Autumn Budget 2026 – What it means for your business

/Published:30th October 2026/inNews, Running a business
Accounting Wise - autumn budget 2026 - what it means for your business

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The Chancellor, John Healey, delivered the Autumn Budget 2026 on Wednesday 28 October, his first since taking office. If you were braced for a tax raid on business, the headline is a relief. The rates of income tax, National Insurance, VAT, Corporation Tax and dividend tax have not gone up. The detail underneath tells a different story, though, and most of it starts between January 2027 and April 2029.

This post is written for UK limited company directors, sole traders, landlords and employers. It covers what has changed, what has stayed the same, when each measure starts, the compliance obligations and penalties to be aware of, and what you can do now to plan ahead.

A quick note before we start: most of the measures below are announced, not yet law. They will be legislated through Finance Bill 2026-27, and some are still out to consultation, so the detail can change. Where that applies, we have said so. The full Treasury publication is available on GOV.UK, and the Office for Budget Responsibility has published its updated forecast on the OBR website.

What did not change in the Autumn Budget 2026?

For many owner-managed businesses, what stayed the same is the most important part of this Budget. The following all remain where they are:

  • Income tax: 20%, 40% and 45% on earnings in England, Wales and Northern Ireland. The £12,570 Personal Allowance and £50,270 higher rate threshold stay frozen until April 2031. Scottish rates are set separately by the Scottish Parliament. See our income tax rates and allowances page for the full bands.
  • Dividend tax: 10.75%, 35.75% and 39.35%, with a £500 dividend allowance. The two point rise took effect in April 2026 and has not moved again. Our UK dividend tax guide explains how it is calculated, and you can check the current rates on GOV.UK.
  • Corporation Tax: 19% on profits up to £50,000 and 25% on profits over £250,000, with marginal relief in between. Our Corporation Tax rates page sets out how marginal relief works.
  • Employer National Insurance: 15%, with the Employment Allowance held at £10,500. Current thresholds are on our National Insurance rates page.
  • Capital Gains Tax: 18% and 24%, with a £3,000 annual exempt amount.
  • VAT: a 20% standard rate and a £90,000 registration threshold. See our VAT rates page for reduced and zero rates.
  • Annual Investment Allowance: still £1 million, and full expensing for companies stays at 100%.

Your Companies House obligations are also unaffected. Annual accounts and confirmation statement deadlines work exactly as before, and you can check yours on the Companies House pages of GOV.UK.

Key Autumn Budget 2026 dates for your diary

  • 1 January 2027: the main rate first-year allowance rises from 40% to 50%.
  • 31 January 2027: Self Assessment filing and payment deadline for the 2025/26 tax year.
  • 1 April 2027: National Living Wage rises to £13.21, business rates relief widens in England and the main pool writing-down allowance falls to 12% for Corporation Tax.
  • 6 April 2027: new property and savings income tax rates, Business Asset Disposal Relief limit cut to £500,000, Trading Allowance rises to £3,000, Making Tax Digital for Income Tax widens to £30,000 and company car, van and medical benefits move onto payroll.
  • 1 July 2027: the 5p fuel duty cut ends.
  • October 2027: online marketplaces begin collecting VAT on certain sales by UK businesses.
  • April 2028: Making Tax Digital widens to £20,000 and new rules on taxing company distributions are due.
  • April 2029: Direct Debit required for VAT and PAYE, and more regular in-year Self Assessment payments are planned.

What the Budget means for limited company directors

Capital allowances: a 50% first-year allowance

From 1 January 2027, the first-year allowance on new and unused main rate plant and machinery rises from 40% to 50%. Cars and second-hand assets do not qualify. At the same time, the writing-down allowance on the main pool falls from 14% to 12%, from 1 April 2027 for Corporation Tax and 6 April 2027 for Income Tax. If you are new to how these reliefs fit together, our guide to what capital allowances are is a good starting point.

In practice, this will not change much for most of our clients. Limited companies can already claim 100% full expensing on new main rate plant and machinery, and every business has the £1 million Annual Investment Allowance. The 50% allowance mainly helps unincorporated businesses spending above £1 million and companies buying assets to lease out. The lower writing-down allowance will, however, slow relief on the balance left in your main pool, so expect slightly smaller claims on older assets. Our capital allowances rates page will be updated as the changes take effect.

Our advice is simple: do not buy equipment you do not need just to claim tax relief. Spending £1 to save a fraction of it in tax is never a good deal.

