--- title: "Autumn Budget faces funding gap as windfall tax revenue declines" publisher: "Stockmark.IT" author: "Stockmark.IT Website" published: "2026-10-27T08:02:37+00:00" modified: "2026-10-27T08:02:37+00:00" date: 2026-10-27 canonical: "https://stockmark.it/autumn-budget-predictions-windfall-tax-gap-rosebank/" category: "UK Budget" categories: ["UK Budget", "UK Economy", "UK Government"] image: "https://i0.wp.com/stockmark.it/wp-content/uploads/2026/10/autumn-budget-faces-funding-gap-as-windfall-tax-revenue.png?fit=1536%2C1024&quality=80&ssl=1" format: "news" language: "en-GB" --- # Autumn Budget faces funding gap as windfall tax revenue declines **Published:** October 27, 2026 **Author:** Stockmark.IT Website **Categories:** UK Budget, UK Economy, UK Government **Featured image:** ![Autumn Budget faces funding gap as windfall tax revenue declines](https://i0.wp.com/stockmark.it/wp-content/uploads/2026/10/autumn-budget-faces-funding-gap-as-windfall-tax-revenue.png?fit=1536%2C1024&quality=80&ssl=1) --- The UK government is expected to announce new tax measures in the Autumn Budget this Wednesday, as Chancellor John Healey confronts a significant funding shortfall for Labour’s green prosperity plan. The primary challenge stems from years of declining windfall tax revenue, which has fallen below predictions made in July 2024. This revenue drop raises critical questions about how the government will finance the capitalisation of Great British Energy, the GB Grid initiative, and the £2 billion energy wealth fund announced last week. Despite these pressures, the Chancellor is expected to unveil a new loans scheme under the warm homes plan to help households spread the upfront costs of installing heat pumps, batteries, or solar panels. Energy Secretary Miatta Fahnbulleh stated that these government-supported loans will enable families across the UK to upgrade their homes with no upfront costs, making them warmer and cheaper to run. Her department estimates that the loans could save households £550 a year. However, clarity is still required on how the expanded national company, Great British Energy, will be capitalised. The company was originally designed to be funded by tax receipts from the energy profits levy, with the government pledging to allocate £8.3 billion in 2024. This sum was earmarked to be funded by windfall tax revenue, with the levy raised to 38% and extended over five years to contribute an expected £6 billion. The cabinet is currently divided on the approval of the Rosebank oil field, a joint venture between Shell and Equinor. While Chancellor Healey has advocated for the project citing job creation and tax revenue, Energy Secretary Fahnbulleh is reportedly against the renewed project. Prime Minister Andy Burnham’s cabinet is split on whether Rosebank will be approved, following the recent approval of the Jackdaw project. Despite the Chancellor’s bullish stance, records from Equinor show the Norwegian energy company paid nothing in corporate taxes and royalties to the UK government in 2024 and 2025. Adura, the project co-developer, estimates that both Jackdaw and Rosebank would provide a £4.1 billion boost to tax revenues over the next decade. Green subsidies, including carbon capture, use and storage funding and the boiler upgrade scheme, are expected to face cuts in this week’s Budget. The CCSA has warned that withdrawing support risks stalling projects and putting over £4 billion in supply chain contracts and thousands of jobs at risk. CEO Olivia Powis emphasised that investors need long-term certainty and a clear commitment to the next phase of deployment. Meanwhile, the electric vehicle industry has raised concerns over investor uncertainty regarding the potential dilution of the zero emissions vehicle mandate. The government has announced that VAT will be removed from electricity bills from October, a measure currently funded for only the first six months, while business rate relief is forecast to be widened to help reduce costs for small businesses. Audit firm RSM UK notes that while the downward trend in energy profits levy revenue is expected to reverse due to geopolitical unrest and rising oil prices, this may not be enough to plug the funding hole. HMRC monthly tax revenue from the windfall tax fell 27%, from £952 million in January 2025 to £690 million this year. Sheena McGuinness, RSM UK’s co-head of energy and natural resources, warned that the windfall tax has had a large impact on dwindling North Sea oil production, making it internationally uncompetitive. She added that a rise in revenue only works if businesses remain willing to invest in the UK, as the sector claims the tax is damaging North Sea investment. Fuel duty revenue stemmed a declining trend between April and September, reaping £12.5 billion, higher than in the same period last year. However, the transition to electric vehicles is putting structural pressure on this revenue stream, which now contributes only 2% of UK tax revenue compared to 8% previously. Revenue intake from fuel duty is expected to drop 50% by next decade, creating a £12 billion hole in government coffers. A new excise duty due in April 2028 could help replace lost revenue, with electric car owners paying 3 pence per mile and plug-in hybrids paying 1.5 pence. However, first-year 100% capital allowances for zero-emissions cars and charge points will only run to spring 2027. The zero emissions vehicle mandate is expected to be weakened, with the consultation proposing reducing the target for electric cars from 80% to 50% in 2030. A coalition of 30 climate, transport and health groups has urged ministers not to dilute the mandate, warning that it would damage the economy and lock drivers into expensive fossil fuels for longer. The government has emphasised that new car and van sales must still be zero-emission by 2035, but the UK remains reliant on imported diesel, with 55% of diesel imported last year. Grid infrastructure investment is likely to be another focus of the Budget, as industry seeks backing for GB Grid reforms and demands grid upgrades needed to electrify fleets and broaden EV adoption. --- **Original URL:** https://stockmark.it/autumn-budget-predictions-windfall-tax-gap-rosebank/ *Created by [WP Markdown Endpoint](https://wpmarkdownendpoint.com/)*