Things Business owners should look for in Healey's first Budget

Andy Burnham has promised to be pro-business and to expand the state. On 28 October, his Chancellor has to pay for both. Here's where the money could come from, and what it could mean for your tax bill.

Burnham wants to be the “pro-business leader” who makes Britain the most pro-growth country in the world. He also wants to preserve and improve the NHS, publicly owned utilities and the biggest council house building programme since the war; all whilst devolving power away from Westminster

However, you can't judge a government by the quality of it's promises alone, so what are they going to actually enact?

The Institute for Fiscal Studies estimates Chancellor John Healey needs around £35bn of tax rises or benefit cuts to avoid real-terms cuts to public services and fund higher defence spending. The government has since ruled out raising the main rates of income tax, VAT and National Insurance. So the money has to come from somewhere else.

Where it comes from will act as a fantastic indicator of what this Government wants to be seen as: is this a government that prioritises growth, or one that prioritises the state?

The £35bn gap in plain numbers

Here's how the IFS got here, using its estimates for 2030–31:

• £25bn to stop departmental budgets being cut in real terms
• £11bn to lift defence spending to 3% of GDP by 2030

The buffer is thin. The IFS puts headroom against the fiscal rules at around £20bn, down from £24bn in March, and says uncertainty is “very high”. Debt interest plays a big part in this, as it has more than doubled as a share of GDP since 2019 and now takes £1 of every £13 the government spends. For scale, £35bn is bigger than the £25bn rise in labour taxes that came with Rachel Reeves' 2024 much-maligned employer National Insurance increase. There are only three ways to close a gap like this:

1. Grow into it. Faster growth lifts tax receipts without raising rates. It's the best route and the slowest. The BCC forecasts just 1.0% GDP growth this year.

2. Spend less. Usually this means welfare. Burnham has said he's “not squeamish” about reducing the welfare bill, but has ruled out “crude cuts”.

3. Tax more, in smaller pieces. With the main rates off the table, that points to capital, wealth and business profits.

The mix Healey chooses is the answer to our question. More of the first two looks like a growth government. More of the third looks like a government asking business to fund the state.

3 Things we're looking out for

On Budget day, ignore the soundbites and follow the money. Here are three questions will tell you most of what you need to know:

1. How much of the £35bn comes from capital and owners? If capital gains tax, buy-backs and exit reliefs carry the load, the government is funding the state from the people who build businesses. That's the welfare-state answer.

2. Is welfare reform real, and is it counted? Burnham promised a “preventative, productive, growth-enabling state” that gets people into work. Look for savings the Office for Budget Responsibility actually scores, not ambitions pencilled in for later. Real reform means less pressure on business to fill the gap.

3. Do the growth measures reach beyond the high street? Burnham is a champion of the high street, but this covers just a few sectors. A rates cut for pubs is welcome, but a broad cut in employment costs or relief that reaches every sector is a growth strategy.

What we recommend

Regardless of what lies within the famous red briefcase, there are some things you can do to ensure you put your best foot forward:

1. Don't act on a headline. Some tax changes take effect from the moment they're announced. Even so, rushing a deal to beat a rumour can cost more than the tax you were trying to avoid. Get the numbers first, then decide.

2. Revisit how you pay yourself. Dividend rates rose by 2 points in April. If capital gains or buy-back rules change, the balance between salary, dividends, pension and capital shifts again.‍

3. Model the upside too. A cut to employer National Insurance or wider rates relief could make a hire or a new site viable sooner. Know your trigger point so you can move quickly.

4. Book your post-Budget review now. The speech is only the headline. The detail lands in the documents that follow. An hour with us the week after will turn it into a plan.

The spreadsheet will tell the story

Burnham can be pro-business and expand the state, but he can't fund both without asking someone to pay. Next Wednesday, we'll find out who.

If the gap is closed through growth and real welfare reform, ambitious owners have a government worth investing alongside. If it's closed through capital gains and exit taxes, the reward for building a business just got smaller, and your plans need to reflect that.

Either way, you'll want the numbers before you make your next move. That's where we come in.

Book your post-Budget review

Accountants for ambitious people. We don't guess. We guide.

Sources

• IFS Budget preview, via The Independent / Yahoo Finance
• IFS warning on the £35bn gap, via ITV News
• Which?: Autumn Budget 2026, when is it and what will it contain
• TaxAssist: Autumn Budget 2026 rumours and predictions for businesses
• Simply Business: What could Andy Burnham mean for small businesses?
• City AM: Five graphs that reveal Burnham's fiscal headache
• Benefits and Work: Burnham not squeamish about reducing welfare bill
• Saffery: APR and BPR cap raised to £2.5m
• Which?: Capital gains tax if you sell a business
• British Chambers of Commerce Quarterly Economic Survey Q3 2026
• British Chambers of Commerce Economic Forecast, September 2026
• Barclays business survey, October 2026 (via EuropaWire)

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