Autumn Budget 2026

The Chancellor John Healey delivered a Budget stating that it gives families and businesses breathing space from rising costs, with action on energy bills, fuel duty, wages and the everyday cost of living. The government is keeping to its commitments on tax, with no increase to the headline rates of income tax, National Insurance contributions or VAT. The government is further modernising the tax system, closing loopholes, and ensuring that everyone pays the tax they owe.

The government also announced they will modernise the existing Payments on Account system for Income Tax Self-Assessment (ITSA), following a consultation with stakeholders and affected taxpayers. From April 2029, taxpayers who already make Payments on Account will make smaller, more regular contributions towards their tax bill throughout the year, bringing payment closer to when income is earned. This will help taxpayers budget and plan for their tax obligations, reducing the risk of large, unexpected tax bills and making it less likely that they fall behind on tax due and build up debt.

Below are the measures that matter most for owner-managed businesses, sole traders, landlords and individual SA clients.

Landlords and savers

• From 6 April 2027, property and savings income will be taxed at 24% (basic), 44% (higher) and 49% (additional). That is 2 points above the rates already announced in Budget 2025.
  • The property rates apply in England, Wales and NI. The savings rates apply UK-wide.
• However, the planned cut to Cash ISA’s for under-65s from April 2027 has been scrapped. Everyone keeps the full £20,000 cash ISA limit.

Pensioners

• From April 2027, a new Pension Tax Allowance means people over State Pension age whose total income is no more than the full new State Pension (£13,036.40 in 2027/28) pay no income tax.
  • It is worth up to £94 a year and runs for three years (2027/28 to 2029/30).
  • It tapers away at £1 for every £3 of income above that level.

Sole traders and the self-employed

• From 6 April 2027 the trading allowance rises from £1,000 to £3,000, and the SA reporting threshold rises to £3,000.
• MTD for Income Tax: clients with qualifying income over £30,000 who join in April 2027 get no late-submission penalty points on their 2027/28 quarterly updates.
• From April 2029, clients with payments on account will move to smaller, more frequent payments during the year. HMRC will consult first.
• The mileage rate above 10,000 business miles rises from 25p to 35p from 6 April 2027. The first-10,000-mile rate has been 55p since April 2026.
• Paternity Pay: From April 2019 self-employed dads and partners who currently get no statutory parental pay will be able to claim two weeks’ support of up to £194 a week.

Employers and directors

• National Living Wage: the rate for workers aged 21 and over rises 3.9% from April 2027, from £12.71 to £13.21 an hour (+50p).
• National Minimum Wage: the rate for 18 to 20-year-olds rises from £10.85 to £11.27 an hour (+42p).
• Corporation Tax stays at 25% main rate and 19% small profits rate.
• Capital allowances:
  • The main-rate first-year allowance rises from 40% to 50% for expenditure from 1 January 2027.
  • The main-pool writing-down allowance falls from 14% to 12% from April 2027.
  • The AIA (£1m) and full expensing are unchanged.
• Payrolling of benefits becomes mandatory for cars, fuel and medical benefits from 6 April 2027, and for most other benefits from April 2028.

Selling a business

• The lifetime limit for capital gains eligible for Business Asset Disposal Relief (BADR) from £1 million to £500,000 from April 2027.

Retail, hospitality and leisure business rates (England)

• From April 2027 the Small Business Rates Relief (SBRR) threshold will increase from £12,000 to £18,000 for 100% relief and from £15,000 to £21,000 for tapered relief for qualifying RHL properties in England
• Pubs, social clubs and most live music venues get an extra 20% relief.

Other

• Fuel Duty frozen again: This UK-wide tax on petrol and diesel which has not been increased since 2011 – will remain at 52.95p a litre as the temporary 5p cut has been extended again until July 2027.
• In 2027 the government is providing a £100 Household Energy Payment for up to 20 million households in bands A to D in England, with funding for similar support provided to the rest of the UK, while the temporary VAT cut on electricity bills will be extended until 1 July 2027.
• Green energy Loans: Households across the UK will soon be able to get interest-free or “low-interest” loans to help pay for solar panels, battery storage, heat pumps and more, the Government has confirmed.