Published: 29 October 2026 | By Accounting People
The UK Autumn Budget 2026 has officially been announced, bringing a series of tax changes and financial measures that could affect millions of households, business owners, landlords and self-employed individuals.
On 28 October 2026, Chancellor John Healey delivered the Autumn Budget, setting out the government’s plans to ease financial pressures, encourage business investment and reform parts of the UK tax system.
While the government has confirmed that the headline rates of Income Tax, National Insurance and VAT will remain unchanged, other announcements could have a significant impact on how much tax people pay and how businesses manage their finances.
Among the key developments are higher tax rates on property and savings income, an increase in the Trading Allowance, changes to business mileage relief, new incentives for entrepreneurs and reforms affecting Making Tax Digital.
Some measures are already effective, while others are scheduled for implementation between 2027 and 2029, subject to the necessary legislation.
At Accounting People, we’ve broken down the key announcements, explained what they mean and highlighted what businesses and taxpayers should consider next.
Autumn Budget 2026 Summary: Key Tax Changes at a Glance
The UK Autumn Budget 2026, announced on 28 October 2026, introduced several important changes affecting businesses, self-employed individuals, landlords and taxpayers. While headline Income Tax, National Insurance and VAT rates remain unchanged, the Budget includes higher taxes on property and savings income, increased wage rates and changes to business tax reliefs.
Here is a summary of the key Autumn Budget 2026 announcements:
| Tax or policy area | Key announcement | When does it apply? |
|---|---|---|
| Income Tax, NI and VAT | No general increase to headline rates | No new headline-rate increase |
| Trading Allowance | Increasing from £1,000 to £3,000 | 6 April 2027 |
| National Living Wage | Increasing to £13.21 per hour for workers aged 21 and over | 1 April 2027 |
| Property Income Tax | Rates increasing to 24%, 44% and 49% | 6 April 2027 |
| Savings Income Tax | Rates increasing to 24%, 44% and 49% | 6 April 2027 |
| Cash ISA | £20,000 annual cash ISA subscription limit retained | Existing limit retained |
| Business mileage | 55p for the first 10,000 miles; 35p thereafter | 55p from April 2026; 35p from April 2027 |
| Capital Gains Tax | New 10% Founders’ Relief for qualifying company founders | Planned from April 2027 |
| Business Asset Disposal Relief | Lifetime gains limit reducing to £500,000 | Planned from April 2027 |
| Business rates | Expanded relief for qualifying businesses in England | April 2027 |
| R&D tax relief | Claim Notification Form to be removed | April 2027 |
| Making Tax Digital | Penalty easement and deferrals for certain groups | From April 2027 |
| VAT e-invoicing | Mandatory electronic VAT invoicing planned | April 2029 |
What does the Autumn Budget 2026 mean for you?
For small businesses, the Budget brings changes to payroll costs, business rates, capital allowances and tax administration.
For self-employed individuals, the increased Trading Allowance and changes to Making Tax Digital may affect tax reporting and record-keeping requirements.
For landlords, the proposed higher property income tax rates could increase the tax payable on rental profits from April 2027.
For company directors and entrepreneurs, changes to Capital Gains Tax reliefs, R&D administration and business investment allowances could influence future financial planning.
For individual taxpayers and savers, the higher savings income tax rates and retained cash ISA allowance are particularly relevant.
Many of these measures are subject to legislation or further guidance. Understanding which changes apply to your circumstances, and when, is an important part of effective tax planning.
1. Income Tax, National Insurance and VAT: No Headline Rate Increases
One of the key announcements was the government’s decision not to increase the headline rates of Income Tax, National Insurance contributions or VAT.
For employees, employers and businesses, this provides some certainty around these major tax rates.
However, unchanged headline rates do not necessarily mean that everyone’s tax bill will remain the same.
Changes to the taxation of savings and property income, alongside existing allowances, thresholds and individual circumstances, could still affect the total amount of tax payable.
For example, people receiving income from employment, rental properties and savings may be affected differently from those whose income comes entirely from employment.
What this means for you: Replace with:
Rather than focusing solely on headline tax rates, consider your overall financial position, particularly if you receive income from multiple sources. Our tax services can help you understand your obligations and plan effectively.
