Autumn Budget 2026: What It Means for Employers and Businesses

Mike Jackson FCCA

5 hours ago

8 min read

Chancellor John Healey delivered the Autumn Budget on Wednesday 28 October 2026. This is our summary of the measures most relevant to employers, company directors, landlords, sole traders and savers. Every figure below has been checked against the documents HM Treasury published on GOV.UK today. Where something has only been reported and not yet confirmed in an official document, we say so.

Key points at a glance

Landlords: tax rates on property income rise by 2 percentage points at the basic, higher and additional rates from 6 April 2027.
Savers: tax rates on savings income also rise by 2 percentage points at each rate from 6 April 2027. The cash ISA limit stays at £20,000.
Capital allowances: the main rate first-year allowance rises from 40% to 50% from 1 January 2027, while the main rate writing-down allowance falls from 14% to 12% from April 2027.
Business Asset Disposal Relief: the lifetime limit is cut to £500,000 from 6 April 2027.
Sole traders: the trading allowance rises from £1,000 to £3,000 from 6 April 2027, and there will be no late-submission penalties for quarterly updates in the first year of Making Tax Digital for those joining from April 2027.
Employers: mandatory payrolling of benefits in kind now starts with company cars, vans, fuel and medical benefits from April 2027, with most other benefits following from 6 April 2028.
Thresholds: the income tax personal allowance and basic rate limit, and the main National Insurance thresholds, remain frozen up to and including 2030-31.

Employers and payroll

National Living Wage (reported). In his speech the Chancellor said the National Living Wage and National Minimum Wage will both rise by 3.9% from April 2027. Press reports put the new rates at £13.20 an hour for workers aged 21 and over (from £12.71) and £11.27 for 18 to 20-year-olds (from £10.85). We have not yet been able to confirm these figures in an official GOV.UK document, so please treat them as reported until the government publishes the confirmed rates.

Benefits in kind through payroll. The timetable for mandatory payrolling of benefits in kind has been revised. From April 2027, employers will have to report and pay income tax and Class 1A National Insurance through payroll for company cars, vans, fuel and medical benefits. Most remaining benefits follow from 6 April 2028. Beneficial loans and employer-provided accommodation stay outside the payrolling rules. If you provide company cars or private medical cover, it is worth talking to whoever runs your payroll well before April 2027.

National Insurance thresholds. The employer secondary threshold stays at £5,000 and the employee primary threshold and upper earnings limit remain frozen, all up to and including 2030-31. The Budget's policy decisions table contains no change to the main rates of employer or employee National Insurance.

Mileage rates. The tax-free approved mileage rate for cars and vans rises to 55p a mile for the first 10,000 business miles from 6 April 2026, according to the Treasury's costings document, and the rate above 10,000 miles rises to 35p from 6 April 2027. As the 55p rate is dated to the current tax year, check with us before changing what you pay staff or claim.

Later changes. From 6 April 2029, PAYE customers who do not already pay by Direct Debit will need to set up a mandate so that unpaid PAYE return liabilities can be collected that way (from 1 April 2029 for VAT).

Company directors and limited companies

Capital allowances. The main rate first-year allowance, introduced at Autumn Budget 2025, increases from 40% to 50% for qualifying expenditure incurred on or after 1 January 2027. It applies to new main rate plant and machinery, including assets for leasing, but not second-hand assets or cars. At the same time, the main rate writing-down allowance falls from 14% to 12% from 1 April 2027 for companies and 6 April 2027 for unincorporated businesses. If you are planning a significant equipment purchase, the timing around these dates could matter.

Business Asset Disposal Relief. The lifetime limit falls to £500,000 of qualifying gains from 6 April 2027. Gains above the limit will be taxed at the main Capital Gains Tax rates of 18% (within any unused basic rate band) or 24%. Directors considering selling or winding up a company should take advice before that date.

Share schemes and founders. A new Capital Gains Tax relief for qualifying founders of high-growth, innovative companies (Founders' Relief) is being introduced from 6 April 2027. The EMI 2 individual option limit rises to £120,000 from 6 April 2027, alongside the existing £250,000 EMI limit, and the maximum exercise period is extended from 10 to 15 years.

Dividends and distributions. The Budget's policy decisions table contains no change to dividend tax rates. The government will modernise the rules on company distributions from 6 April 2028, so that some ways of taking value out of a company that currently get Capital Gains Tax treatment are taxed as dividends instead, while protecting genuine changes of ownership, including family succession. Our limited company accounts service covers how this may affect your own extraction plans as more detail emerges.

Corporation tax. The policy decisions table contains no change to the main rate of corporation tax. R&D claimants will no longer need to submit a Claim Notification Form from 1 April 2027.

Self-employed, landlords and Making Tax Digital

Property income. Income tax on property income for unincorporated landlords will rise by 2 percentage points at the basic, higher and additional rates from 6 April 2027. Relief for finance costs will continue to be given at the property basic rate.

Landlord registration. Private landlords in England will pay a £65 fee per property for the 'Register your rental property' service from 15 December 2026.

Trading allowance. The trading and miscellaneous income allowance rises from £1,000 to £3,000 from 6 April 2027. People whose trading income is at or below the allowance will not need to report it through Self Assessment.

