Michael Morter, Tax Director at chartered accountants Lovewell Blake, says that any tax-raising measures in the Budget would be more likely to take effect in the next tax year, and that changing plans on the basis of unreliable predictions about what the Chancellor will say is unwise.
“Unlike Rachel Reeves, John Healey has been tight-lipped about what will be in his Budget, but I think it’s safe to assume that it will be a tax-raising affair. His options are limited, given the combination of existing manifesto promises on income tax, VAT and employees’ national insurance, and the fact that changes to corporation tax have also been ruled out.
“It is possible that we may see a rise in capital gains tax. We know that there is some pressure from within the Labour Party to align CGT with income tax, but John Healey has since stated he will not do this. However, we may see the higher-rate of CGT increase again; I wouldn’t be too shocked if it rose from 24% to 28%.
“That doesn’t mean that investors, business owners and entrepreneurs should panic, or indeed necessarily rush into changing their plans. An adage of mine is ‘if you were going to do something anyway then go ahead and do it.’ Hindsight is a wonderful thing, but I would not recommend reacting in advance to a budget where you don’t really know what is going to be in it.
“So if you were thinking of crystallising an investment or already have plans to sell assets, then go ahead and do it, but don’t panic and do something you are not really comfortable with just because you are worried about some theoretical tax change which may or may not occur. Quite often, undertaking sensible planning can be more effective than panic moves which generate tax liabilities immediately.”
The Budget will be presented by Chancellor John Healy on Wednesday 28th October.
Lovewell Blake is holding a Budget breakfast briefing, hosted by Newsquest Editorial Transformation Director Richard Porritt, on Thursday 29th October at Bawburgh Golf Club. For more details, and to reserve a place, visit www.lovewell-blake.co.uk/events/event/budget-2026-norwich.