Three days before the 28 October Budget, BBC News reported that Chancellor John Healey is weighing four specific ways to raise money without touching income tax: a bigger tax on banks, higher duty on gaming machines, making online marketplaces collect VAT from sellers, and cuts to welfare spending. None of the four is confirmed — nothing is until the Budget itself — but together they read as a shortlist shaped by Labour's manifesto promise not to raise income tax, employee National Insurance or the standard rate of VAT. If you run a small VAT-registered limited company, it is worth knowing which of the four would actually land on your own tax return.
Why income tax is off the table
BBC's report frames the first three options as modest on their own: a bank surcharge rise, a gaming machine duty rise and the marketplace VAT change are reported to raise only around £3.5bn a year between them, well short of what a Budget filling a fiscal gap usually needs. That is the context for the fourth, much larger lever — welfare spending — and for Prime Minister Andy Burnham's own language about wanting a "fair and lasting" reduction in the working-age welfare bill. None of the four is a rate change on your own company's profits, which is exactly why they are being discussed as alternatives to the taxes Labour has promised to leave alone.
Option one: a bigger tax on banks
The first lever is the bank surcharge, the extra layer of corporation tax banking companies pay on top of the standard rate. As confirmed on gov.uk, the surcharge for 2026-27 is 3% on a banking company's chargeable profits above an annual allowance of £100 million, in place since April 2023. Raising it again is reported to bring in a further £1bn-£2bn a year. None of this touches the corporation tax your own limited company pays — the surcharge has only ever applied to banks. The route that could reach you is indirect: banks have previously said a higher surcharge feeds into the price and availability of business lending. If you are renewing an overdraft, asset finance or a commercial mortgage, get terms agreed before 28 October if you can.
Option two: higher duty on gaming machines
The second lever will not touch most businesses at all. Machine Games Duty is charged on takings from gaming machines of the kind found in pubs, bookmakers and seaside arcades, banded by the cost and prize size of each game. Gov.uk confirms three current rates for 2026-27: 5% where a game costs no more than 20p with a top prize of no more than £10, 20% where a game can cost up to £5, and 25% above that. BBC's report says Gordon Brown is among those pushing Healey to double these rates, aiming at an extra £275m-£460m a year. If your business doesn't own or host a gaming machine, nothing here changes your own return. If it does — a pub, a social club, an arcade — doubling the duty band would cut into the margin on every machine, worth modelling now.
Option three: making online marketplaces collect your VAT
The third lever actually reaches inside a VAT-registered limited company's bookkeeping, and we set out the full mechanics when this plan first surfaced on 14 October: see our piece on the marketplace VAT crackdown for the detailed worked numbers. In short, if you sell through Amazon, eBay or similar and your turnover sits near or above the £90,000 VAT registration threshold — confirmed on gov.uk, effective since April 2024 — the reported plan would make the marketplace collect VAT at the point of sale and pay it straight to HMRC, instead of trusting each seller to charge and remit the standard 20% rate themselves.
Take an illustrative seller turning over £95,000 a year through one marketplace, just over the threshold, who has not yet registered for VAT. That seller is already legally required to register and charge VAT — this plan closes the enforcement gap where sellers simply don't. Under the reported plan, the marketplace would deduct VAT at source regardless, meaning £15,833 of that £95,000 — one-sixth, the VAT fraction on a VAT-inclusive price at 20% — would go straight to HMRC before it reaches the seller's bank account. For a seller already registered and charging VAT correctly, the tax bill is identical either way. Only the plumbing changes.
Option four: cuts to welfare spending
The fourth lever has nothing to do with your company's own tax return. BBC's report frames welfare spending as the biggest number of the four by far, since the first three combined are expected to raise only around £3.5bn against a Budget likely to need considerably more. For a small employer, the connection runs through staff and customers. If changes move through Universal Credit, some employees who currently receive in-work top-ups could see their household income shift mid-year — worth knowing if someone on your payroll asks why their take-home has changed. On the customer side, a smaller welfare bill can mean less local spending power where benefits make up a meaningful share of household income, a genuine demand risk if most of your customers are individual consumers.
What this list leaves alone
It is worth being clear about what this set of leaks does not include. There is no mention of income tax, employee National Insurance or the standard rate of VAT in BBC's report, consistent with Labour's manifesto commitment on working people's taxes. It also excludes a general rise in Capital Gains Tax: as we covered when that story broke on 20 October, Healey is separately reported to have ruled out moving CGT rates closer to income tax, after Treasury modelling suggested a 10-point rise in the higher rate would actually cost revenue once behaviour changed. Pension tax relief and dividend tax have both been floated elsewhere in the wider run-up to 28 October, but neither featured in this BBC report, and we have not verified a figure for either this week.
What to actually do before 28 October
Nothing here changes what you file this week, because nothing is law until the Chancellor sits down. What is worth doing is reducing how much the next few days can surprise you. If you borrow or are about to, get pricing agreed before the Budget where you can, since lenders sometimes reprice around bank-tax headlines ahead of the actual legislation. If you sell through a marketplace anywhere near the £90,000 threshold, settle your VAT registration position this week, because that obligation already exists today independently of this speculation. If your team includes people on Universal Credit, flag that their household income could move on its own, so a difficult pay conversation doesn't land as a surprise. Build your cash flow forecast on the rates you know today, updating it on 28 October once the actual Finance Bill is published.
This is exactly the territory our tax planning work and our VAT returns service are built for: turning a week of headlines into a plan you can act on once the real numbers land.
What is still uncertain, and when we'll know
BBC's report is clear that none of the four options is confirmed, and gives no indication of which, if any, will actually appear in the Budget on 28 October 2026. The Office for Budget Responsibility publishes its forecast alongside the Budget, usually the first point at which the real figures become public, replacing this week's speculation. Until then, every number in this piece beyond gov.uk's own published rates describes what is under discussion. Nothing described here has been decided.