The Chancellor, John Healey, delivers his first Budget on Wednesday 28 October. It is also the first Budget of Andy Burnham's government, a little over three months after it took office. Very little has leaked, so this one is harder to call than most.
Here is what we know, what we do not, and what is worth doing before the speech. We will update this article once the detail is published.
What has been ruled out
The government has said it will keep the 2024 manifesto promise not to raise the rates of income tax, employee National Insurance or VAT. Between them those three bring in close to 60 percent of all tax receipts, so the biggest levers are not available.
The promise covers rates, not thresholds. The personal allowance and the higher rate threshold are already frozen until April 2031, so more of your income drifts into higher bands each year as pay rises. Unfreezing them would cost billions, so do not plan on it.
What is already settled
A lot of what affects owner-managed businesses over the next few years was decided before this Budget. None of it depends on what is said on Wednesday.
- Making Tax Digital for Income Tax reaches sole traders and landlords with more than £30,000 of qualifying income from 6 April 2027, and £20,000 from April 2028.
- The higher rates on dividend, savings and property income introduced under the previous Chancellor stay in place.
- The government has committed to capping corporation tax at 25 percent for this Parliament, and to keeping full expensing and the annual investment allowance.
- Pubs, social clubs and live music venues in England get a 20 percent cut in business rates from April 2027.
- The High Value Council Tax Surcharge on homes worth over £2 million is due from April 2028.
Where change is most likely
Capital gains tax. The main rate has been 24 percent since October 2024. Newspapers have reported that the Chancellor has ruled out an increase, but there has been no official statement. Even if the rates are left alone, the reliefs and the rules around them could still change.
Business rates. Wider reform has been promised, including changes to Small Business Rates Relief. If you rely on that relief, this is the announcement to read closely.
Inheritance tax reliefs. The Prime Minister has said he is willing to look again at the 2024 restriction on agricultural property relief. Whether that extends to business property relief is not clear.
Property and land. The Prime Minister has long supported a land value tax. It is unlikely to arrive on Wednesday, but smaller changes to property tax are possible.
The tax gap. HMRC has had significant investment to collect more of the tax already owed. Expect more data matching, more nudge letters and more enquiries. Records that are current and complete are the cheapest protection there is.
What to do before Wednesday
Most Budget measures take effect from 6 April or later, so there is rarely a need to rush. The exception is anything that can change on the day itself, which in the past has included capital gains tax.
- If you are partway through selling a business, shares or a property, talk to us before Wednesday. Exchange and completion dates can matter.
- Do not make a large decision on a rumour. Several of the stories in the last fortnight have been denied, and the ones that turn out true often come with transitional rules.
- Check where you stand against the thresholds that are already set, such as the £30,000 MTD test and the £100,000 point where the personal allowance starts to taper. Those are certain, which is more than can be said for anything else this week.
After the Budget
The speech gives the headlines. The detail sits in the documents published alongside it, and that is usually where the real changes are. We will go through them and update this article with what has changed for owner-managed businesses, landlords and directors.
If something announced on Wednesday affects a decision you are about to make, get in touch and we will tell you what it means for you.