2. Trading Allowance Increasing from £1,000 to £3,000
The government has announced that the Income Tax Trading Allowance will increase from £1,000 to £3,000 from 6 April 2027.
The change is intended to support people starting small businesses, earning income from side ventures or undertaking occasional freelance work.
The Trading Allowance provides relief for qualifying trading and certain miscellaneous income.
Under the proposed rules, individuals with qualifying gross income of up to £3,000 may be able to receive that income without paying Income Tax on it.
However, it is important to understand that the allowance is not an additional £3,000 tax-free amount available on top of every business’s profits.
Where income exceeds the allowance, eligible taxpayers may generally choose between deducting the Trading Allowance and claiming their actual allowable business expenses, subject to the applicable rules.
The government has also announced an increase in the associated trading-income Self Assessment reporting threshold to £3,000. However, other filing, registration or National Insurance obligations may still apply depending on individual circumstances.
What does this mean for side hustlers and freelancers?
This change could benefit people earning income through freelance services, online trading, consulting and other small business activities.
For example, someone with qualifying annual gross trading income of £2,500 may be able to benefit from the increased allowance from April 2027, provided they meet the relevant conditions.
What this means for you: If you earn additional income outside your main employment, review whether the increased Trading Allowance could reduce your tax liability. It is also worth comparing the allowance against your actual deductible business expenses.
3. National Living Wage Increasing to £13.21
Employers will need to prepare for another increase in the National Living Wage and National Minimum Wage.
From 1 April 2027, the announced hourly rates will be:
| Age category | Hourly rate |
|---|---|
| Workers aged 21 and over | £13.21 |
| Workers aged 18–20 | £11.27 |
| Workers aged 16–17 | £8.31 |
| Eligible apprentices | £8.31 |
The National Living Wage for workers aged 21 and over will increase by 3.9%.
While the increase is intended to support lower-paid workers, it will also raise payroll costs for employers.
Businesses operating in labour-intensive sectors, particularly hospitality, retail and personal services, may experience a noticeable impact.
The actual increase in employment costs could extend beyond gross wages because employer National Insurance contributions and workplace pension contributions may also be affected.
What this means for businesses: Review your payroll forecasts, employee contracts and staffing budgets ahead of April 2027. Our payroll services can help businesses manage PAYE, employee payments and payroll compliance. Businesses operating with tight profit margins should also consider whether their pricing and financial forecasts remain sustainable.
4. Landlords Face Higher Property Income Tax Rates
The Autumn Budget 2026 introduces further increases to the Income Tax rates applicable to property income.
The Autumn Budget 2025 had already announced a two-percentage-point increase from April 2027. The 2026 Budget adds another two percentage points, bringing the planned rates to:
| Property Income Tax band | Rate from 6 April 2027 |
|---|---|
| Basic rate | 24% |
| Higher rate | 44% |
| Additional rate | 49% |
These rates are planned to apply in England, Wales and Northern Ireland.
For landlords, the changes could mean paying more Income Tax on rental profits, potentially reducing the amount of rental income retained after tax.
The impact will depend on several factors, including total taxable income, allowable property expenses, mortgage finance-cost relief and property ownership arrangements.
It is also important to distinguish individually owned rental properties from properties held through limited companies, which are subject to a different tax framework.
What should landlords consider?
Landlords may need to reassess their expected rental profits, tax liabilities and future cash flow.
Those with substantial rental income or additional earnings may be particularly affected.
What this means for landlords: Review your property income forecasts before April 2027. Our specialist accountants for landlords can help you understand the tax implications of these changes. Understanding the tax consequences of your existing ownership structure can help you make informed decisions, although changing ownership can itself create significant tax and legal consequences.
5. Savings Income Tax Rates Will Also Increase
The government has also announced higher Income Tax rates on taxable savings income from 6 April 2027.
The proposed rates are:
| Savings Income Tax band | Rate |
|---|---|
| Basic rate | 24% |
| Higher rate | 44% |
| Additional rate | 49% |
The rates will apply across the UK.
As with property income, the 2026 announcement adds a further two-percentage-point increase to the changes previously announced in 2025.
However, not all savings interest will automatically be taxable.
Existing tax reliefs and exemptions, including the Personal Savings Allowance and applicable starting rate for savings, can still affect whether tax is payable.
