The Chancellor delivered the Autumn Budget on 28 October 2026. For most owner-managed businesses the headline is relief: income tax rates, the frozen thresholds, employer National Insurance and dividend tax rates were all left unchanged. The pressure comes in the detail — higher tax on savings and property income, a smaller Business Asset Disposal Relief limit, and several changes with firm start dates in 2027.
This is the overview. Three follow-up guides go deeper on savings and property income, company directors and small businesses, and selling a business.
What was not changed
A lot of the planning you may already have done still stands.
- Income tax rates stay at 20%, 40% and 45%. The Personal Allowance (£12,570) and basic rate limit (£37,700) remain frozen until 5 April 2031.
- Dividend tax rates are unchanged at 10.75%, 35.75% and 39.35%, with the £500 Dividend Allowance retained.
- Employer National Insurance stays at 15%.
- Corporation Tax stays at 25% main rate and 19% small profits rate.
- VAT registration threshold stays at £90,000.
The changes that matter, with dates
| Measure | What changes | From |
|---|---|---|
| First-year allowance (main rate) | 40% rises to 50% | Spend from 1 Jan 2027 |
| Writing-down allowance (main pool) | 14% falls to 12% | 1 Apr 2027 (Corporation Tax) / 6 Apr 2027 (Income Tax) |
| Savings and property income tax | Rates rise by 2 points to 24% / 44% / 49% | 6 Apr 2027 |
| Business Asset Disposal Relief | Lifetime limit halves from £1m to £500,000 | Disposals from 6 Apr 2027 |
| Founders' Relief (proposed) | New 10% CGT rate on up to £10m of gains, for qualifying scale-ups | Disposals from 6 Apr 2027 |
| Trading allowance | £1,000 rises to £3,000 | 6 Apr 2027 |
| Mileage rate above 10,000 miles | 25p rises to 35p | 6 Apr 2027 |
| Making Tax Digital for Income Tax | Threshold of £30,000 (2025/26 income), then £20,000 (2026/27 income) | 6 Apr 2027 / 6 Apr 2028 |
| Payrolling of benefits | Company cars, vans, fuel and medical benefits must be payrolled; most others follow | 6 Apr 2027 / 6 Apr 2028 |
| National Living Wage | £13.21 an hour | 1 Apr 2027 |
| Company distributions | Reform of how distributions and capital repayments are taxed | April 2028 |
Savings and property income
Tax on savings and property income rises by two percentage points from 6 April 2027, to 24% for basic-rate, 44% for higher-rate and 49% for additional-rate taxpayers. Combined with the increase announced at the previous Budget, that is four points in total compared with today. If you are a landlord or hold significant cash outside an ISA, this is the measure most likely to cost you money. We cover it in detail in our savings and property income guide.
Directors and small businesses
Because dividend rates did not move, the salary-versus-dividends balance is largely where it was. The change to watch is capital allowances: the main-rate first-year allowance rises to 50% for spending from 1 January 2027, while the main-pool writing-down allowance falls to 12%. The Annual Investment Allowance stays at £1 million and full expensing is maintained, so for many limited companies the practical impact is modest. The government has also confirmed it will not proceed with new reporting requirements for close companies.
Distributions reform is a 2028 story, not a 2026 one. The government plans to modernise how company distributions and capital repayments are taxed from April 2028, with draft legislation expected in 2027. There is no detail yet, so avoid restructuring on the strength of speculation.
Sole traders and landlords
The trading allowance rises to £3,000 from 6 April 2027, which also lifts the point at which trading income must be reported on Self Assessment. Business mileage above 10,000 miles a year increases from 25p to 35p a mile, including the simplified rate for the self-employed.
Making Tax Digital for Income Tax is already in force for qualifying income over £50,000. It extends to income over £30,000 from 6 April 2027 (judged on 2025/26 income) and over £20,000 from 6 April 2028 (judged on 2026/27 income). Quarterly updates are due by 7 August, 7 November, 7 February and 7 May. If you are near either threshold, read our guide to MTD rules and deadlines.
Selling a business
Business Asset Disposal Relief (BADR) keeps its 18% rate, but the lifetime limit on qualifying gains halves from £1 million to £500,000 for disposals on or after 6 April 2027. A proposed Founders' Relief offers a 10% rate on up to £10 million of gains, but only for fast-growing companies meeting demanding conditions. Our BADR and Founders' Relief guide explains who might qualify.
What to do now
- Check whether your savings, rental income or investments sit outside an ISA or pension, and whether the position needs reviewing before April 2027.
- If you plan to sell a company, model the BADR position for a disposal before and after 6 April 2027.
- If you plan to buy equipment, talk to us about timing against the 1 January 2027 first-year allowance change.
- Check which MTD threshold applies to you and whether your software and records are ready.
- Remember that these are announced measures. They become law only when Finance Bill 2026-27 is passed, and some, such as Founders' Relief, are still out for consultation.
For the pre-Budget picture, see our earlier piece on what to expect from the Autumn Budget 2026.
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Get in TouchThis article is for general information purposes and does not constitute tax advice. The measures described were announced in the Autumn Budget on 28 October 2026 and remain subject to legislation in Finance Bill 2026-27, so details may change. Always speak to a qualified accountant before acting on them.