Autumn Budget 2026: what it means for your business

Chancellor John Healey delivered his first Budget on 28 October 2026. It was a steady Budget rather than a dramatic one: no rise in the main rates of Corporation Tax, income tax, employee National Insurance, VAT or dividend tax. But there are real changes for owner-managed businesses, landlords and anyone thinking about selling a company, and most of them start on 6 April 2027.

Below we set out each change in the same way: what has changed, why it matters, and what to do about it.

What's changed: nothing on the headline rates. Corporation Tax stays at 25%, with the 19% small profits rate confirmed through to April 2029. Dividend tax stays at 10.75% and 35.75% for basic and higher rate taxpayers (the rates that started in April 2026) and 39.35% for additional rate taxpayers. Capital Gains Tax main rates stay at 18% and 24%. The VAT registration threshold stays at £90,000, and income tax and National Insurance thresholds remain frozen until April 2031.

Why it matters: several rumoured changes did not happen. There was no move to align Capital Gains Tax with income tax rates, no further rise in dividend tax and no change to the Capital Gains Tax uplift on death. No decision has yet been announced on the proposed new reporting regime for payments between close companies and their shareholders.

What to do: if you held off on a decision in case the Budget changed things, such as a dividend timing or an asset sale, you can now plan on the current rates. Frozen thresholds still mean more of your income is taxed at higher rates each year as pay rises, so it is worth reviewing your salary and dividend mix for 2027/28.

What's changed: from 6 April 2027, property income and savings income get their own tax rates of 24% (basic), 44% (higher) and 49% (additional). The 2025 Budget had already set these at 22%, 42% and 47%; this Budget adds a further two points. The property rates apply in England, Wales and Northern Ireland, and Scotland and Wales can set their own.

Why it matters: this hits individuals who own rental property in their own name and anyone with significant interest income. It also catches a common owner-manager arrangement: if you lend money to your own company and charge it interest, that interest is savings income and will be taxed at the higher rates.

A worked example: a higher-rate taxpayer with £20,000 of rental profit pays £8,000 of income tax on it in 2026/27. At the new 44% rate, the same profit costs £8,800 in 2027/28, an extra £800 a year. A basic-rate landlord with £10,000 of profit pays £400 more.

What to do:

• Model your 2027/28 tax bill now. The extra tax first falls due in the balancing payment on 31 January 2029, and your payments on account go up from then on, so plan the cash early.
• If you charge your company interest on a director's loan, review whether that still makes sense against taking salary or dividends.
• Moving rental property into a company can reduce income tax but usually triggers Stamp Duty Land Tax and Capital Gains Tax on the transfer. Get advice on the numbers before acting.

What's changed: the lifetime limit for Business Asset Disposal Relief (BADR) falls from £1 million to £500,000 for disposals on or after 6 April 2027. The BADR rate stays at 18%. There are special rules for contracts signed before 6 April 2027 that complete afterwards.

Alongside this, a new Founders' Relief will charge Capital Gains Tax at 10% on up to £10 million of lifetime gains for founders and significant early investors in high-growth, innovative companies, from 6 April 2027. The conditions are still being consulted on until 30 November 2026, and early commentary suggests they will be demanding, with tests on growth, size and innovation. Any BADR or Investors' Relief claimed from 6 April 2027 counts against the £10 million limit.

Why it matters: BADR saves 6% compared with the 24% main rate, so the cut costs a seller up to £30,000. On a £1 million gain, a sale before 6 April 2027 could cost £180,000 in tax with full BADR. The same sale afterwards costs £210,000: £500,000 at 18% and £500,000 at 24%.

Most owner-managed businesses will not meet the Founders' Relief tests. It is aimed at fast-growing, investor-backed companies, so do not plan an exit around it until the final conditions are published.

What to do:

• If you are already talking to buyers, check with us whether completing before 6 April 2027 is realistic and worthwhile.
• Do not rush a sale just to beat the deadline. A worse deal or a poor buyer can cost far more than £30,000.
• If you run a growing company that has raised investment, keep an eye on the Founders' Relief conditions when they are finalised. Our founder support team can help you check eligibility.

