John Healey and Andy Burnham are tipped to announce three tax changes in the Budget (Image: Getty)
Andy Burnham and John Healey have been tipped to make three tax changes in this year’s Autumn Budget. The Chancellor will outline the Government’s financial plans on Wednesday, October 28. Not a lot has been trailed to date, although experts have suggested certain taxes may be in Mr Healey’s sights, including Britain’s outdated property tax system and Capital Gains Tax. Emma Rawson, director of public policy at the Association of Taxation Technicians (ATT), told the Daily Express that Mr Healey may have to make many smaller adjustments in the Budget.
She said: “With changes to the ‘Big Three’ taxes – Income Tax, National Insurance and VAT – all but ruled out, the Chancellor may have to resort to a wider range of smaller tweaks in the hope they add up to larger receipts.”
Labour promised not to raise Income Tax, National Insurance and VAT in its 2024 General Election manifesto. It leaves Mr Healey facing the same dilemma as his predecessor, Rachel Reeves, who was under enormous pressure to raise more revenue to fund public services without hampering Britain’s economic growth.
The current incumbent at No.11 must find the money to meet a pledge to raise defence spending to 3% of GDP as well as fulfil Prime Minister Andy Burnham’s promises to build more council houses and fund a new national care service.
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Ms Rawson said Budget tweaks could include an additional tax on bank profits, changes to motoring taxes ahead of the expiry of the extended fuel duty freeze and a drive towards more timely payment of tax debts. She added: “One area in which we are expecting to see further announcements is small company taxation, in particular close companies.”
In general, a close company is one that is controlled by five or fewer people, who may include directors, shareholders, or others.
Emma Rawson says the Chancellor may have to resort to a wider range of smaller tweaks (Image: Association of Taxation Technicians)
According to the ATT, the small company Corporation Tax gap currently stands at 44.6% of the theoretical Corporation Tax payable by small companies, and is an area of concern for both the Treasury and HM Revenue & Customs (HMRC).
Ms Rawson said changes which are less likely in the Budget apply to Capital Gains Tax and Inheritance Tax, the latter of which, she said, has already seen recent reforms and raises a comparatively modest amount for the public purse.
ATT’s public policy chief added: “We would urge that, rather than piecemeal changes to different taxes, more radical reform of the tax system is needed to tackle complexity. Unfortunately, however, such reforms require time and political will, unlikely when successive chancellors feel under pressure to increase tax revenues.”
Mr Healey has already said fiscal discipline comes first and has committed to a “buffer against uncertainty”.
Ms Reeves’s last Budget left about £22billion of fiscal headroom, but it is not clear how much wriggle room the current Chancellor has left after recent rises in the cost of Government borrowing amid tensions in the Middle East.
Grant Thornton’s head of tax policy, Abigail Agopian, writing in September, said this year’s Budget is harder to predict, with little leaking of potential tax policy measures. She suggested that if this discipline holds, then the Budget may become one of the least predictable fiscal events in years.
Ms Agopian said areas to watch include sector-specific levies on bank profits and on the oil and gas sector.
She said property taxes also remain “an area to watch” at this Budget and beyond. Mr Burnham has long shown support for an annual tax on land values, but he has ruled out making major changes in the next Budget.
In its pre-Budget analysis, the Institute for Fiscal Studies thinktank said the most pressing problem for the Chancellor is that inflation will erode the budgets of Government departments.
This will create a need for either large cuts to some public services or potential top-ups to spending plans, costing tens of billions of pounds.
Analysis by the IFS found that while the war in the Middle East will mean inflation is higher than expected in the coming years, rising prices will also boost tax revenues. This means the fall in the financial buffer available to the Chancellor will be smaller than widely anticipated.
‘I’m a Finance Expert – Three Tax Changes Burnham and Healey Could Make in Autumn Budget’
Andy Burnham and Chancellor John Healey are facing a difficult financial balancing act as the government prepares for its Autumn Budget on October 28, 2026. With pressure mounting to fund public services, support economic growth and maintain control of government borrowing, attention is turning to the tax changes that could shape the country’s financial future.
A finance expert has warned that the government may need to consider several smaller tax adjustments rather than rely on major increases to the UK’s largest taxes. The challenge is to raise sufficient revenue without undermining businesses, discouraging investment or adding further pressure to households already concerned about living costs.
The government has committed to protecting the main rates of income tax, employee National Insurance and VAT under Labour’s 2024 election manifesto. That commitment narrows the options available to the Treasury, leaving ministers to consider changes elsewhere in the tax system. Emma Rawson, director of public policy at the Association of Taxation Technicians, has highlighted several areas where adjustments could be considered. <Cite refs={[“turn678870view0″,”turn724055search1”]}/>
Three potential areas stand out: taxation of bank profits, motoring taxes and efforts to collect unpaid tax more effectively. None should be treated as a confirmed Budget measure, but each illustrates the difficult choices facing Burnham and Healey.
