On Wednesday 28 October 2026, Chancellor John Healey will deliver the first Budget of Prime Minister Andy Burnham's government. With the public finances under pressure and the main revenue raising taxes ruled out, most commentators expect some form of tax increase, but there has been unusually little leaking about what that might look like. This article separates what we actually know from what is speculation, so you can plan sensibly rather than react to headlines.
Disclaimer: This article is for general information only and reflects government statements, legislation already enacted and public commentary available in early October 2026. Nothing discussed as a possibility in this article has been confirmed, and the actual Budget may differ significantly. Do not make significant financial decisions based on Budget speculation without taking specific advice.
The Backdrop: Why Tax Rises Are Widely Expected
At the November 2025 Budget, the previous Chancellor built up fiscal headroom of around £22 billion against the government's fiscal rules. Since then, rising government borrowing costs, the conflict in the Middle East, higher defence commitments and new cost of living measures have all eaten into that buffer. Estimates of what remains vary widely, with some economists putting it as low as £5 billion and others around £10 billion.
In his speech to the Labour Party conference in Liverpool on 28 September, the Chancellor deliberately avoided giving any signals about specific measures, but he was clear that meeting the fiscal rules comes first and that he wants a buffer against future uncertainty. He also noted that the money available to previous Labour governments is not there now, which most observers have read as preparing the ground for difficult decisions. The Office for Budget Responsibility will publish its updated economic and fiscal forecast on the same day as the Budget, and that forecast will largely determine how much room the Chancellor has to work with.
What Has Been Ruled Out
The government has confirmed it will keep Labour's 2024 manifesto commitment not to increase the rates of income tax, employee National Insurance or VAT. These three taxes together raise almost 60% of all tax receipts, which is why the speculation has turned so firmly to other areas.
The Chancellor has also reportedly confirmed he will stick to the manifesto pledges on business taxation, which means the headline Corporation Tax rate is expected to stay capped at 25% for this Parliament, with full expensing and the Annual Investment Allowance retained.
On property, the Prime Minister has indicated that this Budget will not abolish stamp duty or council tax, which effectively rules out a wholesale replacement of the property tax system, including a full Land Value Tax, at least for now.
It is worth being precise about what the manifesto pledge covers. It protects the rates of income tax, not the thresholds. Thresholds are already frozen until April 2031, and continuing that freeze, or extending it further, remains an option that would not technically break any promise.
Worked Example 1: How a Threshold Freeze Raises Tax Without Changing Rates
Sophie earns £50,000 a year as an employee in 2026/27, just below the £50,270 point where higher rate tax begins. She receives a 4% pay rise, taking her salary to £52,000. Because the higher rate threshold remains frozen rather than rising with inflation, £1,730 of her new salary is now taxed at 40% instead of 20%, costing her an extra £346 in Income Tax compared with what she would pay if the threshold had risen in line with her pay. Multiplied across millions of taxpayers, this effect, often called fiscal drag, raises billions of pounds each year without any headline rate ever changing. The Institute for Fiscal Studies has estimated that restoring inflation linked increases to thresholds from April 2027 would cost around £8.4 billion a year, which is why a quick end to the freeze looks unlikely despite growing political pressure.
What Is Already Law and Coming Regardless
Before looking at speculation, it is important to remember that several significant changes announced at earlier Budgets are already scheduled and will happen regardless of what is announced on 28 October.
From April 2027, the Income Tax rates on property income rise by two percentage points, to 22% at the basic rate, 42% at the higher rate and 47% at the additional rate. This affects landlords holding property personally rather than through a company.
From April 2027, the Cash ISA allowance for savers under 65 falls to £12,000 a year, although the overall ISA allowance remains £20,000 and the balance can still be invested in a Stocks and Shares ISA.
From April 2027, most unused pension funds and pension death benefits will fall within a person's estate for inheritance tax purposes, a major change for estate planning.
From April 2028, the High Value Council Tax Surcharge, widely called the mansion tax, will apply to residential properties in England valued at £2 million or more, with annual charges ranging from £2,500 to £7,500.
From April 2029, National Insurance relief on pension contributions made through salary sacrifice will be limited to the first £2,000 a year, with both employer and employee paying National Insurance on amounts above that.
Worked Example 2: The Property Income Rate Rise Already Coming
Marcus is a higher rate taxpayer who owns two buy to let flats personally, producing rental profit of £24,000 a year, all of which falls within his higher rate band. In 2026/27, he pays Income Tax at 40% on this profit, coming to £9,600. From April 2027, the higher rate on property income rises to 42%, increasing his tax on the same profit to £10,080, an extra £480 a year. Nothing in the Budget on 28 October needs to happen for Marcus to face this increase, because it is already legislated. Any further property related measures announced in the Budget would come on top.
What Is Genuinely on the Table
With the biggest taxes ruled out, attention has focused on capital, property and specific sectors. None of the following has been confirmed, but each has been widely discussed by commentators, think tanks or politicians.
Capital Gains Tax
The Prime Minister has long argued that the UK taxes work more heavily than wealth, and some within the Labour party have called for Capital Gains Tax rates to be aligned more closely with Income Tax rates. The main rates are currently 18% and 24%, having last risen in October 2024. No specific proposal has been announced, and some modelling, including HMRC's own, suggests that a straightforward rate increase could reduce revenue if people simply delay selling assets. Changes to reliefs or the annual exempt amount, currently £3,000, are also possible alternatives to a rate rise.
