Autumn Budget 2026: What does it mean for you and your business?

Chancellor John Healey delivered his first Budget on 28 October 2026, promising to give households and businesses some much-needed 'breathing space' from rising costs. While there were no changes to the headline rates of Income Tax on earnings, National Insurance or VAT, a number of announcements could have significant implications for taxpayers over the coming years.

The Government expects its tax measures to raise around £7 billion a year by 2031/32, with many of the changes taking effect from April 2027. So, while there may be some immediate relief, there is plenty for individuals and business owners to consider.

Income Tax and allowances

The Personal Allowance will remain frozen at £12,570 for 2027/28, with most Income Tax and National Insurance thresholds staying unchanged until 2030/31. This means that as earnings increase, more income may become subject to tax, even without an increase in the headline rates.

For those receiving savings interest or rental income, the changes are more noticeable. From 6 April 2027, Income Tax rates on savings and property income will increase by four percentage points, bringing the basic, higher and additional rates to 24%, 44% and 49% respectively.

There is some welcome news for smaller traders, with the Trading Allowance increasing from £1,000 to £3,000 from April 2027, alongside an increase in the Self Assessment trading income reporting threshold to £3,000.

Changes affecting businesses and employers

The National Living Wage will increase by 3.9% to £13.21 per hour from 1 April 2027, with corresponding increases for younger workers and apprentices. Employers should factor these additional costs into their budgets.

From 6 April 2027, employers will also be required to process Income Tax on company cars, vans, fuel and medical benefits through payroll, with most other taxable benefits following in April 2028.

For businesses investing in equipment, the Annual Investment Allowance remains at £1 million, although the main Writing Down Allowance will reduce from 14% to 12% from April 2027. Meanwhile, the First Year Allowance for certain qualifying expenditure will increase from 40% to 50% from January 2027.

Corporation Tax rates remain unchanged, with the main rate at 25% and the small profits rate at 19%.

Company directors and business owners

One announcement worth particular attention concerns Business Asset Disposal Relief. From 6 April 2027, the lifetime limit for qualifying gains will fall from £1 million to £500,000, although the reduced Capital Gains Tax rate remains at 18%.

For someone considering selling their business, this could make a substantial difference to the eventual tax bill. The timing of a disposal may therefore be important, although anti-avoidance provisions mean that simply signing a contract before the deadline will not necessarily preserve the existing relief.

The Government is also reviewing how profits are extracted from companies, particularly arrangements designed to secure Capital Gains Tax treatment rather than Income Tax. Further reforms are expected from April 2028.

Making Tax Digital and electronic invoicing

Making Tax Digital for Income Tax continues its phased introduction. From April 2027, sole traders and landlords with qualifying gross income exceeding £30,000 in 2025/26 will generally need to maintain digital records and submit quarterly updates to HMRC.

Looking further ahead, VAT-registered businesses will be required to issue and receive structured electronic VAT invoices from April 2029, unless an exemption applies.

Both changes reinforce the importance of keeping accurate, up-to-date records and ensuring accounting systems are suitable for the requirements ahead.

Savings, pensions and household costs

The Government has reversed its planned reduction to the cash ISA limit, meaning adults can continue to save up to £20,000 annually in cash ISAs.

From April 2027, most unused pension funds and pension death benefits will also be included in an individual's estate for Inheritance Tax purposes. With the £325,000 nil rate band and £175,000 residence nil rate band remaining frozen, this could have implications for estate planning.

On household costs, the temporary 0% VAT rate on domestic electricity will continue until 30 June 2027. Households in England in Council Tax bands A to D will also receive a £100 Household Energy Payment from January 2027.

What should you do now?

This Budget contained plenty of smaller announcements rather than one or two headline-grabbing changes. Some will provide welcome relief, while others could increase costs or create additional administrative responsibilities.

Much of the legislation is still to be finalised, and several measures remain subject to consultation. Nevertheless, there are already areas where planning ahead could make a difference, particularly for business owners considering a sale, landlords, savers and employers preparing for new payroll requirements.

As ever, the important thing isn't simply knowing what has been announced, but understanding how it affects your own circumstances.

If you're unsure what the Budget means for you or your business, please get in touch. We can help you understand the changes and plan accordingly.