The UK Budget is set to be announced next Thursday (26 November) and it could have implications for ISA and Self-Invested Personal Pension (SIPP) investors. From taxes that hit bank stocks to new rules that negatively impact housebuilders, there could be some less-than-ideal scenarios for investors.

Here, I’ll look at four scenarios to be prepared for. I’ll also reveal an investment that could potentially provide protection.

Bank stocks

Let’s start with bank stocks because a lot of investors have these in their portfolios. Here, there’s been talk of a surcharge on banking profits.

Personally, I wouldn’t be surprised to see this announced. After all, the FTSE 100’s big five banks – Barclays, HSBC, NatWest, Lloyds and Standard Chartered – booked profits of more than £50bn last year.

If announced, these stocks could come under pressure. That said, they’ve already seen weakness in recent weeks, so the hit may not be too bad.

Housebuilders

Many investors also have housebuilders such as Taylor Wimpey and Persimmon in their portfolios. Here, there are several potential measures that could impact businesses negatively.

One is extra taxes on landlords. This could reduce demand for property and keep shares in this sector depressed.

Consumer discretionary stocks

Right now, it’s unclear as to whether Chancellor Rachel Reeves is going to hike income taxes. A move to raise these would be unpopular (and is looking less likely) but she does have a huge financial black hole to fill.

If she was to raise income taxes, it could negatively impact disposable income levels in the UK. This could potentially hit stocks in the consumer discretionary (non-essentials) space such as JD Sports, Frasers, and Greggs.

Bond proxies

Finally, it’s worth pointing out that if global investors view the Budget as a mess, it could lead to a spike in UK government bond (gilt) yields (like we saw after Liz Truss’s Mini Budget in 2022). This could put pressure on ‘bond proxy’ stocks like Unilever and National Grid, which are often seen as alternatives to bonds due to their stable levels of dividend income.

A stock to look at

The good news is that while the Budget threatens to impact a lot of UK-listed companies, there are plenty of businesses that look relatively immune to it. One such company is Sage (LSE: SGE), which provides accounting and payroll software to small- and medium-sized businesses (SMEs).

There are two main reasons I see this company as Budget resistant. One is that it operates globally and generates a large proportion of its revenues in the US and Europe. Another is that it can potentially benefit from government complexity. When the government changes tax rules, small businesses often turn to software providers like Sage to increase efficiency and stay compliant.

Of course, there are other risks here. A downturn in the global economy is one – this could impact SMEs and lead to companies going bust and cancelling their subscriptions.

The business is performing very well at present though. Earlier this week, it posted 11% year-on-year revenue growth for the year ended 30 September and said that it’s targeting growth of 9% or more this financial year.

Given that level of growth, and the fact that the company has a very reasonable valuation right now, I believe the stock’s worth a closer look. And it seems a few of my colleagues agree.