Making Tax Digital. For sole traders and landlords required to join Making Tax Digital for Income Tax from April 2027, HMRC will not charge late-submission penalties for quarterly updates in the 2027-28 tax year. Penalties for missing the annual return deadline still apply, and quarterly updates must still be submitted before the final return.

Online sellers. From 1 October 2027, online marketplaces will become liable for the VAT on sales by UK sellers: all VAT-registered sellers, and non-registered sellers whose sales on a platform exceed £90,000 a year. Second-hand goods, business-to-business and consumer-to-consumer sales are excluded.

Later changes. The government plans to require Self Assessment taxpayers to pay more of their tax in-year from 2029. From 6 April 2028, people whose only reason for filing a return is to claim unreimbursed employment expenses will be able to claim through PAYE instead, with the £2,500 Self Assessment threshold removed.

Personal tax: income, savings, dividends and capital gains

The personal allowance and basic rate limit remain frozen up to and including 2030-31. The Budget's policy decisions table contains no change to the main rates of income tax.

Tax on savings income rises by 2 percentage points at the basic, higher and additional rates from 6 April 2027. The personal savings allowance and ISAs still shelter savings income, and the cash ISA limit will be maintained at £20,000 from 6 April 2027. A new First Time Buyer ISA will replace the Lifetime ISA for new savers from 6 April 2029, and the Lifetime ISA withdrawal charge falls from 25% to 20% for first-time buyers buying above the £450,000 price cap from 29 October 2026.

From 6 April 2027 until 5 April 2030, pensioners whose total income is no more than the full new State Pension will have no income tax to pay, with the relief tapering above that level.

Capital Gains Tax rates remain 18% and 24%. Apart from the changes to Business Asset Disposal Relief and the new Founders' Relief above, the policy decisions table contains no change to Capital Gains Tax.

Inheritance tax and pensions

The inheritance tax nil-rate band and residence nil-rate band remain at their 2020-21 levels up to and including 2030-31, and the £2.5 million allowance for 100% agricultural and business property relief is maintained at that level for the same period. The policy decisions table contains no new change to the previously announced plans to bring pensions into inheritance tax.

The two-year rule for the taxation of pension and lump sum death benefits is removed where the member dies before age 75, for payments made after 28 October 2026, whatever the date of death.

VAT and other business measures

Business rates (England): from 1 April 2027, Small Business Rate Relief thresholds for retail, hospitality and leisure properties rise from £12,000 to £18,000 for 100% relief and from £15,000 to £21,000 for tapered relief. Business rates relief for pubs, social clubs and live music venues rises by 20 percentage points to 35%.
VAT on domestic electricity is cut from 5% to 0% from 1 October 2026 to 1 July 2027.
From 1 April 2027 the reverse charge on cross-border services will be restricted: overseas suppliers will have to charge UK VAT when selling services to UK businesses that are not VAT-registered. VAT-registered customers keep the reverse charge.
E-invoicing: VAT invoices between businesses will have to be issued in a specified electronic format from April 2029.
Fuel duty: the temporary 5p-per-litre cut is extended and the planned RPI increase deferred to 1 July 2027. Red diesel duty is reduced by 3.7p per litre until 1 July 2027.

What to do next

Employers: check your payroll budget for April 2027 once the confirmed minimum wage rates are published, and prepare for payrolling company cars, vans, fuel and medical benefits from April 2027.
Directors: if you are planning to sell or close your company, review the timing against the 6 April 2027 Business Asset Disposal Relief change.
Businesses buying equipment: consider the 1 January 2027 first-year allowance increase and the April 2027 writing-down allowance cut.
Landlords: review how the higher property income rates from 6 April 2027 affect you, and get ready for Making Tax Digital if it applies to you.
Savers: make use of ISAs and your personal savings allowance before the savings rate rise from 6 April 2027.

When the changes take effect

28 October 2026: pension death benefits two-year rule removed (members dying before 75).
15 December 2026: £65 per-property landlord registration fee (England).
1 January 2027: main rate first-year allowance rises to 50%.
April 2027: minimum wage increases (reported); company car, van, fuel and medical benefits payrolled; writing-down allowance falls to 12%; business rates changes.
6 April 2027: property and savings income rates up 2 points; trading allowance £3,000; Business Asset Disposal Relief limit £500,000; Making Tax Digital penalty easement for the first year.
1 October 2027: online marketplace liability extended.
6 April 2028: most remaining benefits in kind payrolled; distributions rules modernised.
April 2029: e-invoicing and Direct Debit requirements for VAT and PAYE.

Need a hand working out what this means for you? We're accountants in Bury, and our team can go through the changes with you for a fixed fee.

Talk it through with us

If you'd like to know what the Budget means for you or your business, book a free, no-obligation 30-minute chat by phone, Teams or at our Bury office, or see your fixed fee online in 2 minutes. Prefer to talk now? Call 0161 327 0047.

Sources: HM Treasury, Budget 2026 Policy Costings; Table 6.1 Budget 2026 Policy Decisions; Impact on households: distributional analysis to accompany Budget 2026 (all published 28 October 2026 in the 'Budget 2026 in full' collection on GOV.UK). Minimum wage figures are as reported from the Chancellor's speech pending official confirmation. This article is a general summary, not advice; the detail of many measures will follow in legislation and HMRC guidance.