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Newsletter issue – September 2026
The new Chancellor of The Exchequer, John Healey, has announced that he will deliver his first Budget on 28 October. There's also a new Prime Minister in Andy Burnham, so speculation is rife as to what tax rises may be announced. Both have stated that they will remain true to the set of fiscal rules set out by Mr Healey's predecessor, Rachel Reeves.
The Prime Minister has hinted he may "ask for a bit more in tax" to fund policy plans and as the fiscal rules and reduced headroom mean limited scope for borrowing, this does push the Chancellor toward tax rises. Economists expect increases similar to the £26bn rise in November 2025, or even £42bn if spending plans are very high.
Labour has committed not to raise income tax, VAT, employee NI, or onshore corporation tax - together 54% of the tax base. Stamp duty and council tax reform are also ruled out, and experts say large structural reforms are unrealistic before October. Economists predict a "dog's breakfast" of smaller measures rather than big reforms. Key candidates include capital gains tax, pension taxation, "sin taxes" and wealth taxes.
Experts strongly advise not making major financial decisions based on speculation. Instead, focus on actions based on current rules. Use your full £20k ISA allowance and maximise pension tax relief while it exists in its current form. Prepare for known upcoming changes such as the cash ISA allowance dropping to £12k for under 65s next year and pensions being included in estates for inheritance tax calculations.