The amount of savings income an individual can receive tax-free will depend on their broader financial circumstances.
What this means for savers: Review your expected savings interest and whether you are making appropriate use of tax-efficient savings arrangements.
6. Cash ISA Allowance Remains at £20,000
The government has confirmed that the annual cash Individual Savings Account (ISA) subscription limit will remain at £20,000, reversing its previously announced plan to reduce the limit.
This means eligible savers will continue to have access to the existing cash ISA subscription limit under the applicable rules.
Interest earned within a qualifying cash ISA remains free from Income Tax.
The government has also announced plans to explore a new incentive for individuals investing in a stocks and shares ISA for the first time, although the details have not yet been finalised.
What this means for you: With higher savings tax rates planned from April 2027, tax-efficient savings arrangements may become increasingly relevant. The appropriate approach will depend on your financial objectives, access requirements and personal circumstances.
7. Business Mileage Rates: Important Changes for Employees and the Self-Employed
The government has confirmed changes to the approved mileage rates for qualifying business travel undertaken in employees’ and self-employed individuals’ own cars and vans.
The key changes are:
| Qualifying business mileage | Rate | Effective date |
|---|---|---|
| First 10,000 miles | 55p per mile | 6 April 2026 |
| Above 10,000 miles | 35p per mile | 6 April 2027 |
The 55p rate for the first 10,000 miles was introduced temporarily earlier in 2026 and has now been made permanent.
The rate for qualifying mileage above 10,000 miles will increase from 25p to 35p from April 2027.
These rates relate to qualifying business journeys rather than personal travel or ordinary commuting.
For employees, the rates can affect approved mileage reimbursements and Mileage Allowance Relief.
For self-employed individuals, mileage-based deductions remain subject to the relevant tax rules, including the choice between simplified mileage expenses and actual vehicle costs where applicable.
What this means for you: Maintain accurate mileage records and make sure your business expenses or employee reimbursement policies reflect the correct rates and implementation dates.
8. Business Rates Relief Expanded for High Street Businesses
The Autumn Budget 2026 includes additional business rates support for qualifying retail, hospitality and leisure businesses in England.
From 1 April 2027, the government plans to increase the Small Business Rates Relief thresholds for eligible properties.
The full-relief threshold will rise from a rateable value of £12,000 to £18,000, while the upper threshold for tapered relief will increase from £15,000 to £21,000.
The government has also announced a two-year real-terms freeze on business rates bills for qualifying retail, hospitality and leisure properties, subject to the detailed rules and exceptions.
Additional relief is also planned for eligible pubs, social clubs and live music venues.
These measures could benefit independent retailers, cafés, restaurants, pubs, salons and other eligible high street businesses.
However, relief will depend on the property’s circumstances, rateable value and the relevant eligibility rules.
What this means for businesses: Check your property’s rateable value and review your eligibility for available business rates relief before April 2027. Businesses outside England should consult the relevant devolved business rates arrangements.
9. Capital Allowances: Changes to Business Investment Relief
The government has announced changes to capital allowances, which determine how businesses can obtain tax relief for qualifying expenditure on certain assets.
The main announcements include:
- Increasing the main-rate first-year allowance to 50% for qualifying expenditure incurred on or after 1 January 2027.
- Reducing the main-rate writing-down allowance to 12% from 1 April 2027 for Corporation Tax and 6 April 2027 for Income Tax.
The changes could affect how quickly businesses obtain tax relief on qualifying investment.
However, not every asset or business will automatically qualify for the new first-year allowance.
The availability of relief will depend on the nature of the expenditure and how the new rules interact with existing capital allowances, including the Annual Investment Allowance and full expensing.
What this means for businesses: If you are planning significant investment in machinery, equipment or other business assets, consider the timing of the expenditure and obtain advice on the available capital allowances before committing to a purchase.
10. New Capital Gains Tax Founders’ Relief
One of the important announcements for entrepreneurs and business founders is the introduction of a new Capital Gains Tax (CGT) Founders’ Relief.
From 6 April 2027, the government plans to introduce a reduced 10% Capital Gains Tax rate on up to £10 million of lifetime gains for qualifying founders of high-growth, innovative companies.
The measure is intended to encourage entrepreneurs to build and grow businesses in the UK.
However, it is important to understand that this relief will not automatically apply to every business owner or company shareholder.
