The new Chancellor of the Exchequer, John Healey, delivered the Autumn Budget 2026 amid rising energy costs, global uncertainty and growing financial pressure on households and businesses. The government outlined measures aimed at easing the cost of living while encouraging business investment and economic growth across the UK. Although the headline rates of Income Tax on employment earnings, National Insurance contributions and VAT remained unchanged, the Budget announced several targeted tax reforms and measures to support individuals and businesses.

This guide examines the key announcements from the Autumn Budget 2026, including changes to business rates, Capital Gains Tax reliefs, capital allowances, property income, savings and pensions. It also explains when these measures are expected to take effect and how they could affect employers, business owners and individuals. For a comparison with the previous year’s announcements, read our Autumn Budget 2025 summary. 

Table of Contents

Autumn Budget 2026: Impact on Businesses

Business Rates

The Autumn Budget 2026 announced further business rates support for qualifying retail, hospitality and leisure (RHL) properties in England from 1 April 2027. The rateable value threshold for 100% Small Business Rates Relief will increase from £12,000 to £18,000, while the upper threshold for tapered relief will rise from £15,000 to £21,000. The government estimates that these changes will exempt around 70,000 additional high-street businesses from paying business rates.

To provide further support, increases in business rates bills for qualifying RHL properties will be capped at CPI inflation during 2027/28 and 2028/29, subject to certain exceptions. Relief for pubs, social clubs and most live music venues will also increase from 15% to 35% from April 2027. However, eligibility will depend on the type of business and its circumstances, rather than rateable value alone.

From April 2027, vape shops in England will lose eligibility for Small Business Rates Relief and the reduced RHL multipliers, while adult gaming centres will no longer qualify for the reduced RHL multipliers. The government also outlined plans for local and regional authorities to retain 100% of business rates income by the end of the decade. This forms part of its wider fiscal devolution strategy and will not immediately affect the business rates payable by individual businesses.

Increased Bank Corporation Tax Surcharge

The Bank Corporation Tax Surcharge will temporarily increase from 3% to 6% between 1 January 2027 and 31 March 2028, a period of 15 months. The government has stated that the additional revenue will help fund household energy support, including the new £100 payment for eligible households.

This increase applies to banking companies within the surcharge regime, not ordinary limited companies. The main rate of Corporation Tax remains at 25%, while the small profits rate remains at 19%. If you need additional guidance on your business reporting obligations, get in touch with DS Burge & Co’s Corporation Tax Return service.

Business Asset Disposal Relief (BADR)

From 6 April 2027, the lifetime limit of gains eligible for Business Asset Disposal Relief (BADR) will be reduced from £1 million to £500,000. BADR currently allows eligible individuals to pay Capital Gains Tax at 18% on qualifying business disposals, including shares in their personal trading company, provided the relevant conditions are met.

The reduction in the lifetime limit could have significant tax implications for business owners planning to sell their business or retire. For example, an individual making a qualifying gain of £800,000, with their full lifetime allowance available, would only benefit from BADR on the first £500,000. The remaining £300,000 would be subject to the standard Capital Gains Tax rates, potentially increasing their overall tax liability.

Despite the reduction, the government estimates that around three-quarters of BADR claimants will continue to receive relief on their entire gain. However, transitional rules affecting certain contracts and share reorganisations could influence the tax treatment of disposals around April 2027. Business owners considering a sale should therefore review their plans and seek professional advice to understand how the changes may affect their tax position. If you are considering a business sale, speak to one of DS Burge & Co’s expert advisors for business tax advice today.

Entrepreneur Allowances

The Budget also introduced several measures designed to help entrepreneurs establish and grow their companies:

  • Founders’ Relief: From 6 April 2027, a proposed new relief will apply a 10% Capital Gains Tax rate to up to £10 million of lifetime gains on qualifying disposals involving founders and early investors in high-growth, innovative UK companies. The detailed eligibility rules remain subject to a technical consultation, closing on 30 November 2026 basically no-one is going to qualify so I think this should be taken out.
  • Trading Allowance: The allowance for qualifying trading and miscellaneous income will increase from £1,000 to £3,000 from 6 April 2027. The associated Self-Assessment reporting threshold will also increase to £3,000, potentially reducing administration for individuals earning smaller amounts from trading activities. Other income or circumstances may still require a tax return.
  • Young Entrepreneurs Allowance: The government will pilot support towards living costs for successful applicants during the first year of a new business in England. Detailed application and eligibility arrangements have yet to be confirmed.
  • Support for women founders: A new scale-up women’s programme will test approaches to improving access to funding and investment networks, alongside practical support for growing businesses.

