UK BUDGET COULD BRING TOUGH CHOICES FOR FAMILIES AND BUSINESSES 

Chancellor John Healey faces mounting pressure to balance the public finances while delivering relief for households and supporting economic growth, ahead of the UK Budget on 28 October.

With borrowing costs rising and the Government facing billions of pounds in spending pressures, speculation is growing over where additional revenue could come from.

Potential measures include changes to capital gains tax, pension tax relief and business rates.  The Chancellor is considering proposals to levy income tax when business owners hand their company down to the next generation, potentially almost doubling the bill. 

The plan would affect entrepreneurs who wanted to retire, in an attempt by Labour to raise hundreds of millions of revenue. Family businesses have already been hit by inheritance tax changes that are expected to generate £300m a year. The Treasury has not confirmed the reported proposals. 

Healey is also under pressure to support farmers, small businesses and struggling households, while finding money for public services and defence.

The challenge is that tax increases could discourage investment and place further pressure on businesses, while spending cuts risk adding to the strain on already stretched public services.

With major tax rises on income tax, VAT and employee National Insurance constrained by Labour’s manifesto commitments, the question is whether Healey can deliver meaningful relief without creating further uncertainty for the British economy.