Autumn 2026 Budget Update: Key Changes and Implications

A breakdown of the Autumn 2026 Budget highlights and what they mean for UK businesses and taxpayers.

# Autumn Budget 2026 — what it means for you and your business

Budget 2026 combines support for households and high street businesses with higher taxes on certain income and changes to business reliefs. Although headline tax rates on earnings, National Insurance and VAT remain unchanged, many clients will still see their tax position change.

Here are the main announcements affecting business owners, employers, landlords and individuals.

## Higher tax on rental income and savings

From **6 April 2027**, property income tax rates in England, Wales and Northern Ireland will be **24%, 44% and 49%**. The same rates will apply to savings income across the UK.

This Budget adds two percentage points to the increases already announced for April 2027. Landlords should review their expected tax bills and cash flow. These personal income tax rates do not automatically apply to rental profits earned through a limited company.

The **cash ISA annual subscription limit remains £20,000**, reversing the planned reduction. Existing savings allowances continue, so the impact depends on how much taxable interest you receive.

## Business sales and succession planning

The lifetime gains limit for **Business Asset Disposal Relief falls from £1 million to £500,000** for disposals from **6 April 2027**. The qualifying CGT rate remains 18%.

A separate **Founders’ Relief** is planned from the same date, offering a 10% CGT rate on up to £10 million of lifetime gains for qualifying founders of high-growth, innovative companies. Eligibility remains subject to detailed rules and consultation.

Changes to company distributions are also planned from **April 2028**, potentially affecting profit extraction, share buybacks and restructures. The government intends to protect capital treatment for genuine changes in ownership, including family succession.

If you are considering selling, retiring or reorganising your business, seek advice before agreeing the transaction.

## Capital allowances and smaller businesses

The main rate first-year allowance increases from **40% to 50%** for qualifying expenditure from **1 January 2027**.

However, the main writing-down allowance falls from **14% to 12%** from April 2027. Full expensing remains available under its existing conditions. The effect will depend on the assets purchased and which relief applies.

The **Trading Allowance rises from £1,000 to £3,000 from 6 April 2027**, increasing the amount of qualifying trading and miscellaneous income individuals can receive tax-free.

## Payroll and employee benefits

From **1 April 2027**, minimum hourly pay increases to:

- **£13.21** for the National Living Wage. - **£11.27** for workers aged 18–20. - **£8.31** for workers aged 16–17 and eligible apprentices.

Employers should update payroll budgets, including the effect on pay differentials and associated employment costs.

The Budget also confirms mandatory payrolling of company cars, vans, fuel and medical benefits from **6 April 2027**, followed by remaining benefits from **6 April 2028**.

From **April 2029**, parental allowance support will extend to eligible self-employed fathers, partners and adopters.

## Business rates support

From **1 April 2027**, qualifying retail, hospitality and leisure properties in England will benefit from:

- Full Small Business Rates Relief up to **£18,000 rateable value**, with tapered relief extending to **£21,000**. - **35% relief** for qualifying pubs, social clubs and most live music venues. - A cap on qualifying bill increases at CPI inflation for **2027–28 and 2028–29**, subject to exceptions.

The last measure is a real-terms freeze, meaning cash bills can still increase. Eligibility must be checked for each property.

Vape shops and Adult Gaming Centres lose specified business rates reliefs from April 2027.

## VAT and online selling

From **October 2027**, online marketplaces will take responsibility for collecting VAT on relevant sales by UK VAT-registered businesses and other UK businesses reaching the **£90,000 annual sales threshold per platform**. Personal sales, second-hand goods and business-to-business transactions are excluded from the announced extension.

From **April 2027**, overseas suppliers providing services to non-VAT-registered UK businesses will generally need to account for VAT rather than relying on the reverse charge. This could increase costs for affected small businesses.

Mandatory **VAT e-invoicing starts on 1 April 2029**, with technical requirements still to follow. Businesses should consider this when choosing or updating accounting software.

## Making Tax Digital and tax payments

Taxpayers joining **Making Tax Digital for Income Tax in April 2027** will receive relief from late-submission penalty points for their first four quarterly updates. Reporting and payment obligations still apply.

From **April 2029**, Self Assessment taxpayers already making payments on account will move to more regular in-year payments. VAT and PAYE taxpayers will also need direct debit instructions, although other payment methods remain possible before a specified cut-off.

HMRC is increasing compliance resources and plans additional debt recovery powers. Accurate records and regular tax provisioning will become increasingly important.

## Mileage, vehicles and energy costs

The **55p rate for the first 10,000 qualifying business miles** in an employee’s or self-employed person’s own car or van is made permanent, applying from **6 April 2026**. The rate above 10,000 miles rises to **35p from 6 April 2027**.

The 5p fuel duty cut and temporary zero VAT rate on domestic electricity are extended to **1 July 2027**. Eligible households in council tax bands A–D in England will receive a **£100 energy payment from January 2027**.

Public and workplace EV charging remains subject to **20% VAT**, while the previously announced mileage-based EV duty remains planned from April 2028. Company car tax percentages will also rise in 2030–31.

Eligible energy-intensive manufacturers may qualify for electricity support from April 2027.

## Pensions, savings and property planning

A **Pension Tax Allowance** from **6 April 2027 to 5 April 2030** will protect eligible pensioners with total income at or below the full new State Pension from small income tax liabilities, with tapered support just above that level.

The existing Triple Lock continues through April 2029, followed by a revised mechanism from April 2030.

For first-time buyers, qualifying Lifetime ISA withdrawals for properties above £450,000 attract a reduced **20% withdrawal charge from 29 October 2026**. A new First Time Buyer ISA is planned for April 2029, alongside England’s Your First Home equity-loan scheme starting in April 2027.

Clients with high-value homes, trusts or company-owned residential property should also review the surcharge, inheritance tax and property tax measures relevant to their circumstances.

## Support for growing businesses

R&D claim administration is being simplified from April 2027. Employee share schemes also become more flexible, including an increase in the individual CSOP option limit from **£60,000 to £120,000**, with the scheme renamed EMI2.

Additional British Business Bank capacity and expanded export finance may provide opportunities for qualifying businesses seeking investment or funding.

## How Cutts & Co can help

The priorities are to review your expected tax liabilities, payroll costs, capital purchases, business sale plans and cash flow before the relevant deadlines.

**Contact Cutts & Co to discuss how the Budget affects you and agree the next steps for your business or personal tax affairs.**

*Based on HM Treasury’s Budget published on 28 October 2026. Some measures remain subject to legislation, consultation or detailed guidance. This article provides general information; individual advice should be obtained before taking action.*