Business Asset Disposal Relief halves to £500,000

This is the change company owners will notice most. For qualifying disposals on or after 6 April 2027, the lifetime limit for Business Asset Disposal Relief falls from £1 million to £500,000. The 18% rate stays the same, but gains above the new limit are taxed at the standard Capital Gains Tax rates. Our Capital Gains Tax guide for small businesses explains how gains and reliefs are calculated.

Here is a worked example for a director selling a qualifying business with an £800,000 gain, paying Capital Gains Tax at the higher rate and ignoring the annual exempt amount and other reliefs:

  • Sold before 6 April 2027: £800,000 at 18% = £144,000
  • Sold on or after 6 April 2027: £500,000 at 18% (£90,000) plus £300,000 at 24% (£72,000) = £162,000

That is £18,000 more tax on the same sale. Special provisions apply to contracts entered into before 6 April 2027 that have not completed, so if a sale is already under negotiation, speak to your accountant now. That said, do not rush a sale purely to beat the deadline. The commercial terms of a deal matter far more than the timing of a relief.

Founders’ Relief and employee share schemes

The Budget also announced a new Founders’ Relief, a proposed 10% Capital Gains Tax rate on up to £10 million of lifetime gains for qualifying founders of high-growth, innovative companies. It is intended to apply to disposals from 6 April 2027, but the technical consultation runs until 30 November 2026 and eligibility will be tightly defined. Most small trading companies are unlikely to qualify, so please do not plan around it yet.

For businesses using share options to reward staff, the Company Share Option Plan is being expanded and rebranded as EMI2. From 6 April 2027, the individual option limit doubles from £60,000 to £120,000 and the exercise period extends from 10 to 15 years.

Taking profits out of your company from April 2028

The government intends to reform how distributions to shareholders are taxed from April 2028. The stated aim is to stop accumulated profits being extracted under Capital Gains Tax rules where dividend tax would otherwise apply, while protecting capital treatment for genuine changes of ownership. Draft legislation is due in 2027.

There is nothing to act on yet, but this is one to watch if your company holds significant retained earnings, or if you are thinking about closing your limited company through a members’ voluntary liquidation, a share buyback or a restructure. Take advice before making any large withdrawal.

Smaller changes for companies

  • The Claim Notification Form for R&D relief is removed for claims made on or after 1 April 2027. Our guide on accounting for R&D tax credits covers how claims flow through your accounts.
  • From 1 April 2027, the VAT reverse charge on services bought from overseas suppliers will only apply where the UK business receiving them is VAT registered.
  • Proposed additional reporting requirements for close companies will not be introduced for now.

What the Budget means for landlords

Landlords are the clear losers from this Budget. From 6 April 2027, income tax on property income in England, Wales and Northern Ireland rises to:

  • Basic rate: 24% (currently 20%)
  • Higher rate: 44% (currently 40%)
  • Additional rate: 49% (currently 45%)

The previous Budget had already legislated a two point rise for April 2027. This Budget adds two more points on top. Savings income will be taxed at the same rates across the whole UK, although only interest above your Personal Savings Allowance and starting rate band is affected.

To put that into numbers, a landlord with £20,000 of rental profit taxed at the higher rate pays £8,000 in 2026/27. In 2027/28, the same profit at 44% costs £8,800. That is £800 more for exactly the same rent. Our tax guide for landlords covers the allowable expenses that can reduce your taxable profit.

Some landlords will now look at moving property into a limited company. Be careful. Incorporation can trigger Capital Gains Tax on rental properties and Stamp Duty Land Tax, and the profit extraction reform due in April 2028 could change how you are taxed when drawing money out of a company. Model the numbers properly before you decide anything. In many cases, reviewing how ownership is split between spouses or civil partners is a simpler first step.

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What the Budget means for sole traders and the self-employed

Making Tax Digital for Income Tax widens in April 2027

Making Tax Digital for Income Tax (MTD) has applied to sole traders and landlords with qualifying income above £50,000 since 6 April 2026. The Budget confirmed the next stages without changing them:

  • From 6 April 2027: qualifying income above £30,000, based on your 2025/26 tax return
  • From 6 April 2028: qualifying income above £20,000, based on your 2026/27 tax return

The point that catches people out is that qualifying income is your gross income before expenses, and it combines self-employment and property income. A sole trader with £22,000 of turnover and £9,000 of rent has £31,000 of qualifying income and must join in April 2027, even if their profit is a fraction of that figure. We explain how this works in more detail in our guides to Making Tax Digital for sole traders and Making Tax Digital for landlords.

