The Autumn Budget date has now been set for 28 October, with the new Chancellor facing some familiar challenges.
At the end of a fortnight heavily laden with announcements from Prime Minister Andy Burnham and his revised cabinet, what may prove to be the most significant statement made its appearance late on a Friday afternoon: the date of the Autumn Budget. The new Chancellor, John Healey, posted a video message revealing the Budget would be on Wednesday 28 October. That is about four weeks earlier in the year than the 2025 Budget but still leaves plenty of time for speculation to build.
So, what can we expect in late October from the second former defence minister named Healey to occupy 11 Downing Street? Among a long list to watch for are:
- Income tax: At the end of his first week, Burnham told The Times that the “frustration about the personal allowance” he experienced during his Makerfield by-election campaign had “lodged in my mind”. Shortly afterwards, he was more cautious: “There is no commitment at this point to change, but we will look at that at the Budget”. Any move away from the freeze that lasts until April 2031 would be costly.
- The VAT cut to electricity bills: This was Burnham’s first “breathing space” announcement, which the government said was “expected to take around £45 off the yearly Ofgem price cap in October”. However, it subsequently emerged the cut is only for six months, so it will be interesting to see whether Mr Healey makes any mention of its extension beyond March 2027.
- State pensions and tax: In her last Budget, Rachel Reeves said that “we are ensuring that people only in receipt of the basic or new State Pension do not have to pay small amounts of tax through Simple Assessment from April 2027”. No more detail has emerged since; in the meantime, many tax experts have highlighted a variety of complex issues raised by the seemingly simple goal.
- The fiscal rules: When announcing the date of his Budget, John Healey was careful to say that “It will meet our fiscal rules’’. At present, this could mean tax rises as the latest estimates suggest more than half of the all-important fiscal headroom has disappeared since March, due to the fallout from the Iran war.
As ever, if you wish to undertake any pre-Budget planning, do not delay.
The full Budget 2020 announcement can be found here.
Photo by Anthony Tyrrell on Unsplash
