Healey first Budget: energy Relief, tax crackdown on online retailers expected

Chancellor under pressure to fund defence and social pledges ahead of 28 October statement

By LineZotpaper

Published23 October 2026

Read Time3 min

Chancellor John Healey is preparing to deliver his first Budget on 28 October, under pressure to fund Prime Minister Andy Burnham's policy agenda while tackling household energy costs. Speculation surrounds potential tax reforms, including a crackdown on online retailers and changes to capital gains and inheritance taxes.

Chancellor John Healey is days away from delivering his first Budget as Prime Minister Andy Burnham seeks to set out the government's fiscal priorities. Mr Healey is under pressure to find billions of pounds in savings to fund an increase in military spending and the pledges set out by the prime minister.

As with any Budget, speculation surrounds the statement to be delivered on 28 October. Mr Healey has hinted at further help with energy bills, telling ITV News: “Energy costs are punishing at the moment... We will do what we can in the Budget, both for business and for households, to give people a bit of breathing space.” It has been reported he is looking to spend over £1 billion to expand the Warm Home Discount.

According to The Times, ministers are preparing a tax crackdown on online marketplaces such as Amazon, eBay and Temu. The policy is expected to make them responsible for collecting VAT from foreign sellers, raising up to £1 billion to cut business rates for high street shops.

A new ‘Your First Home’ scheme, announced last month, is expected to feature in the statement. The scheme offers mortgages with a 2.5 percent deposit and a loan of 20 percent of a property’s value. Income limits are being considered, potentially rising to £110,000 outside London and £140,000 within.

Speculation swirls around capital gains tax, with proposals to raise the rate to 45 percent from the current 18 to 24 percent. Experts have warned such a hike could cause business owners to defer sales or move money abroad.

Other areas of rumoured reform include an expansion of the “mansion tax” on properties over £1.5 million, a potential review of stamp duty in favour of a Land Value Tax, and changes to fuel duty. A planned rise on fuel duty from 53p to 56p per litre is due in January, but Mr Burnham has left the door open to halting it, saying that “every possible measure” is being considered to ease the cost of driving.

On bank taxes, the TUC has called for a windfall tax on banks to fund a social energy tariff. City bosses, however, have argued the UK’s financial sector “already faces a higher tax burden than our key international competitors.” Reports that the government could scrap inheritance tax for a 10 percent levy to fund social care have been played down by officials.

Analysis

Why This Matters

The Budget will set the fiscal direction for the Burnham government, affecting household finances through energy costs, property taxes, and welfare.
The proposed crackdown on online marketplaces signals a major shift in business regulation, aiming to rebalance the high street against global e-commerce.
Decisions on defence spending and social care reform will define the government's core priorities within tight fiscal constraints.

Background

The Burnham government inherited a challenging fiscal position. Chancellor John Healey must balance demands for increased defence spending with the funding of the prime minister's domestic pledges. The Budget on 28 October is his first major policy statement and is seen as a crucial test of the government's discipline and direction. Speculation has been relatively contained, but expectations for significant tax and spending changes are high.

Key Perspectives

[Households and Energy Consumers]: [Planned expansions to the Warm Home Discount and a potential freeze on fuel duty are designed to ease immediate cost-of-living pressures. Campaigners argue this is a short-term fix that does not address long-term energy market reform.] [High Street vs. Online Retailers]: [The proposed VAT crackdown on platforms like Amazon and Temu aims to level the playing field for traditional retailers. The policy is framed as a "Budget for the white van man" and high street businesses.] [Critics and City Bosses]: [Business groups warn that raising capital gains tax and sector-specific bank levies could drive investment and wealth out of the UK. The CBI and UK Finance argue the sector is already uncompetitively taxed, while the TUC pushes for a windfall tax on bank profits to fund social tariffs.]

What to Watch

The specific rate and threshold in the energy price cap intervention and the scale of the Warm Home Discount boost.
Whether the government confirms the income limits for the 'Your First Home' scheme and the details of the online marketplace VAT responsibility rule.
The final decisions on Capital Gains Tax rates and the "mansion tax" threshold, indicating the government's approach to wealth taxation.

Sources

From capital gains tax to fuel duty: What to expect from the Budget · The Independent UK

Checked

12 claims in this story checked against 1 source: 7 supported.

Show each claim

Partly supportedThe headline says a tax crackdown on online retailers is expected.The Independent UK: “Ministers are reportedly preparing to announce a tax crackdown on online retailers”
SupportedHealey said energy costs are “punishing at the moment” and that the government would do what it could in the Budget to give households and businesses breathing space.The Independent UK: “Mr Healey hinted at further help with energy bills on Thursday, telling ITV News: “Energy costs are punishing at the moment. ... “We will do what we can in the Budget, both for business and for households, to give people a bit of breathing space.””
SupportedBurnham said “every possible measure” was being considered to ease the cost of driving.The Independent UK: “Mr Burnham has left the door open to halting the planned rise, saying last month that “every possible measure” is being considered to ease the cost of driving.”
SupportedHealey is due to deliver his first Budget on 28 October.The Independent UK: “John Healey is days away from delivering his first Budget as chancellor”
Partly supportedHealey is under pressure to fund defence spending and the prime minister’s social pledges.The Independent UK: “Mr Healey is under pressure to find billions of savings to help ramp up Britain’s military spending, whilst also ensuring the string of pledges set out by the prime minister during his first weeks in office are fully funded.”
SupportedHealey is reportedly looking to spend over £1 billion on expanding the Warm Home Discount.The Independent UK: “It has also been reported that he is looking to spend over £1bn to see greater discounts applied to households less able to afford rising costs. This will likely come in the form of an expansion of the existing Warm Home Discount”
Partly supportedOnline marketplaces are expected to become responsible for collecting VAT from foreign sellers.The Independent UK: “Mr Healey is reportedly looking at ensuring that multibillion-pound online marketplaces such as Amazon, eBay and Temu will be made responsible for collecting tax owed by retailers selling on their platforms. The policy, reported by The Times, will crack down primarily on foreign sellers who abuse the rules to avoid paying VAT.”
SupportedThe online-marketplace policy is expected to raise up to £1 billion for business-rate cuts.The Independent UK: “It is expected to raise as much as £1bn, money which will be used to cut business rates for high street shops.”
SupportedThe ‘Your First Home’ scheme offers a mortgage with a 2.5 percent deposit.The Independent UK: “The new ‘Your First Home’ scheme will give savers access to a mortgage with just a 2.5 per cent deposit.”
SupportedThe ‘Your First Home’ scheme offers a loan worth 20 percent of a property’s value.The Independent UK: “A loan with 20 per cent of the property’s value will also be available to help pay for the purchase as part of the scheme.”
Partly supportedThe proposed mansion-tax expansion would cover properties over £1.5 million.The Independent UK: “there has been speculation that the prime minister is considering an expansion to the plans, lowering the threshold to include properties worth at least £1.5m.”
Partly supportedFuel duty is due to rise from 53p to 56p per litre in January.The Independent UK: “It is now due to rise on January 1, from almost 53p per litre to almost 56p”

Correction

23 October 2026An earlier version of this story presented a paraphrase of Mr Burnham's remarks about the cost of driving as a direct quote. Only the words “every possible measure” were quoted directly in the source.