The new Founders’ Relief and reduced BADR limit will operate under different eligibility conditions. Entrepreneurs considering an eventual sale should therefore assess which relief may apply before relying on the headline rates.

Capital Allowances Changes

The Autumn Budget 2026 announced changes to the tax relief businesses can claim when purchasing machinery and equipment. From 1 January 2027, the main rate First-Year Allowance (FYA) will increase from 40% to 50%. This means qualifying businesses can deduct a larger proportion of the purchase cost from their taxable profits in the first year.

However, the main rate Writing-Down Allowance (WDA) will decrease from 14% to 12% from 1 April 2027 for Corporation Tax and 6 April 2027 for Income Tax. Unlike an FYA, a WDA allows businesses to claim tax deductions gradually over several years rather than immediately.

In practice, these changes mean businesses may receive greater tax relief in the year they purchase qualifying assets, but smaller annual deductions on expenditure carried forward. Companies eligible for the existing full expensing scheme can still deduct 100% of the cost of qualifying plant and machinery in the year of purchase.

The most beneficial approach will depend on the business, the assets purchased and the available reliefs. Further details are available in HMRC’s Budget 2026 tax legislation overview. For more information on how businesses account for asset purchases, read our guide on capitalising versus expensing a purchase.

Enterprise Management Incentives

From 6 April 2027, the Company Share Option Plan (CSOP) will be renamed Enterprise Management Incentives 2 (EMI2). The individual option limit will double from £60,000 to £120,000, while the exercise period will increase to 15 years. The existing restrictions on how CSOP options interact with Enterprise Management Incentives (EMI) option limits will also be removed.

EMI2 will sit alongside, rather than replace, the existing EMI scheme. The government will also simplify the notification process for EMI options granted from 6 April 2027, with grants reported through annual returns instead of separate notifications. Companies using share options to recruit and retain staff should review their scheme arrangements before introducing new awards.

Online Marketplace VAT

From October 2027, the government plans to extend VAT collection responsibilities for online marketplaces to qualifying sales by UK-based businesses. The change will apply to UK VAT-registered businesses and other UK businesses reaching a proposed £90,000 annual sales threshold on an individual platform.

The rules will exclude personal sales, second-hand goods and business-to-business transactions. Some implementation details, including the threshold and commencement arrangements, will be finalised through secondary legislation. Sellers will need to understand whether the marketplace or the seller accounts for VAT on each transaction to avoid incorrect returns or duplicate accounting.

For support with your online business and to understand whether you are required to collect VAT, get in touch with our VAT Returns service.

Motoring and Transport: Business Impact

The Budget confirmed that the tax-free mileage rate of 55p per mile for the first 10,000 qualifying business miles, introduced in April 2026, will become permanent. From 6 April 2027, the rate above 10,000 business miles will increase from 25p to 35p per mile. These rates apply to approved mileage payments for employees using their own cars or vans and corresponding simplified mileage claims for eligible self-employed people.

British Industrial Competitiveness Scheme

The British Industrial Competitiveness Scheme will reduce electricity bills by around 20% to 25% for eligible energy-intensive manufacturers in Great Britain from April 2027. The government expects more than 10,000 firms to benefit, including through an additional payment in 2027 reflecting support for 2026/27.

Research and Development Tax Relief

In addition, the requirement to submit a separate R&D tax relief Claim Notification Form is scheduled to be removed for claims made on or after 1 April 2027, with the Additional Information Form to be simplified from autumn 2027. These changes may reduce paperwork, but companies will still need evidence to support their qualifying expenditure.