The government has launched a technical consultation on the detailed design, meaning the qualifying conditions and practical application require further clarification.
The new relief should also be distinguished from the existing Business Asset Disposal Relief regime.
Changes to Business Asset Disposal Relief
Separately, the Budget announces that the Business Asset Disposal Relief lifetime gains limit will reduce to £500,000 from 6 April 2027.
This is potentially significant for business owners considering a future disposal or succession.
What this means for business owners: If you are considering selling your business, transferring shares or planning an exit, reviewing the applicable CGT reliefs before making decisions could be particularly important. Our Capital Gains Tax accountants can help you assess your tax position. Eligibility, timing and transaction structure can materially affect the outcome.
11. Employee Share Schemes: More Support for Growing Businesses
The government has announced changes to tax-advantaged employee share schemes to help companies attract and retain employees.
From 6 April 2027, the Company Share Option Plan (CSOP) will be expanded and rebranded as EMI2.
The main changes include:
- Increasing the individual option limit from £60,000 to £120,000.
- Extending the exercise period from 10 to 15 years.
- Removing the interaction with the existing Enterprise Management Incentives option limit, subject to the detailed rules.
For qualifying growing businesses, employee share schemes can provide an alternative way to reward and retain key employees.
However, the tax advantages depend on satisfying the relevant eligibility, valuation and administrative requirements.
What this means for businesses: Companies considering employee share incentives should review whether the expanded rules provide additional opportunities, while ensuring any scheme is properly structured and compliant.
12. R&D Tax Relief Claims to Become Simpler
The Autumn Budget includes changes intended to simplify the administration of Research and Development (R&D) tax relief claims.
The government plans to remove the R&D Claim Notification Form from 1 April 2027.
It also intends to simplify the Additional Information Form from autumn 2027.
These changes are intended to reduce administrative burdens and make the claims process more straightforward for eligible businesses.
However, the removal of the Claim Notification Form does not mean businesses can claim R&D tax relief without demonstrating that they meet the relevant conditions.
Companies will still need to establish that their activities and expenditure qualify, maintain appropriate supporting evidence and comply with the applicable claim procedures.
What this means for businesses: If your company invests in scientific or technological innovation, review whether your activities could qualify for R&D relief. Our accountants for technology businesses can provide support with accounting, compliance and relevant tax considerations. Appropriate records and technical documentation remain essential.
13. Making Tax Digital: New Penalty Relief and Deferrals
Making Tax Digital (MTD) for Income Tax remains an important part of HMRC’s digital transformation programme.
The Autumn Budget 2026 announces additional support for taxpayers entering the system in April 2027.
Under the announced measures, taxpayers joining MTD for Income Tax in April 2027 will not receive late-submission penalty points for their first four quarterly updates for the 2027/28 tax year.
The government has also announced deferrals for several taxpayer groups until further notice.
However, these changes do not mean that Making Tax Digital has been cancelled.
The penalty easement is specifically related to late-submission penalty points for qualifying quarterly updates. It does not remove the underlying requirements to maintain digital records, make required submissions or pay tax when due.
What should self-employed individuals and landlords do?
Taxpayers should establish whether they fall within the MTD rollout timetable or one of the deferred categories. For further guidance, read our Making Tax Digital for Income Tax guide
Those who remain within the programme should continue preparing their record-keeping processes and accounting software.
What this means for you: Do not assume that the penalty easement removes your reporting obligations. Confirm your MTD start date and ensure your bookkeeping systems are suitable. Our Making Tax Digital accountants can help you prepare for digital record-keeping and reporting requirements.
14. VAT Changes: Electronic Invoicing and Online Marketplaces
The government is continuing to modernise VAT administration and reporting.
Mandatory VAT e-invoicing from April 2029
From 1 April 2029, the government plans to require VAT invoices to be issued in a specified electronic format.
Businesses using existing invoicing or accounting systems may need to ensure that their software can accommodate the new requirements. Our cloud accountancy services can help businesses maintain accurate digital financial records.
The detailed technical rules and implementation arrangements will be important in determining how businesses must comply.
New VAT responsibilities for online marketplaces
The government also plans to extend online marketplace VAT liability rules to UK businesses from 1 October 2027.
