Every autumn brings the same ritual ahead of the Budget: weeks of speculation, a scramble of “act now” headlines, and then an announcement that rarely matches the rumors. The Autumn Budget 2026 is on 28 October, and this year the noise is louder than usual. A new Prime Minister, a new Chancellor, borrowing costs at an 18-year high and a long list of spending pledges have made tax rises close to a certainty. The question is which ones.
Cubed Consultancy directors Mark Munnelly and Richard Colwell have each put one prediction on record. This article sets out the reasoning behind both, runs through the other measures being discussed, and ends with what’s worth reviewing before Budget day.
This article is for general information only and is not advice. Nothing here is a recommendation to buy, sell or restructure anything. Tax depends on individual circumstances and rules change; speak to a qualified adviser before acting.
Why is the government under pressure to raise taxes?
The short answer: the money has to come from somewhere, and more than half the tax system is fenced off.
Labour’s manifesto committed to no increases in the rates of income tax, National Insurance or VAT. Andy Burnham has repeatedly said he’ll honor that — most recently while refusing to rule out other tax rises. Those three taxes make up over half of all UK revenue, so the pledge removes the biggest levers from the table.
Meanwhile the pressures have grown. Debt is around 95% of GDP; debt interest hit £11.8bn in June alone; and gilt yields — the government’s borrowing cost — reached an 18-year high on the 10-year this month. The Resolution Foundation has argued taxes on middle earners must rise to fund defence ambitions; the Institute for Fiscal Studies has been blunt about the shrinking headroom. Add the early Burnham announcements — VAT off domestic electricity from 1 October, a £2 bus fare cap outside London from January 2027, a 20% business rates cut for pubs, clubs and music venues from April 2027.
This would be the third tax-raising Budget in three years, after around £40bn in October 2024 and £26bn in November 2025.
Mark’s prediction: capital gains tax rises
The short answer: CGT is the most widely tipped rise, and the one with the clearest logic behind it. Mark’s call is that it goes up — with a particular impact on anyone owning more than one property.
Capital gains tax is charged on the profit when you sell something that’s grown in value — shares, a business, a second home. It currently sits at 18% or 24% depending on your income tax band, while income tax runs to 40% and 45%. That gap is the argument. Aligning the two is backed by senior cabinet figures, and CenTax estimates a broader CGT reform package could raise around £14bn a year.
What’s changed this month is the weight of opinion. Jim O’Neill – former Goldman Sachs economist advising the Prime Minister — told City AM a CGT hike “looms” as the top option, even while calling it “the last thing that should be happening when we want more growth.” The i Paper’s expert panel rated it the most likely rise of any on the table. Blick Rothenberg’s Nimesh Shah has floated 30% as a compromise rate.
Who actually pays capital gains tax?
HMRC’s own figures, analysed by the Centre for Policy Studies, show that around 32,000 taxpayers — just over 10% of everyone who pays CGT — account for roughly 80% of all gains. A rise raises billions and almost nobody feels it in their payslip. Unless you’re one of the 32,000.
What a CGT rise would cost on a £100,000 gain
What it would mean in practice: on a £100,000 gain, a higher-rate taxpayer currently pays £24,000. At income tax rates that becomes £40,000–£45,000. For someone selling a business they spent twenty years building, that’s not a tweak — it’s a different retirement.
The counter-argument worth knowing: Treasury modelling has suggested that CGT rises can reduce revenue, because owners simply hold assets rather than sell. That’s why a modest rise, or one announced for a future date, is more likely than a dramatic overnight jump.
Mark’s second call: stamp duty changes to help first-time buyers
The short answer: Making it cheaper to get onto the ladder while raising more from those with multiple properties.
Alongside CGT, Mark expects movement on Stamp Duty Land Tax aimed at first-time buyers. The direction of travel is consistent with a government that has talked about housebuilding and “breathing space” on the cost of living, and it pairs with a CGT rise on second properties.
Two more technical property measures are also in the frame: an increase in the Annual Tax on Enveloped Dwellings (the charge on residential property over £500,000 held in a company), and closing the SDLT gap where commercial property is sold via the company that owns it rather than the property itself. If you hold property through a corporate structure, this is the section to read twice.
Our Retail and Construction pages cover how property held in a business interacts with all of this.
Richard’s prediction: the personal allowance rises from £12,570
The short answer: the outside bet — and Richard’s pick precisely because nobody’s pricing it in.