What's changed: the main rate first-year allowance for plant and machinery rises from 40% to 50% for spending on or after 1 January 2027. The main rate writing-down allowance drops from 14% to 12% from 1 April 2027 for companies and 6 April 2027 for unincorporated businesses.

Why it matters: most small businesses already get full relief on equipment through the £1 million Annual Investment Allowance, and companies can claim full expensing on new main-rate assets. The changes matter most for sole traders and partnerships spending above the Annual Investment Allowance, and for assets that do not qualify for it, such as many cars. Those now get tax relief more slowly.

What to do: if you plan to buy a car or other asset that only qualifies for writing-down allowances, factor in the slower relief when comparing buying with leasing. For larger equipment purchases, talk to us about timing so you get the best allowance available.

What's changed:

• The National Living Wage for workers aged 21 and over rises by 3.9% from £12.71 to £13.21 an hour on 1 April 2027. The rate for 18 to 20-year-olds rises to £11.27.
• From 6 April 2027, employers must report and pay tax on company cars, vans, car and van fuel, and medical insurance through payroll each month instead of on a year-end P11D. Most other benefits follow from 6 April 2028.
• The tax-free mileage rate for business miles above 10,000 a year rises from 25p to 35p from 6 April 2027. The first 10,000 miles stay at 55p, the rate since April 2026. This applies to employees and to self-employed people using simplified mileage.
• From 6 April 2028, the standard rates for reimbursing staff meals on business trips without receipts will be £20 for over 5 hours, £60 for over 10 hours and £75 for over 24 hours.
• From April 2028, employees will no longer need to file a Self Assessment return just to claim tax relief on work expenses they pay themselves. The £2,500 threshold goes and claims move through PAYE.
• Employer National Insurance is unchanged at 15%. The £2,000 cap on National Insurance-free salary sacrifice pension contributions, announced last year, still starts in April 2029.

Why it matters: a full-time employee working 37.5 hours a week on the National Living Wage will cost around £975 more a year in pay, plus around £146 in employer National Insurance. If you pay above the minimum to keep a gap between roles, those rates will come under pressure too.

What to do:

• Build the April 2027 increase into your budget and cash flow forecast now.
• If you provide company cars or medical cover, make sure your payroll software can handle payrolled benefits before April 2027. Our payroll team can set this up.
• If you or your team drive more than 10,000 business miles a year, update your mileage policy for April 2027.

What's changed: in England, from 1 April 2027, qualifying retail, hospitality and leisure properties will get full Small Business Rate Relief up to a rateable value of £18,000 (up from £12,000), tapering to £21,000 (up from £15,000). All other retail, hospitality and leisure properties will have their bills frozen in real terms for 2027/28 and 2028/29. Pubs, social clubs and most live music venues get an extra 20% cut from April 2027, announced in July. Vape shops lose both the higher Small Business Rate Relief and the lower retail, hospitality and leisure rate, and adult gaming centres lose the lower rate.

Why it matters: the government expects around 70,000 more businesses to pay no business rates. For example, a café with a rateable value of £15,000 pays nothing from April 2027, provided it meets the other Small Business Rate Relief conditions. Offices, workshops and other premises outside these sectors are not covered by the higher threshold.

What to do: check your rateable value on the Valuation Office Agency's business rates service. If you are in retail, hospitality or leisure with a rateable value up to £21,000, confirm with your council that the new relief will be applied from April 2027.

What's changed: the trading allowance triples from £1,000 to £3,000 from 6 April 2027, and you will not need to report trading income below £3,000 on a tax return. Making Tax Digital for Income Tax extends to sole traders and landlords with qualifying income over £30,000 from 6 April 2027, and HMRC has confirmed it will not give late submission penalty points for quarterly updates in that first year.

Why it matters: people testing a new business idea or earning a little on the side can now earn up to £3,000 before tax without paperwork. For everyone joining Making Tax Digital next April, the penalty easement gives breathing space to get used to quarterly updates, but you still have to send them before you can file your tax return.

