Chancellor John Healey will set out tax and spending plans in the Budget on October 28 (Image: Getty)
Chancellor John Healey will deliver his first Budget on Wednesday, October 28, which will set out how the government plans to raise or lower taxes.
The Budget announcement sets out tax, spending and borrowing plans for the year ahead and is delivered in a speech to MPs in the House of Commons. The government will then later introduce a Finance Bill to implement the tax measures announced in the speech. Mr Healey has so far refused to rule out tax increases after acknowledging that government borrowing costs are at “historic highs” and he is under pressure to increase defence spending, but he promised “fiscal discipline” earlier this year at Labour’s conference.
While little has been confirmed about what exactly the Budget will contain, there has been speculation about a delay or freeze to fuel duty, energy bill help and a new personal allowance for low-income pensioners.
There are also several policies that we know already, including changes to the State Pension triple lock, reforms to Cash ISA allowances and inheritance tax changes.
After the Budget announcement, some changes to existing taxes may be introduced immediately on the same day, which MPs will be asked to approve, while other changes may not be implemented until late.
What time is the Budget announcement?
Mr Healey will deliver the autumn Budget announcement to MPs in the House of Commons on Wednesday, October 28, at approximately 12.30pm. The speech will immediately follow Prime Minister’s Questions.
The first part of the announcement typically begins with a review of the nation’s finances and the economic situation, before moving on to any proposals for new taxation, continuing or abolishing existing taxes, as well as other measures not related to taxation.
Where can I watch the Budget announcement?
The Budget announcement will be broadcast live on ParliamentLive.tv, while other major UK broadcasters, including BBC News, Sky News and ITV News, also provide live TV coverage.
What policies could be in the Budget?
While some tax changes have already been confirmed, the government hasn’t published its Budget plans, but the following areas have all featured in speeches and wider policy discussions:
State pension and triple lock
State pensions will be increased again by 3.9% in the next triple lock. The figures are already confirmed but the Chancellor will set in stone that the rise is happening from next April, with final official figures set to take a full new state pension to £13,036.
A tax exemption will also allow state pensioners with ‘no other income’ to keep all of their pension, even if it exceeds the £12,570 threshold.
Fuel Duty
The Chancellor is under pressure to scrap January’s planned increase in fuel duty in light of soaring petrol and diesel prices.
Fuel Duty was frozen under the Conservatives in March 2022 and the freeze continued under Sir Keir Starmer’s government following a decision in May to push back a planned 3p increase in September until the end of 2026.
Energy Bills
Speculation is rife that Mr Healey is planning energy bill support for households on certain benefits. The help could provide a welcome reprieve as energy prices are expected to soar in January, with a typical annual bill forecast to jump by £276.
Personal Allowance
Pensioners on a low income are to be shielded from income tax under plans for a new personal tax allowance.
The full new State Pension is expected to rise by 3.9% to £13,036.40 per year from April 2027, which would take the payment above the £12,750 personal allowance, meaning pensioners would be liable to pay income tax if no changes are made.
The government has already committed to not tax those who only get an income solely from the State Pension, but this pledge is set to be met by plans for a new tax allowance that will protect pensioners on a low income.
For everyone else, the Personal Allowance is very likely to remain at £12,570 until 2031, when ex Chancellor Rachel Reeves announced the policy would be frozen until.
Everything else
Other key areas likely to be mentioned include Savings Tax, cigarette and alcohol duty, VAT on gas and electricity, National Insurance, a tax on banks, changes to land and property taxes and inheritance tax.
