With Chancellor John Healey due to deliver his first Budget on 28 October 2026, Budget 2026 speculation is gathering pace across business, tax and economic circles.
For businesses, business owners and investors, the key question is simple: where will the government find additional revenue while keeping its manifesto commitment not to increase the main rates of Income Tax, VAT or National Insurance?
At The MGroup, we regularly help businesses navigate changing tax and economic conditions. While no announcements are confirmed until Budget Day, understanding the likely direction of travel can help business owners plan with greater confidence.
Why Budget 2026 Matters
Much of the speculation stems from concerns about rising inflation, increased borrowing costs and pressure on public spending.
The Institute for Fiscal Studies has suggested the government may need to balance significant spending commitments against tightening fiscal headroom. As a result, commentators expect targeted tax changes rather than major headline-grabbing tax increases.
Partner Insight
“Periods of tax uncertainty often create the biggest opportunities for businesses that plan early and remain financially flexible.” Says Chris Denton, Partner at The MGroup.
For many businesses, the impact may not come from one large tax rise but from several smaller policy changes affecting costs, investment decisions and cash flow.
Business Rates Could Be a Major Focus
One of the strongest rumours ahead of the Budget concerns commercial property taxation.
Reports suggest the Chancellor is considering increasing business rates on commercial properties with rateable values above £500,000. The proposal is believed to focus primarily on office buildings, particularly in London and the South East, with some larger retail and hospitality properties potentially exempt.
If introduced, the policy could reportedly raise around £1 billion annually.
Meanwhile, smaller businesses may benefit from reforms. There has also been speculation that the Small Business Rates Relief threshold could increase, potentially removing some smaller firms from business rates entirely.
This would create a clear contrast between support for smaller enterprises and increased contributions from larger commercial property owners.
Could Banks Face Higher Taxes?
The banking sector is another area attracting significant attention.
Various reports suggest the government is considering increasing the corporation tax surcharge currently paid by banks. Some commentators have even suggested the current 3% surcharge could rise substantially.
Supporters argue banks remain profitable and can contribute more towards public finances. However, critics warn that further taxation could reduce lending capacity and deter investment into the UK financial sector.
For businesses relying on borrowing facilities, this is one development worth monitoring closely.
Partner Insight
“When governments are constrained on major taxes, they typically look for narrower sectors where revenue can be raised with limited political impact.” Says Ollie Squire, Partner at The MGroup
This makes targeted industry levies more likely than broad-based tax increases.
Measures to Support Employment
Not all Budget 2026 speculation involves tax increases.
Several reports suggest the Chancellor is exploring measures to reduce the cost of hiring younger workers.
Potential options include:
- Extending National Insurance relief
- Targeted tax incentives for employers
- Hiring support schemes for under-25s
- Youth employment tax holidays
For employers facing recruitment challenges, these measures could help reduce staffing costs while supporting workforce development.
Digital Tax Collection Could Expand
Another widely discussed proposal would require online marketplaces such as Amazon, eBay and Temu to collect VAT directly from qualifying sellers.
Under reported proposals, VAT could be collected at source for business sellers exceeding the VAT registration threshold.
The objective would be to improve VAT compliance while reducing administrative burdens on HMRC.
Businesses selling online should keep a close eye on developments in this area, particularly if they use multiple marketplace platforms.
Other Areas Under Consideration
Beyond business taxation, several other measures continue to feature in Budget discussions:
Property Taxes
Potential reforms include:
- New surcharges on high value residential properties
- Changes to second home and holiday let taxation
- Further business property taxation reforms
Gambling Duties
Reports suggest ministers are considering higher taxes on certain gaming and betting activities while limiting impacts on pubs, bingo halls and seaside attractions.
Fuel Duty
The Chancellor is also expected to decide whether to extend the temporary fuel duty cut, a move that would be welcomed by motorists and logistics businesses alike.
Private Aviation
Cross-party MPs have called for private jets to face higher taxation and the removal of some existing fuel duty advantages.
What Should You Do Now?
Regardless of what is finally announced on 28 October, businesses should consider taking proactive steps:
✅ Review cash flow forecasts for the next 12 months
✅ Assess potential exposure to business rates changes
✅ Review borrowing requirements before year-end
✅ Evaluate property ownership and leasing structures
✅ Monitor staffing plans and potential employment incentives
✅ Stay informed about VAT compliance developments
✅ Seek professional advice before making major decisions
Key Takeaways
- Budget 2026 speculation is centred on targeted tax measures rather than major headline tax increases.
- Business rates remain one of the most likely areas for reform.
- Banks, property owners and online marketplace sellers could face significant changes.
- Employment incentives for younger workers may provide opportunities for employers.
- Early planning will help businesses respond quickly once announcements are confirmed.
How We Can Help
At The MGroup, we help businesses and individuals understand the practical implications of tax and economic policy changes.
Whether you are reviewing business structures, planning investments, managing cash flow or preparing for potential tax changes, our team provides clear, proactive and commercially focused advice.