What to do: if your 2025/26 turnover from self-employment and property combined was over £30,000, get your software set up and test your first quarterly update before April 2027. Our Making Tax Digital guide explains who is in scope and when.

What's changed:

• From 1 April 2027, companies will no longer need to submit a Claim Notification Form before making an R&D claim, and the Additional Information Form will be simplified from autumn 2027.
• From 6 April 2027, the Company Share Option Plan (CSOP) individual limit doubles to £120,000, CSOP options can be exercised for up to 15 years, and the time to exercise EMI options after a disqualifying event extends from 90 to 180 days.
• SEIS and EIS get technical fixes from April 2027, and HMRC will work on improving advance assurance.
• The British Business Bank gets extra capital to support access to finance for smaller firms.

Why it matters: missing the Claim Notification Form deadline has cost many first-time claimants their R&D relief. Its removal takes away one of the most common traps. The share scheme changes make it easier for growing companies to reward key staff with equity.

What to do: if you are planning a first R&D claim, talk to us about timing and records. Our R&D tax relief and SEIS and EIS guides cover the detail. If you are thinking about an EMI or CSOP scheme, the extra flexibility from April 2027 is worth factoring in.

What's changed: from October 2027, online marketplaces will collect and pay the VAT on sales made through them by UK businesses that are VAT registered or sell over a threshold per platform. From April 2027, the VAT reverse charge on services bought from overseas suppliers will only apply to VAT-registered UK businesses.

Why it matters: if you sell through a marketplace, the platform rather than you will account for the VAT on those sales, which changes your VAT returns and how you reconcile platform payouts. If you are not VAT registered and buy services from overseas suppliers, such as software, advertising or freelance work, those suppliers may start adding UK VAT to their invoices.

What to do: marketplace sellers should review how platform reports feed into the books ahead of October 2027. Smaller businesses buying overseas services should check supplier contracts for VAT from April 2027. Our VAT team can help with both.

These measures start later, but they will change how cash leaves your business.

• April 2028: a new legal duty to correct errors in tax returns once you spot them, backed by HMRC Customer Correction Notices. Amended company tax returns must be filed online.
• April 2028: modernised rules on company distributions, aimed at arrangements that extract profits at lower tax rates. Draft legislation follows in 2027. Anyone planning a share buyback, reorganisation or company wind-up should take advice before acting.
• April 2029: Self Assessment taxpayers who make payments on account will move to more regular, automated in-year payments, with the option to pay through PAYE.
• April 2029: businesses will need a Direct Debit in place for VAT and PAYE liabilities, and VAT invoices will need to be issued electronically in a prescribed format.
• 2029/30: HMRC will be able to recover smaller tax debts directly from bank accounts where taxpayers repeatedly fail to engage.

Why it matters: the direction is clear. HMRC wants tax paid closer to when profits are made and collected automatically. That is good for avoiding big January bills, but it leaves less room to use tax money as working capital.

What to do: start setting aside VAT, PAYE and an estimate of your Corporation Tax or personal tax each month in a separate account. Our guide on how much cash a business should keep shows how.

The temporary 5p cut in fuel duty is extended to 30 June 2027, with the delayed inflation increase following from 1 July 2027. Electric Vehicle Excise Duty starts on 1 April 2028 at 3p per mile for battery electric cars and 1.5p for plug-in hybrids. Company car tax rates for 2030/31 rise by 1 percentage point.

For most of the businesses we work with, this Budget brings no immediate shock. The bigger effects land from April 2027: higher wage costs, more tax on rental and interest income, a smaller BADR limit and new payroll obligations. That gives you around five months to plan.

The businesses that come out best will be the ones that run the numbers now rather than next spring. A few hours on your 2027/28 forecast, your extraction strategy and any sale plans can save several thousand pounds.

• GOV.UK: Budget 2026, overview of tax legislation and rates
• GOV.UK: Budget 2026 announcement
• GOV.UK: Founders' Relief technical consultation
• GOV.UK: Business rates package for 2027/28