income Tax and employee NICs frozen remains true, then employers could face further increases to costs in the coming months.

These tax concerns are set against the backdrop of ongoing frustrations around Inheritance Tax (IHT) and the impact it has on the agriculture sector specifically.

Given that Labour is rummaging down the sofa cushions for any spare change, a reversal on IHT is unlikely, as the implementation of the rises would allow for easier financing of the proposed investments.

Ultimately though, it is anyone’s guess as to which taxes will rise, when they will rise, and by how much.

What is certain is that accountants will be tasked with utilising tax-efficient saving and investment strategies to shield individuals and businesses from as much of the burden as possible.

Rather than quelling fears of economic uncertainty, Reeves has succeeded in leaving questions hanging over individuals and businesses alike.

Our expert team are on hand to help you keep up with all the changes and prepare for the future.

Get your finances ready for whatever the future holds. Speak to our team today!