After last year’s blunder by the Office for Budget Responsibility (OBR) – which saw former Chancellor Rachel Reeves’ announcements being leaked before she delivered them – it may not come as a surprise that media speculation in 2026 seems muted.
With the Budget fast approaching, speculation about what might be in store seems to be relatively quiet. One reason for this could be that the Government wants to avoid a major tax-raising Budget, something suggested by many pundits and financial experts, such as KPMG, the global accountancy firm.
Another reason there isn’t any suggestion that something significant could be announced may be that the Government doesn’t want to reveal its hand just yet. Ultimately, all will be revealed when the Chancellor, John Healey, delivers his budget on Wednesday 28 October.
So, against this backdrop, let’s look at five areas of taxation that the media has been speculating about, and what could happen on the day.
1. Income Tax and Personal Allowance
The good news could be that any increases to Income Tax, employee National Insurance Contributions (NICs) and VAT seems to have been ruled out. This is because the PM has said he would honour Labour’s 2024 manifesto pledge of not raising them.
That said, Which? has speculated that the Chancellor could review the Personal Allowance, which is the amount you’re allowed to earn before Income Tax is charged. It’s been frozen at £12,570 since April 2021 and will remain at this level until April 2031.
If a review were to happen, it would no doubt be driven by the Prime Minister, who said peoples’ frustration towards the allowance was ‘lodged in his mind’ after canvassing for the Makerfield by-election. That said, the UK’s current financial position could make any decision to ease the existing freeze extremely difficult.
Indeed, with the current financial climate in mind, KPMG has mooted the idea that the Chancellor could extend the freeze until 2032 to raise revenue. It adds that the extension could then be reversed if the public finances improve.
2. Capital Gains Tax (CGT)
First Secretary of State Louise Haigh and other high-ranking Labour MPs called for an overhaul of CGT earlier this year. Together they argued that the current system unfairly favours unearned wealth over wages and have lobbied the Chancellor to bring CGT in line with Income Tax.
This, they said, would help to ensure earned income isn’t taxed more heavily that gains made on assets. While the BBC recently revealed the Chancellor has rejected calls to raise CGT, with so much speculation around it, it could still be one to keep an eye on.
3. Banking tax
In 2023, former Chancellor Jeremy Hunt reduced the surcharge banks pay on Corporation Tax, cutting it from 8% to 3%. Corporation Tax is the tax British companies pay on profits.
According to the Guardian, HSBC, NatWest, Barclays and Lloyds Banking Group alone generated £200 billion in pre-tax profits over the past five years. The article also reveals that the Chancellor may now be looking to reverse the surcharge cut and may even take it back up to 8%.
The BBC, on the other hand, suggests John Healey may increase the surcharge to 5.5%, raising up to £2 billion a year for the Treasury. Another option could be to increase a tax called the 'bank levy', which is a small percentage charged on loans.
4. Property and land
The PM is in favour of a new Land Value Tax which would replace Council Tax and Land Stamp Duty. While it’s looking unlikely that the Land Value Tax will be introduced in this Budget, Mr Burnham has indicated that incremental reforms might be made to Land Stamp Tax or Council Tax. As such, it’s an area to watch.
Owners of self-catering accommodation could also face an increase in taxes, according to a Moneyfacts article. It suggests Mr Healey is considering taxing holiday lets as a second home rather than a business.
If he does, it could cost a typical holiday let owner between £1,000 and £3,000 a year.
5. Mansion Tax
In the 2025 budget, Rachel Reeves announced plans for a 'high-value council tax surcharge' in England. The new tax would start in 2028, with an annual charge of £2,500 for properties valued at more than £2m.
This would then increase to £7,500 for properties worth more than £5 million.
However, the Times reported that the Burnham Government was considering lowering the Mansion Tax threshold from £2 million to £1.5 million. This is looking unlikely though, after the media later reported that the Chancellor has ruled this out.
Find out more on the day
If you would like an insight into the Budget on the day, and a roundup of the announcements made, look out for our blog. We’ll bring you an easy-to-understand summary of the Chancellor’s Budget and what it might mean for you.
We’ll post it as soon as we can after the Budget, which starts at 12.30pm on Wednesday 28 October. So please do keep an eye open for it on the day!
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Please note: this article reflects media commentary, conjecture, and unofficial publicly available information before the Budget. The measures discussed are speculative unless stated otherwise and may not be announced or may still be subject to change before becoming law.
26 October 2026