Autumn Budget 2026: Impact on Individuals

Tax on Property and Savings Income

The Chancellor did not announce an increase to the headline rates of Income Tax charged on employment earnings, or to the main National Insurance contributions and VAT rates. No further change to dividend tax rates was announced in this Budget. However, tax on income from certain assets will rise.

From 6 April 2027, the government will increase the rates applied to property income and interest earned from savings over the Personal Savings Allowance by a further two percent, taking the new rates to:

  • Basic rate: 24%.
  • Higher rate: 44%.
  • Additional rate: 49%.

The savings rates will apply across the UK, while the specified property income rates will apply in England, Wales and Northern Ireland, subject to the devolved arrangements explained by HMRC. These increases are in addition to the 2% rise announced in Autumn Budget 2025.

For landlords, higher tax rates may reduce the income retained from a rental property, even where rent and allowable expenses remain unchanged. An individual with £10,000 of taxable property profits wholly within the new 24% rate would face £2,400 of Income Tax on those profits, before considering their wider circumstances and any applicable reliefs. For support as a landlord, DS Burge & Co provides specialist accountancy services for landlords.

National Living and Minimum Wage Changes

From 1 April 2027, the National Living Wage and National Minimum Wage rates will increase by 3.9%. The new hourly rates are:

  • Aged 21 and over (National Living Wage): £13.21.
  • Aged 18 to 20: £11.27.
  • Aged 16 to 17 and eligible apprentices: £8.31.

The accommodation offset will also rise to £11.53 per day. HM Treasury estimates that the increase will provide around £910 more gross annual pay for a full-time employee on the National Living Wage.

For employers, these increases affect payroll costs and may also influence pension contributions, holiday pay and internal pay structures. Businesses should review their budgets and employment records ahead of April. 

Household Energy Costs

A central Budget announcement was a new £100 Household Energy Payment for up to 20 million households in England in Council Tax bands A to D. Payments are expected to begin from January 2027 and will be delivered through the council tax system, with funding of approximately £2.6 billion. Devolved governments will receive corresponding funding to determine their own support arrangements.

The temporary reduction in VAT on domestic electricity from 5% to 0%, introduced in October 2026, will also be extended until July 2027. The government estimates that the extension could reduce the annual Ofgem price cap by around £50 in April 2027, although individual savings will depend on electricity consumption and prices.

The government has additionally asked Ofgem to abolish domestic gas standing charges, aiming to implement the change by the end of 2027 or as soon as possible afterwards. The underlying costs would instead be recovered through gas unit rates, so the effect will vary between households. This is a proposed reform, not an immediate removal of standing charges.

ISA Allowance

The government confirmed that adults will retain the ability to put up to £20,000 into Cash ISAs from April 2027, rather than introducing a lower Cash ISA limit. This is not an additional allowance on top of the overall annual ISA limit: the total amount subscribed across eligible adult ISAs remains subject to the applicable £20,000 annual limit.

The Treasury will also work with the investment industry on a potential incentive for people investing in a Stocks and Shares ISA for the first time. No eligibility criteria, contribution rules or launch date have yet been confirmed.

Although Cash ISA savings are tax-free, the proposed higher tax rates on savings income outside ISAs from April 2027 could make it increasingly important for savers to review how they use available allowances.

First Time Buyer ISA

A new First Time Buyer ISA is planned from April 2029, replacing the Lifetime ISA (LISA) for new savers. The planned account will allow contributions of up to £4,000 a year, with a 25% government bonus on the qualifying account balance when funds are withdrawn to purchase a first home costing no more than £450,000. The government has said the maximum bonus will be £20,000. Existing LISA holders will be able to continue contributing and using their accounts under the current rules.

From 29 October 2026, the LISA withdrawal charge will reduce from 25% to 20% where a first-time buyer uses the money to purchase a property above the £450,000 cap. The charge for other unauthorised withdrawals will remain 25%.