1. A Possible Tax Increase on Bank Profits
One option attracting attention is a higher tax burden on banks.
Banks occupy an important position in the British economy. They provide loans to businesses, mortgages to households and financial services to millions of customers. Their profits can be substantial, and the sector already pays corporation tax alongside additional banking-related charges.
Supporters of a higher levy argue that large financial institutions could contribute more towards public spending at a time when the government needs additional revenue. They may also argue that the financial sector benefits from operating within a stable regulatory system supported by public institutions.
For Burnham, the political attraction is clear. A measure directed at a specific industry could generate revenue without increasing the headline rate of income tax paid by workers. The money could help support public services or contribute towards the government’s wider spending commitments.
However, raising taxes on banks is not without risks.
Financial institutions operate in an international market and can make decisions about where to locate particular activities, allocate investment and expand their operations. Industry representatives argue that additional taxes could weaken Britain’s competitiveness, discourage investment and potentially affect employment.
There is also the question of whether some of the cost could eventually be passed on to customers through higher fees, less generous savings rates or more expensive borrowing. The extent of any effect would depend on the precise design of the measure and how banks responded.
The government would therefore need to consider the potential revenue alongside the wider economic consequences.
Healey must also decide whether a temporary levy or a permanent change would be more appropriate. A temporary measure could provide revenue for a limited period, but it might offer less certainty for businesses planning long-term investment. A permanent tax change could produce a more predictable stream of revenue, while creating a lasting change in the incentives facing the sector.
The decision is not simply about whether banks should pay more. It is about how to raise money without damaging the financial services industry that supports a significant part of the UK economy.
2. Motoring Taxes Could Come Under Renewed Scrutiny
The second area concerns motoring taxes, particularly fuel duty.
Fuel duty is an important source of government revenue, but it is also politically sensitive because changes can affect motorists, businesses and the cost of transporting goods. Any increase can attract opposition from drivers who already face high costs for fuel, insurance, maintenance and vehicle ownership.
The government’s extended fuel duty freeze has helped limit the tax element of petrol and diesel prices. However, the future of that arrangement is an important Budget question, particularly as ministers seek to balance revenue requirements against pressure on household finances.
If the government allows fuel duty to rise, it could collect additional revenue from motorists. But the consequences would not be limited to people who drive for leisure. Workers who depend on cars to reach their jobs, tradespeople travelling between customers and businesses transporting goods could all be affected.
There may also be indirect effects. If transport businesses face higher costs, some could attempt to pass those costs on through higher prices. The final impact would depend on market conditions, competition and the ability of firms to absorb additional expenses.
On the other hand, maintaining a freeze indefinitely would limit the government’s ability to raise revenue from the tax. It could also create a growing gap between the amount collected and what the Treasury might otherwise expect if duty rates changed in line with inflation.
Ministers therefore face competing pressures. Raising fuel duty could strengthen public finances but create immediate frustration among motorists. Extending the freeze could provide short-term relief while leaving the Treasury needing to find revenue elsewhere.
A further complication is the transition towards electric vehicles. As more motorists move away from petrol and diesel, the government will eventually need to consider how transport-related revenue should be collected in the longer term.
Any future road-use or vehicle-tax system would need to consider fairness between drivers, the practicalities of enforcement and the costs of implementation.
For now, the central question is whether Healey will change fuel duty arrangements in the Budget or maintain existing support while pursuing other revenue measures. No final decision should be assumed before the official announcement.
3. A Crackdown on Unpaid Tax
The third potential change is less visible to the public but could be significant for the Treasury: improving the collection of tax that is already legally due.
Governments do not raise revenue solely by increasing tax rates. They can also improve compliance, reduce errors, address avoidance and make it easier for taxpayers to meet their obligations.
The Association of Taxation Technicians has highlighted concerns about the corporation tax gap among small companies. Its analysis puts the gap at 44.6% of the theoretical corporation tax payable by small companies, making it an area of concern for HM Revenue and Customs and the Treasury. <Cite refs={[“turn678870view0″,”turn724055search0”]}/>
The tax gap is an estimate of the difference between the tax that should theoretically be paid and the amount actually collected. It can include unpaid tax resulting from deliberate evasion, mistakes, failure to take reasonable care and other forms of non-compliance.
It is important to understand that the entire tax gap does not represent deliberate fraud. Some cases arise because taxpayers misunderstand complicated rules or make errors when completing returns. Others involve businesses that fail to declare the correct amount of taxable income.
Improving compliance could help the government collect more of the revenue already expected under existing law, without increasing the headline tax rate.