The personal allowance — the amount you earn before paying any income tax — has been frozen at £12,570 since 2021, with the freeze currently running to 5 April 2031. Burnham floated raising it during his leadership run. It’s the one measure on this list that would put money directly back in the pockets of millions of working people, and it doesn’t touch the manifesto because it’s a threshold.
The case against is cost: even a £500 increase is estimated at around £5bn a year, which is why most commentators think it’s been sidelined. Richard’s reasoning is that it’s the kind of announcement a new Prime Minister uses to define a first Budget.
Whichever way it goes, the allowance is the tax most people actually notice. If it moves, everyone in work feels it by the following payslip.
What is fiscal drag, and why does it matter more than the headline rates?
The short answer: the rates are protected. The thresholds aren’t — and freezing them is a tax rise nobody has to announce.
Income tax thresholds are frozen until April 2031. Every pay rise, bonus or increase in investment income pushes more people over the £50,270 higher-rate line or the £100,000 point where the personal allowance starts to taper — with the headline rates untouched. This is how the manifesto pledge and rising tax bills coexist.
If your income sits near one of those lines, this matters more than anything else in this article. Pension contributions, salary sacrifice and charitable giving all reduce taxable income.
Inheritance tax and pensions: what’s already changing, and what might
The short answer: the big IHT change is already law — unused pensions come into the estate from 6 April 2027. Further changes in this Budget are possible but politically expensive.
The nil-rate band has been frozen at £325,000 since 2009, the residence nil-rate band adds £175,000 for a family home passing to direct descendants. Neither has kept pace with property prices, particularly across Hertfordshire and the South East.
The i Paper’s 3 September report placed an inheritance tax “raid” alongside CGT as newly more likely. Speculation centers on tightening of business and agricultural property reliefs, and on the CGT uplift on death — the rule that resets an inherited asset’s base cost to market value. Abolishing that uplift is estimated at £1.5bn–£2bn a year. Against this, MPs remember the political cost of the April 2026 IHT changes for farmers and business owners, which argues for caution.
On pensions, the tax-free lump sum (currently capped at £268,275) resurfaces as a rumour every year and has never been touched. Major pension changes are an outside chance this time; a small levy on fund management fees is the sort of quiet measure a Chancellor might reach for instead.
If your estate plan leans on pensions or business relief, our wealth management team can walk through what the 2027 change does to it.
Is a wealth tax likely?
The short answer: almost certainly not in this Budget, despite getting most of the headlines.
A 2% annual levy on wealth over £10m has vocal backers among Labour MPs and campaigners. But the revenue estimates run from £24bn a year to close to zero, Tax lawyer Dan Neidle has pointed out that no country has made a tax like this work, and it faces cabinet opposition. The government ruled out an “exit tax” on entrepreneurs this month, which tells you which way the wind is blowing.
The wealth tax is the one everyone’s watching. CGT is the one that’s actually likely.
What about business rates in the Autumn Budget 2026?
The short answer: three separate schemes are being reported as one, and only one is live today.
The 15% relief for pubs and music venues announced in January is on bills now. The 20% cut for pubs, clubs and live music venues — worth around £1,100 to a typical pub, nearly 32,000 venues — doesn’t start until April 2027, and excludes the largest venues. The government’s own announcement funds it through a review of reliefs for businesses that “do not make a positive contribution to local communities” (vape shops are named) and a crackdown on online marketplace VAT compliance. A reform of Small Business Rates Relief has been promised — so the threshold change many high-street businesses are hoping for is still a pledge.
What should you review before the Autumn Budget 2026?
The honest answer: don’t make decisions on speculation. Do use the time.
The measures above are predictions, and several of them contradict each other. Nobody should be selling assets or restructuring a business because of a headline. But there are five positions worth understanding before Budget day, so that whatever’s announced, you already know where you stand:
- Unrealised gains. Know what you’re sitting on — in shares, property or a business — and what the tax would be at today’s rates versus income tax rates.
- Income near a threshold. If you’re close to £50,270 or £100,000, know how much headroom you have and what pension contributions or salary sacrifice would do to it.
- Property held in a company. Understand what ATED and the SDLT changes would mean for the structure you already have.
- Your estate plan. If it relies on pensions or business relief, the 2027 change is already coming; the Budget may add to it.
- Cash flow around 28 October. If a sale, purchase or exit is genuinely in your next twelve months, the Budget date belongs in that plan.
Our tax team works through exactly these questions with business owners across Harpenden, St Albans, Hertfordshire and internationally.
Mark and Richard’s predictions, on record
- Mark: capital gains tax rises, hitting owners of more than one property — with a stamp duty change to help first-time buyers.
- Richard: Personal allowance lifted from £12,570.