Under the announced framework, online marketplaces will become responsible for collecting VAT on certain sales by UK VAT-registered businesses and other UK business sellers meeting a minimum annual sales threshold of £90,000 per platform.
The government has indicated that personal sales, second-hand goods and business-to-business transactions will be excluded from the measure.
The exact application will depend on the detailed legislation and guidance.
What this means for businesses: Online sellers should review how VAT is currently managed through the platforms they use. Businesses more generally should also monitor the forthcoming electronic invoicing requirements.
15. Self Assessment Tax Payments to Change from 2029
The government intends to reform the existing Self Assessment Payments on Account system from April 2029.
Under the current framework, qualifying taxpayers make advance payments towards their tax liabilities.
The proposed changes will require affected taxpayers who already make payments on account to make smaller, more frequent contributions towards their annual tax bill.
The government says the aim is to bring tax payments closer to the time income is earned and reduce the financial pressure of large, less frequent payments.
Further details will be needed before the full practical implications can be assessed.
What this means for self-employed individuals and landlords: Regular cash-flow forecasting and setting aside money for tax liabilities will become even more important. Taxpayers should monitor further HMRC guidance before changing their payment arrangements.
16. VAT and PAYE Direct Debit Requirements from 2029
The Autumn Budget also announces new requirements relating to the payment of VAT and PAYE liabilities.
The government plans to introduce direct debit arrangements for VAT return liabilities from 1 April 2029 and PAYE return liabilities from 6 April 2029.
The detailed implementation rules, including the circumstances in which alternative payment methods will remain available, will determine the practical effect on businesses.
For employers and VAT-registered businesses, these changes reinforce the importance of maintaining sufficient funds to meet tax liabilities when they become due.
What this means for businesses: Review your tax payment processes, cash-flow forecasts and bookkeeping systems in preparation for future payment administration changes.
17. HMRC Compliance and Tax Debt Recovery
The government has announced further investment in HMRC’s compliance activities.
This includes plans to recruit an additional 670 HMRC compliance officers by 2029/30, building on existing recruitment commitments.
The Budget also proposes new powers from July 2029 allowing HMRC to recover certain lower-value tax debts through instalments from bank accounts where taxpayers can afford to pay but repeatedly fail to do so.
The proposed measures will require appropriate legislative safeguards and implementation arrangements.
For businesses and individuals, accurate record-keeping and timely communication with HMRC will remain essential.
What this means for you: If you have outstanding tax liabilities or concerns about previous submissions, addressing them promptly can help reduce the risk of additional penalties, interest or enforcement action.
18. Energy Bills, Fuel Duty and Cost-of-Living Support
Beyond taxation, the Autumn Budget introduces several measures intended to support households and businesses facing high living and operating costs.
Electricity VAT reduction
The government has extended the temporary reduction in VAT on qualifying domestic electricity supplies from 5% to 0% until 1 July 2027 in Great Britain, with separate arrangements for Northern Ireland.
£100 Household Energy Payment
Eligible households in England in council tax bands A–D are expected to receive a £100 Household Energy Payment from January 2027.
The devolved governments will receive corresponding funding, although household support arrangements may differ.
Fuel duty freeze
The government has extended the temporary 5p-per-litre fuel duty cut and freeze until 1 July 2027.
Gas standing charges
The government also plans to abolish domestic gas standing charges as part of longer-term energy market reforms.
However, removing a standing charge does not necessarily mean the same amount will disappear from the overall cost of energy, as suppliers may recover associated costs through unit charges.
What this means for households and businesses: These measures may provide financial support, although the actual benefit will depend on eligibility, energy usage, tariffs and individual circumstances.
What Should Businesses and Taxpayers Do Following the Autumn Budget 2026?
The Autumn Budget introduces both opportunities and additional responsibilities. Although many measures will not take effect immediately, preparing in advance can help businesses and individuals manage their finances more effectively.
For small business owners
Review your payroll forecasts, operating costs, capital investment plans and eligibility for business rates relief.
Businesses should also monitor forthcoming changes to VAT administration, tax payments and digital invoicing.
For self-employed individuals
Consider whether the increased Trading Allowance could benefit you and review your record-keeping obligations under Making Tax Digital. Our guide to Making Tax Digital for the self-employed explains the reporting requirements in greater detail.