Once you are in MTD, you must keep digital records using HMRC-recognised software, send a quarterly update every three months and submit a final tax return by 31 January after the end of the tax year. Our round-up of Making Tax Digital compliant software can help you choose, and HMRC’s own guidance on when you need to use Making Tax Digital for Income Tax confirms your start date.

Trading Allowance triples to £3,000

From 6 April 2027, the Trading Allowance rises from £1,000 to £3,000, and the Self Assessment reporting threshold for trading income rises with it. If your gross self-employment or side income is under £3,000, you will generally not need to report it. If it is higher, you can deduct either the £3,000 allowance or your actual allowable expenses, but not both. If your costs are low, the allowance may give you a better result, so it is worth comparing each year. Our pages on property and trading allowances and Self Assessment for side hustles explain the rules, and HMRC’s guidance on tax-free allowances on property and trading income sets out the current position.

Mileage, fuel and payments on account

  • The 55p per mile rate for the first 10,000 business miles in a car or van is now permanent. You can work out your claim with our mileage expenses calculator.
  • From 6 April 2027, the rate for miles above 10,000 rises from 25p to 35p.
  • The 5p fuel duty cut continues until 1 July 2027, after which fuel costs are expected to rise.
  • From April 2029, the government plans to replace the two large payments on account with smaller, more regular payments through the year. The design is still to be consulted on.
  • Self-employed fathers, partners and adopters are due to become eligible for two weeks of parental support worth up to £194 a week, which is expected from April 2029.

What the Budget means for employers

National Living Wage and National Minimum Wage

From 1 April 2027, the main pay rates rise by 3.9%:

  • National Living Wage (21 and over): £13.21 an hour, up from £12.71
  • 18 to 20 year olds: £11.27 an hour, up from £10.85
  • 16 and 17 year olds and apprentices: £8.31 an hour

Employer National Insurance has not changed, so the extra cost is the pay rise and its knock-on effects. For one employee aged 21 or over working 30 hours a week, the 50p rise adds £780 a year in wages, plus £117 in employer National Insurance if they earn above the secondary threshold, plus any extra auto-enrolment pension contributions. Multiply that across your team and add it to your cash flow forecast now. Our minimum wage rates page and GOV.UK both list the current rates.

Payrolling benefits in kind

From 6 April 2027, company cars, vans, car and van fuel and medical benefits must be reported through payroll rather than on P11D forms. This is a year later than originally planned. Most other benefits follow from April 2028. Talk to your payroll provider early, as you will need to calculate the taxable value of each benefit in kind and process it through your monthly RTI submissions. Our guide to payroll and PAYE for your limited company covers the basics.

Business rates, VAT and HMRC collection changes

Business rates relief in England

From 1 April 2027, the rateable value limit for 100% Small Business Rates Relief on qualifying retail, hospitality and leisure properties in England rises from £12,000 to £18,000, with tapered relief extended up to £21,000. The government estimates that around 70,000 more businesses will pay no business rates as a result. Pubs, social clubs and live music venues also see their relief rise from 15% to 35%, although venues with a rateable value of £1 million or more are excluded from the increase. If you run a café, bar or restaurant, our accountants for restaurants and hospitality can help you make sure you are claiming the right relief.

You can check your property’s rateable value using the find business rates service on GOV.UK. These changes apply in England only, as Scotland, Wales and Northern Ireland set their own business rates.

VAT on online marketplace sales

From October 2027, online marketplaces will collect VAT on sales made by UK VAT-registered businesses and other UK businesses selling more than £90,000 a year through a single platform. Some of the detail, including the final threshold and start date, will be set by secondary legislation in 2027. If you sell through Amazon, eBay, Etsy or similar platforms, check what this means for your pricing, margins and VAT returns. Our guides on tax for eBay stores and common ecommerce accounting mistakes are worth a read before the change lands.

Direct Debit for VAT and PAYE

From April 2029, businesses will need a Direct Debit in place for VAT and PAYE liabilities. You can still pay by other methods before the due date, but HMRC will be able to collect any outstanding balance automatically. HMRC is also recruiting an additional 670 compliance officers by 2029/30, so the quality of your bookkeeping and supporting records will matter more than ever. Our article on common bookkeeping mistakes for small businesses highlights the issues that most often trigger HMRC questions.

