Speculation is rife with just a couple of months to go until the first Autumn Budget for new Prime Minister Andy Burnham and Chancellor John Healey.
“It’s an unusual high-stakes moment,” said Coutts, as Burnham has only just returned to Parliament as an MP and Healey is “fresh to the chancellorship, succeeding Rachel Reeves”. The Budget will be delivered to Parliament on 28 October.
It will come at a time when public finances are “expected to be gloomier than forecast at Rachel Reeves’ spring statement”, said The Guardian, when the Iran war had only just started.
Burnham has already announced a “handful of cost of living measures”, said Which?, which include a £2 cap on bus fares, the removal of VAT from electricity bills and a business rates tax cut for pubs and clubs.
There are plenty of clues on further cost of living support but no certainty yet on what will be announced. Healey has said, however, he wants to move “power and money out of Westminster, and into every postcode around Britain”.
Here is how the Autumn Budget could impact your finances.
Tax threshold tinkering
Burnham has committed to keep Labour’s manifesto pledge not to raise income tax rates. But during the Makerfield by-election campaign he did hint at “revising the personal tax allowance”, said Which?, to amend when people’s earnings move into different tax bands.
Wealth taxes
Former chancellor Reeves unveiled a mansion tax in her final budget, which Healey is expected to “push ahead with”, said The Sun.
Other wealth taxes are still “much discussed”, said BDO, but there are fears that a straightforward wealth tax would lead to the wealthy leaving the UK. Other taxes on wealth, such as raising the capital gains tax rate, “might prove better at raising revenue”.
Property tax changes
Burnham has previously described the UK’s property tax system as “outdated”, said Fidelity, and has “expressed support” for a land value tax to replace stamp duty and council tax. However, he did say during the summer that there were “no immediate plans” to abolish either one.
Social care strategy
One “bold idea”, said The Independent, is to scrap inheritance tax and replace it with a social care levy. But tax moves to fund a social care overhaul “may simply be delayed until a future budget”, added BDO, as Baroness Casey’s independent commission on adult social care is not due to report until summer 2027.
Pensions
Get set for “another period of speculation on pensions”, said Saxo.
The previous two Labour budgets had all kinds of speculation about limits being cut, such as pension tax relief, “leading to withdrawals and investors pulling money out of portfolios”.
Healey is “broadly expected”, said The Sun, to continue with plans to add pensions to estates for inheritance tax from April 2027.
Burnham has already committed to keeping the state pension triple lock but there is “persistent speculation about cutting the tax-free pension lump sum”, said WealthR. Trimming pension tax relief “could also be on the radar”.
John Healey will deliver his first budget as chancellor in October. Here is what might be coming