If you use your own vehicle for qualifying business journeys, ensure you apply the correct mileage rates.
For landlords
Assess how the proposed higher property income tax rates may affect your rental profits and future cash flow.
Landlords should also confirm their Making Tax Digital obligations and consider whether their existing bookkeeping systems are adequate.
For company directors and entrepreneurs
Review the planned changes to capital allowances, R&D tax relief, Capital Gains Tax reliefs and employee share schemes.
If you are considering selling your business or making significant investments, the timing and structure of your decisions may have important tax consequences.
For individuals and savers
Review your savings income, tax allowances and ISA arrangements, particularly ahead of the planned increase in savings tax rates from April 2027.
How Accounting People Can Help
The Autumn Budget 2026 introduces changes that could affect how businesses and individuals manage their taxes, investments and financial responsibilities.
While some measures may create opportunities for tax planning, others could increase costs or introduce new compliance requirements.
At Accounting People, we understand that keeping up with changing tax rules can be overwhelming, especially when you are already busy running a business or managing your personal finances.
Our team supports UK businesses, company directors, landlords and individuals with a wide range of accounting and tax services, including tax planning, bookkeeping, payroll, Making Tax Digital, R&D tax relief and ongoing compliance.
We focus on making complex financial matters easier to understand, helping you stay informed, meet your obligations and make confident financial decisions.
Not sure how the Autumn Budget 2026 affects you?
Get in touch with Accounting People to discuss your circumstances and find out how we can help you prepare for the changes ahead.
Frequently Asked Questions About the Autumn Budget 2026
When was the Autumn Budget 2026 announced?
The UK Autumn Budget 2026 was delivered by Chancellor John Healey on Wednesday, 28 October 2026.
Did Income Tax increase in the Autumn Budget 2026?
The government did not increase the headline rates of Income Tax on earnings. However, it announced further increases to the tax rates on savings and property income from 6 April 2027.
What is the new Trading Allowance for 2027?
The government has announced that the Trading Allowance will increase from £1,000 to £3,000 from 6 April 2027. Eligibility and the appropriate method of claiming relief will depend on individual circumstances.
How will the Autumn Budget affect landlords?
The announced property income tax rates from April 2027 are 24%, 44% and 49% in England, Wales and Northern Ireland. This could increase the tax payable on rental profits, depending on each landlord’s circumstances.
Has Making Tax Digital been cancelled?
No. The Budget introduces a penalty easement for certain taxpayers entering MTD in April 2027 and defers implementation for some taxpayer groups. The wider Making Tax Digital programme continues.
What are the new business mileage rates?
The approved car and van mileage rate for the first 10,000 qualifying business miles is 55p per mile, effective from 6 April 2026. The rate above 10,000 miles will increase to 35p from 6 April 2027.
What is the new Capital Gains Tax Founders’ Relief?
The government plans to introduce a reduced 10% Capital Gains Tax rate on up to £10 million of lifetime gains for qualifying founders of high-growth, innovative companies from 6 April 2027. The detailed eligibility conditions remain subject to consultation and legislation.
Will Corporation Tax increase in 2027?
The Autumn Budget does not announce a general increase in the headline Corporation Tax rate. However, it introduces changes to capital allowances and a temporary increase in the separate Bank Corporation Tax Surcharge.
When will mandatory VAT e-invoicing begin?
The government plans to introduce mandatory VAT invoicing in a specified electronic format from 1 April 2029, subject to the detailed implementation rules.
Are all Autumn Budget 2026 measures already law?
No. Some announcements relate to measures already effective, while others require Finance Bill legislation, secondary legislation, consultations or further implementation guidance. Businesses and taxpayers should confirm the applicable rules before relying on future changes.
Official Sources and References
This article is based primarily on UK government publications released alongside the Autumn Budget 2026:
- HM Treasury (2026). Budget 2026 – Full Government Document.
- HM Treasury (2026). Budget 2026 Speech.
- HM Treasury (2026). Budget 2026: Breathing Space for Today, Hope for the Future.
Disclaimer: This article provides general information based on announcements made in the UK Autumn Budget 2026 and official government publications available as at 29 October 2026. Certain measures remain subject to legislation, consultation and implementation guidance. Tax treatment depends on individual circumstances. This article does not constitute personalised tax, legal or financial advice.