Worked Example 3: What a Capital Gains Tax Change Could Mean
Priya, a higher rate taxpayer, is considering selling a share portfolio that would produce a gain of £100,000. Under the current rules, after deducting the £3,000 annual exempt amount, she would pay Capital Gains Tax at 24% on £97,000, coming to £23,280. Purely as an illustration, if the rate were aligned with the 40% higher rate of Income Tax, the same gain would cost her £38,800, an increase of £15,520. This illustrates why Capital Gains Tax speculation attracts so much attention, but it is important to stress that no such change has been announced, and any change might take effect from a future date, include transitional rules, or not happen at all. Bringing forward a sale purely because of a rumour can backfire if the rumour proves wrong, a point we cover in more detail in our companion article on acting before the Budget.
Inheritance Tax and Business and Agricultural Reliefs
The changes to Agricultural Property Relief and Business Property Relief announced in 2024 remain politically contentious, and the Prime Minister has reportedly said he is willing to look again at the agricultural relief changes. Whether this leads to a softening, or extends to Business Property Relief, is unclear. A separate rumour of a 10% levy on estates to fund social care has circulated, but the government has said it has no plans to introduce one.
Property and Land
While a full Land Value Tax looks unlikely this time, the Prime Minister has not ruled out more incremental reform of property taxation. There has been speculation that the mansion tax threshold could be lowered or the charges increased before it takes effect in 2028, though nothing has been confirmed. We cover this in detail in our separate article on what property tax changes could mean for landlords and second home owners.
Business Rates
Business rates reform is one area where change is expected rather than merely speculated. The government confirmed in July 2026 a 20% business rates cut for pubs, social clubs and live music venues in England from April 2027, describing it as a down payment, and has promised wider reform at the Budget, including changes to Small Business Rates Relief. Hotels, restaurants, cafes and cinemas are not currently included in the pub relief, so hospitality businesses outside those categories should watch the detail closely.
Sector Levies and the Tax Gap
Calls for higher taxation of banks and the oil and gas sector have been renewed, and sector specific levies remain a possibility given the Corporation Tax rate pledge. Separately, the government is continuing its push to raise an additional £10 billion a year by 2029/30 through closing the tax gap, which means continued investment in HMRC's compliance work and more use of real time data. For businesses, this makes accurate, well documented tax compliance more important than ever, regardless of what the Budget itself contains.
What You Should Do Before 28 October
The single most important piece of advice is not to make irreversible decisions based on rumours. In the run up to the 2024 and 2025 Budgets, speculation about pension tax free cash led some people to withdraw lump sums early, only for the rumoured change not to happen.
That said, it is sensible to use the next few weeks to understand your exposure. If you are planning to sell a business, a property or a significant investment in the near future, it is worth modelling the outcome under current rules and under plausible alternatives, so you can act quickly once the detail is known. If you were already planning to use allowances such as your ISA or pension allowance this tax year, there is no harm in doing so now. And if you own property personally, it is a good time to review how the changes already legislated for 2027 and 2028 will affect your returns.
Frequently Asked Questions
When is the Autumn Budget 2026?
The Budget will be delivered on Wednesday 28 October 2026, at around 12:30pm, shortly after Prime Minister's Questions. The Office for Budget Responsibility will publish its forecast on the same day.
Will income tax go up in the Autumn Budget 2026?
The government has confirmed it will not increase the rates of income tax, employee National Insurance or VAT. However, this commitment covers rates rather than thresholds, and thresholds are already frozen until April 2031, which increases the amount of tax many people pay as their income rises.
Will Capital Gains Tax rise in the Budget?
Nobody knows. There has been speculation that rates could move closer to Income Tax rates, but no proposal has been announced, and HMRC's own modelling suggests a large rate increase could reduce revenue. Changes to reliefs or allowances are also possible.
Is a wealth tax being introduced?
The Prime Minister has not proposed a general wealth tax and has said he does not intend to tax wealthy people out of the UK. However, his long standing view that wealth is undertaxed relative to work means capital, property and land based taxes are seen as more likely areas for change than earnings.
Will Corporation Tax change?
The headline rate is expected to remain capped at 25%, in line with the manifesto, and the Chancellor has reportedly said he will keep to the manifesto pledges on tax. Sector specific levies, such as on banks or energy companies, remain possible.
Should I sell assets before the Budget to avoid a possible tax rise?
Not purely on the basis of speculation. Bringing forward a sale can mean paying tax sooner, losing future growth, or acting on a change that never happens. If a sale was already planned, it is worth modelling the timing with your accountant so you can make an informed decision once the Budget detail is published.
When will we know what the Budget means for me?
The main announcements will be made on 28 October, but the full detail, including draft legislation and technical notes, is often published on the same day or shortly afterwards. CoreAcc Accountants will publish a full analysis once the Budget has been delivered.
What CoreAcc Accountants Can Help You With
CoreAcc Accountants helps clients across Hertfordshire and North London separate genuine planning points from Budget noise. We can model the effect of the changes already legislated for 2027 and 2028 on your business, property income or estate, review any planned disposals under current rules and plausible alternatives, and make sure you are ready to act quickly once the Budget detail is known.
Get in Touch
If you are planning a sale, a property purchase, a business restructure or a significant pension contribution in the coming months, speak to CoreAcc Accountants before 28 October. We will help you understand where you stand under today's rules, so that whatever the Chancellor announces, you can respond with a clear plan rather than a rushed decision.
CoreAcc Accountants is an ACCA accredited firm of Chartered Certified Accountants based in Borehamwood, Hertfordshire. This article was published on 5 October 2026 and reflects legislation, government statements and public commentary available at the time of writing. Matters described as possibilities have not been confirmed. It does not constitute professional or legal advice. Always seek specific advice tailored to your individual circumstances.