Your First Home Scheme

The Budget also confirmed a separate £4.7 billion Your First Home equity-loan scheme in England. Its announced terms include:

  • Government equity loan: 20% of the purchase price for eligible first-time buyers.
  • Deposit: A minimum of 2.5%, with a maximum of 15%.
  • Interest: No interest charged on the equity loan for the first five years, followed by a gradual increase.
  • Household income caps: £110,000 outside London and £140,000 in London, alongside local property price caps.

Pre-registration is expected by the end of December 2026, with applications opening from February 2027 and the first loans scheduled for April 2027. Eligibility and property restrictions should be checked before making a purchase commitment.

Pensions

The government confirmed that the existing State Pension Triple Lock will continue through this Parliament. From April 2030, however, it plans to adjust the formula so annual increases are based on the highest of 2.5%, inflation or the amount needed to maintain the pension’s value relative to earnings at its April 2029 level. This is a future change and does not alter State Pension uprating immediately.

The Budget confirmed the introduction of the Pension Tax Allowance, originally announced in 2025, from 6 April 2027. The allowance is designed to prevent pensioners whose total income does not exceed the value of the full new State Pension from having to pay small amounts of Income Tax as the State Pension rises above the standard Personal Allowance. It is planned for the 2027/28, 2028/29 and 2029/30 tax years, with the benefit tapered for those on higher incomes.

The government also set out plans for a National Care Service in England offering personal care free at the point of use. The proposed approach forms part of longer-term adult social care reforms, rather than a service that is already in operation.

Inheritance Tax

The Budget announced technical changes to Inheritance Tax rules governing liabilities linked to trust property. The proposed legislation will clarify when legitimate trustee liabilities can reduce the value of settled property and extend restrictions designed to prevent avoidance. The measures are intended to apply to deaths and other chargeable events from 28 October 2026.

There were also further implementation details concerning the previously announced inclusion of most unused pension funds and death benefits within estates for Inheritance Tax from 6 April 2027. These include provisions intended to help personal representatives arrange payment of the relevant tax through pension administrators.

Capital Gains Tax

There was no broad change to the main Capital Gains Tax rates. From 28 October 2026, an administrative easement will apply to certain trusts that become a UK resident and then cease to be UK resident in the same or following tax year. Changes to late-filing penalties for UK residential property disposal returns will also stop penalties continuing to accrue once the disposal is reported through Self-Assessment. The original property reporting obligation remains.

Fuel Duty

The government extended the temporary 5p-per-litre fuel duty reduction and the associated freeze until 1 July 2027. This delays the previously planned duty increase and provides some short-term protection from higher motoring costs. Reforms to the Motability scheme, including restrictions on certain tax advantages, were also highlighted in the wider welfare measures.

Additional Household and Welfare Measures

Other announcements affecting individuals and families include:

  • Parental allowance: From April 2029, eligible self-employed fathers, partners and adopters in Great Britain are expected to gain access to a new paid parental allowance, with support also extending to some people with irregular recent employment histories.
  • Carer’s Allowance: The government plans to replace the current earnings-limit cliff edge with a taper in 2030/31 in England and Wales, so crossing the weekly earnings threshold does not immediately remove the entire benefit.
  • Food tariffs: Import tariffs on more than 100 additional food products will be suspended from 26 November 2026 until the end of 2028, including selected everyday supermarket goods. Actual retail savings will depend on how importers and retailers pass through lower costs.
  • Welfare reform: Further changes to health and disability benefits are being developed following independent reviews. The Budget sets out the direction of travel, but not all proposed reforms have finalised rules or commencement dates.

Conclusion

The Autumn Budget 2026 combines targeted household support with changes that could have a lasting effect on business investment, company ownership, property income and personal finances. While the headline rates of tax on employment income, National Insurance contributions and VAT have not increased, measures scheduled for 2027 and beyond could alter the tax position of entrepreneurs, landlords, and employers.

With different implementation dates and some proposals still subject to legislation or consultation, it is important to understand which changes apply to your circumstances and plan accordingly.

At DS Burge & Co, our specialist accountants can help business owners and individuals understand the tax implications, review upcoming obligations and plan. To discuss how the Autumn Budget 2026 may affect you or your business, get in touch with our team of Wimbledon accountants.