Potential measures could include better use of data, clearer reporting requirements, more effective enforcement against deliberate evasion and improved processes for collecting outstanding tax debts. The government could also examine whether certain rules make compliance unnecessarily complicated for small businesses.
However, a successful approach would need to distinguish between deliberate non-payment and genuine mistakes. Small companies may lack the specialist tax teams available to larger organisations, and additional reporting obligations can create administrative costs.
If compliance rules become more complex without improving collection, businesses could face extra paperwork without producing a corresponding benefit for the public finances.
Healey would therefore need to demonstrate that any enforcement changes are proportionate, targeted and likely to deliver measurable results.
The advantage of this approach is that it seeks to ensure the tax system works as intended. The challenge is that collecting unpaid tax may not produce enough revenue on its own to meet all the government’s spending commitments.
Why the Government Needs More Revenue
The three possible changes reflect the financial pressures facing Burnham’s administration.
The government wants to fund public services, support economic growth and deliver commitments involving housing, social care and defence. At the same time, borrowing costs and uncertainty about the economic outlook have limited the room available for new spending.
A Budget is therefore not simply a list of tax increases. It is a statement of priorities that must reconcile political promises with the resources available.
If ministers want to spend more on one area, they must decide whether to raise additional revenue, reduce spending elsewhere or borrow more. Each option carries consequences.
Higher taxes can raise money, but they can also change behaviour and affect investment. Spending reductions can protect the public finances, but they may require difficult choices about services. Borrowing can help meet immediate needs, but it creates obligations for future taxpayers and may become more expensive when interest rates or market confidence move against the government.
The Treasury must also account for the effects of inflation. Rising prices can increase tax receipts in some areas while simultaneously increasing the cost of delivering public services. This means that higher revenue does not automatically translate into greater financial freedom.
The government has to assess the full picture rather than focus on one tax in isolation.
The Property Tax Question Remains
Although the three areas above are among the possibilities highlighted by tax experts, property taxation remains another important subject in the Budget debate.
Britain’s property tax system includes council tax and stamp duty, both of which have attracted criticism over their structure and effects. Some reform advocates argue that the current system does not adequately reflect changes in property values and can create obstacles for people who want to move home.
Burnham has previously expressed support for reforming property taxation, including the idea of a land value tax. However, reports ahead of the Budget indicate that major changes to the system are not expected to be introduced immediately.
A substantial reform would require careful planning because property taxes affect homeowners, tenants, landlords, businesses and local authorities in different ways. Any transition would need to consider existing liabilities, regional differences and the consequences for household finances.
For that reason, property taxation may remain a longer-term policy question rather than one of the immediate changes announced in the Budget. <Cite refs={[“turn678870view0″,”turn724055search3”]}/>
Could Capital Gains Tax Change?
Capital Gains Tax has also attracted attention because it applies to profits made when certain assets are sold, including shares and investment property.
Some reform advocates argue that the difference between capital gains tax rates and income tax rates creates an imbalance between income earned through work and returns generated from assets. They have called for changes to the system, including closer alignment between the two sets of rates.
However, higher capital gains tax rates can affect when investors sell assets and where they choose to invest. If a tax increase encourages people to delay transactions, the additional revenue may be smaller than expected.
As of October 20, 2026, reports indicated that Healey had ruled out increasing capital gains tax rates in the forthcoming Budget. That makes a major rate increase less likely, although it does not rule out every possible adjustment to the wider tax system. <Cite refs={[“turn724055news13″,”turn724055search2”]}/>
This illustrates why Budget speculation must be treated cautiously. A measure may be discussed by experts or political figures without becoming government policy.
The Challenge Facing Burnham and Healey
Ultimately, the Autumn Budget will test whether the government can deliver its spending priorities while maintaining confidence in the public finances.
Bank taxation could provide additional revenue but raise concerns about competitiveness. Motoring taxes could generate money but increase costs for drivers and businesses. Better tax compliance could improve collection without changing headline rates, but its effectiveness would depend on the quality of enforcement and the scale of unpaid liabilities.
There is no cost-free solution.
The government will need to explain not only which measures it adopts but also why those measures are preferable to the alternatives. It must provide clear information about who will pay, how much revenue is expected and what protections will be available for people and businesses facing additional costs.
For households, the key concern is whether the Budget will make everyday life more affordable or add further pressure to already stretched finances. For businesses, the priority is a predictable tax environment that allows them to invest and recruit. For the Treasury, the task is to fund public commitments without creating new economic problems.
The three potential tax changes highlighted by finance experts show the narrow path ahead. Burnham and Healey must find revenue while honouring political commitments and maintaining public confidence.
The final decisions will not be known until the Budget is delivered on October 28. Until then, these proposals remain possibilities rather than confirmed policy. The important question is whether the government can produce a package that raises sufficient revenue, supports economic activity and explains its choices honestly to the public.