From capital gains tax to fuel duty: What to expect from the Budget

John Healey is weeks away from delivering his first Budget as chancellor as Andy Burnham seeks to set out his government’s fiscal priorities.

Former defence secretary Mr Healey is under pressure to find billions of savings to help ramp up Britain’s military spending, whilst also ensuring the string of pledges set out by the prime minister during his first weeks in office are fully funded.

As with any Budget, there has been speculation about what could be included in the statement – though there have been far fewer leaks in the lead up compared to last year.

All eyes will be on the chancellor to see if he lays out plans on key issues, such as welfare reform defence, as well as any key tax policies.

Here is a round up of what we could see come out of the Budget on 28 October:

One major element of the Budget is expected to focus on greater help for UK households struggling with the rising cost of energy.

Mr Burnham has already cut VAT on electricity bills, but there has been an acceptance in government that more has to be done, especially considering the looming rise of the energy price cap in January.

Mr Healey hinted at further help with energy bills on Thursday, telling ITV News: “Energy costs are punishing at the moment.

“We will do what we can in the Budget, both for business and for households, to give people a bit of breathing space.”

It has also been reported that he is looking to spend over £1bn to see greater discounts applied to households less able to afford rising costs.

This will likely come in the form of an expansion of the existing Warm Home Discount, which grants a yearly £150 rebate to energy bills for households receiving a qualifying means-tested benefits. This could be boosted by another £100, The Guardian reports.

Ministers are reportedly preparing to announce a tax crackdown on online retailers as part of the chancellor’s plan to deliver a budget for the "white van man” and the “high street beautician”.

Mr Healey is reportedly looking at ensuring that multibillion-pound online marketplaces such as Amazon, eBay and Temu will be made responsible for collecting tax owed by retailers selling on their platforms.

The policy, reported by The Times, will crack down primarily on foreign sellers who abuse the rules to avoid paying VAT. It is expected to raise as much as £1bn, money which will be used to cut business rates for high street shops.

Mr Burnham announced last month that first-time buyers struggling to get onto the property ladder will be supported by a new help-to-buy scheme.

Further details of the scheme and it’s financial impact will likely be laid out in Mr Healey’s statement.

The new ‘Your First Home’ scheme will give savers access to a mortgage with just a 2.5 per cent deposit. A loan with 20 per cent of the property’s value will also be available to help pay for the purchase as part of the scheme.

There was lots of speculation about changes to Capital Gains Tax (CGT) when Mr Burnham first became prime minister over the summer.

Before being appointed as first secretary of state, Louise Haigh called for an increase in CGT, arguing it “should be brought closer to income tax rates”.

The proposal would mean the levy, currently applied to the profit made from the sale of an asset that has increased in value, could be taxed at a 45 per cent rate, rather than the 18 to 24 per cent rate currently in place.

But experts have warned against the hike, saying any attempt to increase the tax will end in failure because business owners would defer selling their companies or move their money abroad to avoid it.

Last year, former chancellor Rachel Reeves announced that a high-value council tax surcharge – or “mansion tax” – will see owners of properties valued at over £2m start paying a regular annual charge worth up to £7,500 from April 2028.

But there has been speculation that the prime minister is considering an expansion to the plans, lowering the threshold to include properties worth at least £1.5m.

Tax analysts say this could double the yearly receipts from the levy to £800m, and nearly double the number of affected properties from 123,000 to around 245,000.

When Mr Burnham entered No 10, there was speculation he could reform stamp duty, an extra cost for homebuyers, which economists have long criticised for discouraging people from moving home.

Speculation has grown that it could be replaced by some form of annual property tax or, as Mr Burnham has spoken about before, a Land Value Tax (LVT) – an annual payment based on how much the land is worth.

Mr Burnham previously described LVT as a “very productive form of taxation because you make sure land is used for good, productive purposes, and if people are sitting on it and hoarding it, they get taxed and that money can come back and be redistributed”.

Fuel duty was initially frozen under the Conservative Party in 2022, and continued under Sir Keir Starmer’s government.

It is now due to rise on January 1, from almost 53p per litre to almost 56p in a blow to motorists.

But Mr Burnham has left the door open to halting the planned rise, saying last month that “every possible measure” is being considered to ease the cost of driving.

Asked whether he would halt the change, the prime minister told BBC Breakfast: “I’m considering everything that might help people in very difficult times and I will be honest and say every possible measure is being looked at.

“The question I’ve got is: ‘How many can I afford?’ What can we do given the state of the public finances?’”

There has been speculation that the chancellor could choose to raise bank taxes in his Budget.

The TUC union has called on the prime minister to introduce a windfall tax on banks as a result of the “huge” profits and bonus payments they make, and use the money to cut energy bills with a social tariff for two in three households.

But bosses of the UK’s biggest City groups have intensified calls not to hike taxes.

The chief executives of UK Finance and the CBI (Confederation of British Industry) wrote a letter to Mr Healey arguing that the UK’s financial services industry “already faces a higher tax burden than our key international competitors”.

It added: “This includes sector-specific taxes over and above those applying to businesses generally – for example, banks are subject to both the bank corporate tax surcharge and the bank levy.”

The corporate tax surcharge is an extra tax on the profits that banks make, at a rate of 3 per cent. The levy is a charge on certain equities and liabilities on their balance sheet.

Speculation mounted when Mr Burnham became prime minister that he could reform the inheritance tax system.

Reports have suggested that the government could scrap the tax altogether in favour of a 10 per cent levy on all estates upon death to fund his flagship NHS-style social care service.

But the government has distanced itself from the idea, telling reporters that Mr Burnham’s plans for social care won’t rest on not imposing “one particular solution or tax”.

Mr Healey has faced pressure from opposition parties to reduce spending on benefits.

Speaking at his first Labour conference speech as chancellor, he told members it is not progressive “to allow a bigger and bigger benefits” bill.

Sir Keir and Ms Reeves faced a massive backbench rebellion when they sought to table their own welfare reforms in June 2025 and were forced to perform a U-turn.

But Treasury sources said the speech was Mr Healey’s attempt to “make a moral case for welfare reform in a way that bringing the party with them”.

In his speech at the Labour Party conference last month, Mr Burnham also said the government could get the welfare bill down by supporting more people into work.

But he ruled out “crude cuts” to benefits, saying that should “never be the Labour way”.

One of the biggest challenges facing Mr Healey is that he will have to set out how the government will fund £5bn of defence spending announced in May’s Defence Investment Plan (Dip) without details of how it would be paid for.

He will come under pressure to increase that funding further, having resigned as defence secretary ahead of publication of the Dip, arguing it did not provide enough money for the armed forces.