Penalties and compliance risks to be aware of

None of the Budget changes alter your existing deadlines, and the usual penalties still apply if you miss them:

  • Self Assessment: a £100 penalty for a return filed after 31 January, even if no tax is due, with further penalties the longer it remains outstanding. Interest also runs on late paid tax. Read why the 31 January tax deadline is crucial, and check the official Self Assessment deadlines on GOV.UK.
  • Making Tax Digital: late submissions build up penalty points. For quarterly updates, reaching four points triggers a £200 penalty. Anyone joining in April 2027 will not receive points for late quarterly updates during 2027/28, but the updates must still be sent before you can file your final return, and the rules on late filing of the return and late payment are not relaxed. Our guide to common MTD mistakes shows where people most often go wrong.
  • Payroll: paying staff below the National Minimum Wage can lead to arrears, penalties and public naming by the government, even where the underpayment is accidental.

Most of the Autumn Budget 2026 changes are planning jobs rather than emergencies. The businesses that handle them best are the ones that spread the work over the next few months instead of leaving everything until April.

Your Autumn Budget 2026 action plan

  1. Check your Making Tax Digital position. Add up your gross self-employment and property income on your 2025/26 return. If it is over £30,000, choose your software and get your records digital before April 2027.
  2. Review your salary and dividend mix. Rates are not changing, so focus on your reserves, the £500 dividend allowance and where your income falls within the tax bands. Our guide to structuring dividends and salaries walks through the options.
  3. Base equipment purchases on genuine need. For most small businesses, the timing around 1 January 2027 makes little or no difference.
  4. Landlords, model 2027/28 at 24%, 44% and 49%. Look at ownership splits before considering incorporation.
  5. If you are thinking of selling your business, speak to your accountant before 6 April 2027.
  6. Update your payroll budget for the £13.21 National Living Wage and ask your provider how they will handle payrolled benefits.
  7. Refresh your forecasts. Our guides to financial forecasting and small business cash flow can help you build the 2027 changes into your numbers.
  8. Check your rateable value if you run a shop, café, salon, gym or pub in England.
  9. Keep your records tidy, especially mileage logs and online sales figures.

Autumn Budget 2026 FAQs

Did the Autumn Budget 2026 increase income tax, National Insurance or VAT?

No. The headline rates of income tax, National Insurance and VAT were not increased, and Corporation Tax and dividend tax rates are also unchanged. Income tax thresholds remain frozen until April 2031. The main tax rises fall on property and savings income from April 2027.

Is dividend tax going up again?

No. Dividend tax stays at 10.75%, 35.75% and 39.35% following the April 2026 increase. A separate reform of how company distributions are taxed is planned from April 2028, but draft legislation has not been published yet.

When do I need to join Making Tax Digital for Income Tax?

If your qualifying income, meaning gross self-employment and property income before expenses, was over £30,000 on your 2025/26 return, you must join from 6 April 2027. If it was over £20,000 on your 2026/27 return, you join from 6 April 2028. Our guide on whether you need to register for Making Tax Digital explains the process.

Are the Autumn Budget 2026 changes law yet?

Not yet. Most measures will be legislated through Finance Bill 2026-27, and some, such as Founders’ Relief and the 2028 distributions reform, are still being consulted on or drafted. Details can change before they become law.

Should I sell my business before April 2027?

Only if it makes commercial sense. The Business Asset Disposal Relief limit halves from 6 April 2027, which could increase the tax on a larger sale, but rushing a deal can cost far more than the relief is worth. Take advice early and plan the timing carefully.a

Autumn Budget 2026 Conclusions

The Autumn Budget 2026 will not change your tax bill overnight. Headline rates held, dividend tax stayed put and Corporation Tax is unchanged. The real changes arrive in 2027: higher tax for landlords, a smaller Business Asset Disposal Relief limit for business sellers, Making Tax Digital reaching far more sole traders and landlords, and another rise in wage costs for employers. Further out, the 2028 distributions reform and the 2029 changes to how tax is collected will reshape how many businesses manage their cash flow.

The best response is to work out which changes apply to you, put the dates in your diary and start planning now. At Accounting Wise, our tax accountants help limited companies, sole traders, landlords and employers across the UK turn Budget announcements into practical plans. If you would like us to work through the numbers for your business, get in touch with our team.

This article is general information based on the Autumn Budget 2026 announcements of 28 October 2026 and is not personal tax advice. Announced measures may change when Finance Bill 2026-27 is published. Please speak to a qualified accountant about your own circumstances.

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