Chancellor John Healey will deliver the first Autumn Budget under the new Prime Minister Andy Burnham, and while the broader mission remains to provide solace to a population that is fatigued by the higher cost of living and businesses in need of more growth, Labour is expected to hunt for new avenues of revenue while pumping the brakes on income taxes. As with many governments, for better or worse, there is never enough money to do everything they want.
Possible new revenue targets include requiring platforms like Amazon, eBay, and Temu to collect VAT directly from third-party sellers. Banks are once again in the sights of government policy, as some expect a higher bank charge to raise tax revenue without upsetting the masses. Other measures, like raising the threshold for small businesses to pay taxes or temporary assistance on energy bills, may make the cut.
Ultimately, more growth needs lower taxes and less red tape, not more. So will the Burnham government deliver?
Richard Hilton, Executive Vice President of Growth for UK and Ireland at Vistra, says reforms to corporate reporting welcome easing of compliance burdens.
“Cutting unnecessary paperwork will free up valuable time for resource-strapped small business owners, as well as multinationals managing complex corporate structures. However, simpler reporting does not equate to fewer responsibilities. Firms should use this opportunity to review and streamline their processes, and ensure that records and data remain accurate and up to date. Multinationals will also need to understand how the changes apply across their corporate structures, which entities qualify for exemptions, and what reporting and tax obligations remain.”
He adds the compliance reforms do not mean good governance should slip.
Decta CEO Scott Dawson says the mood in the UK has been pessimistic for some time, adding that the latest numbers show the economy grew by 0.1% in August, not a reason to celebrate, but still some growth.
“It also comes as the International Monetary Fund (IMF) praised the UK’s plans to reduce its annual levels of borrowing in contrast to many other G7 countries. These factors suggest that, after years of economic uncertainty, there are reasons to believe the foundations are becoming more stable. As we approach the Autumn Budget, this is important context. Fiscal credibility alone will not deliver the stronger growth or higher living standards the country needs, but we should be careful not to confuse a challenging economic climate with an economy incapable of progress.
While the UK is not “firing on all cylinders, Dawson believes the current environment is not as bleak as public sentiment leans.
“ I would hope therefore that this Budget builds on the progress being made, giving businesses greater confidence to invest and creating conditions needed for sustainable growth. Ultimately, the Budget should be judged on whether it can turn those tentative signs of progress into something people and businesses can genuinely feel.”
San Nakra-Shah, co-founder and Managing Partner at ChilliMint Europe, says August growth and 3.5% CPI inflation will dominate the run-up to the budget, as they should. At the same time, he wonders if they are missing the big picture.
“We spend an awful lot of time talking about how to attract big businesses and major investment into Britain. Of course that matters. But what about the millions of smaller businesses we already have? Many are employing people, creating jobs and have ambitions to grow. Just imagine what they could achieve if we made it easier for them to take that next step. I can see the opportunity in our own business. At ChilliMint, we’re investing heavily in AI because we see ways to do things we couldn’t do before. We want to develop new capabilities, offer more to our clients and grow the business. This isn’t about doing the same work with fewer people. And I suspect thousands of other businesses are thinking along similar lines.”
He believes the Chancellor can make a significant impact by making it easier for businesses to invest in new technology.
“If we’re serious about getting the economy moving, perhaps we should spend a little less time looking for the next big investment to come into Britain, and a lot more time helping the businesses we already have become the big businesses of tomorrow.”
REGnosys CEO Leo Labeis believes keeping capital gains taxes unchanged will reassure founders and investors, but tax stability alone won’t secure the UK’s fintech future as global competition intensifies.
“The Government must do more to attract investment and give businesses the confidence to scale. The Autumn Budget is an opportunity to turn ambition into action. RegTech should be a priority. The UK has a clear competitive advantage through its world-class financial services industry, regulatory expertise and technology ecosystem, but it cannot afford to take that position for granted. As rising compliance costs and regulatory complexity put pressure on financial institutions, backing homegrown RegTech innovation could reduce inefficiencies, strengthen market resilience and boost competitiveness. If the Government is serious about securing the UK’s position as a global financial leader, RegTech must be treated as a strategic priority, not an afterthought.”
The Autumn Budget will be presented this Wednesday at 12:30 GMT.
