What the Budget means for
company directors

If you run a limited company, the best news from the Autumn Budget is what did not happen. Dividend tax rates, Corporation Tax and employer National Insurance were all left unchanged. The measures that do affect you are narrower — but several have fixed start dates in 2027, which makes them worth planning around now.

What stayed the same

Item	Position
Dividend tax rates	10.75% basic, 35.75% higher, 39.35% additional — unchanged
Dividend Allowance	£500 for 2026/27 and 2027/28
Corporation Tax	25% main rate, 19% small profits rate (profits up to £50,000), marginal relief up to £250,000
Employer National Insurance	15%, with the secondary threshold at £96 a week
Employment Allowance	£10,500. A director who is the only employee paying secondary Class 1 NIC cannot claim it
VAT registration threshold	£90,000

That means the balance between salary and dividends is largely where it was. Our guide to salary versus dividends remains the right starting point.

Capital allowances

Two changes to the main-rate allowances take effect in 2027.

• The first-year allowance rises from 40% to 50% for qualifying main-rate expenditure incurred from 1 January 2027.
• The writing-down allowance on the main pool falls from 14% to 12% for chargeable periods beginning on or after 1 April 2027 for Corporation Tax (6 April 2027 for Income Tax). A period that straddles that date gets a blended rate. The special rate pool allowance stays at 6%.

The Annual Investment Allowance stays at £1 million and full expensing is maintained. Because those already give full upfront relief on most new plant and machinery, the new first-year allowance is most useful for businesses and expenditure outside them — the government says it particularly helps unincorporated businesses and businesses leasing out equipment. For a typical limited company buying new equipment, the headline effect is modest. The lower writing-down allowance matters more for businesses carrying large balances in the main pool.

Benefits must be payrolled from April 2027

From 6 April 2027, company cars and vans, car and van fuel, and medical benefits must be reported through payroll rather than at year end. Most other benefits follow from 6 April 2028. If you or your employees receive these benefits, you will need payroll software and processes that can handle them in real time. Directors who run their own payroll should factor this in before the new tax year.

Distributions reform from April 2028

The government plans to modernise how company distributions and capital repayments are taxed from April 2028, with draft legislation expected in 2027. No detail has been published. Until it is, treat any claims about what it will do to dividends and extraction strategies as speculation, and avoid restructuring in advance. The government has separately confirmed it will not proceed with new reporting requirements for close companies.

Staffing costs

The National Living Wage rises to £13.21 an hour from 1 April 2027. If you employ staff, build the increase into your 2027/28 budget — our guide to creating a business budget shows how.

Mileage and expenses

The approved mileage rate for business miles above 10,000 a year rises from 25p to 35p a mile from 6 April 2027. If you or your employees drive their own vehicles for business, the claim becomes more valuable for longer journeys.

What to do now

• List any equipment purchases planned over the next 12 months and tell us before you commit.
• If you provide cars, vans, fuel or medical benefits, check your payroll setup is ready for April 2027.
• Update your 2027/28 forecast for the National Living Wage and any other payroll changes.
• Leave your dividend and salary plan in place unless something else has changed in your circumstances.
• Do not act on the 2028 distributions reform until the detail is published.

For the full picture, read our Autumn Budget 2026 overview.

This 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.