Chancellor John Healey delivered his first Budget on 28 October 2026. It was a steady, low-drama Budget: no new tax on wages or dividends, real help for the high street, and extra cost for landlords, savers and people selling a business. Here is what changed, who it affects, and four calculators to show you the numbers.
The Budget in one line: for most small companies and sole traders, there is no new tax on wages or dividends and there is real help on business rates, but selling a business, renting out property and holding savings outside an ISA will all cost more from April 2027.
Winners and Pressure Points
- No change to dividend or employment income tax
- Trading allowance triples to £3,000
- Small business rate relief threshold up to £18,000 (England)
- 55p mileage rate made permanent; 35p above 10,000 miles
- Capital allowance first-year rate rises to 50%
- No increase in main CGT rates
- New founders’ relief at 10% on up to £10m of gains
- BADR lifetime limit halves to £500,000
- Property and savings income taxed at 24% / 44% / 49% from April 2027
- Writing down allowance falls to 12%
- National Living Wage up 3.9% to £13.21
- Online marketplaces to collect VAT on UK sellers
- Self Assessment payments to be accelerated from April 2029
- More HMRC enforcement powers and funding
What Does the Budget Mean in Pounds?
Pick a tab, enter your figures and see the difference. Free tool by Beck Hill Ltd.
Applies to qualifying disposals on or after 6 April 2027. Assumes a higher-rate taxpayer, BADR at 18% and the main higher CGT rate of 24%. Ignores the annual exempt amount.
These calculators are illustrative estimates based on the Budget announcements. Legislation has not yet been passed and your personal position may differ. They are not tax advice.
All the Measures, Filtered for You
Choose who you are and we will show only what matters. Green means it was announced in this Budget, navy means it was announced before and is still coming, and amber means a change that people expected has not happened.
Dividend rates stay at 10.75% (basic), 35.75% (higher) and 39.35% (additional) after the April 2026 rise. Personal tax thresholds stay frozen until 2031, so rising earnings keep pulling more income into higher bands (fiscal drag). Corporation Tax remains capped at 25% for this Parliament.
BADR still gives an 18% rate, but only on the first £500,000 of lifetime gains instead of £1 million. Gains above that are taxed at the standard rates. The Chancellor says three in four claimants are unaffected. The maximum extra cost is £30,000.
A new relief taxes lifetime gains of up to £10 million at 10% for founders of the most successful companies. The conditions look tight, so it is aimed at fast-growing firms rather than every owner-managed business. HMRC is consulting on the detail until 30 November 2026.
Full expensing stays for companies on eligible assets. For other main-rate assets, the first-year allowance rises from 40% to 50% for spending on or after 1 January 2027, which mainly helps unincorporated businesses. The main writing down allowance falls from 14% to 12% (from 1 April 2027 for Corporation Tax, 6 April 2027 for Income Tax).
Rates on property and savings income were already due to rise by 2 points (to 22%, 42% and 47%). This Budget adds another 2, so the rates become 24% (basic), 44% (higher) and 49% (additional). That makes individual landlords and property partnerships worse off compared with corporate landlords, and makes ISAs more valuable.
For qualifying retail, hospitality and leisure properties, the rateable value threshold rises to £18,000, with the upper limit for tapered relief rising to £21,000. The Government says 70,000 more businesses will pay no business rates. Other retail, hospitality and leisure businesses get a two-year real-terms freeze.
The business rates reduction for pubs and live music venues is reported to rise to 35% (from the 20% previously announced). Vape shops and adult gaming centres lose their business rates reliefs. Machine Games Duty rises from 20% to 25% for higher-stakes machines, and there is a £10 million alcohol duty relief package for small brewers and cider makers.
You can earn up to £3,000 a year from a small trade or side income tax-free, and the Self Assessment reporting threshold for trading income also rises to £3,000. You can use either the allowance or your actual expenses, not both.
A new young entrepreneurs allowance will cover a year of living costs for young founders turning an idea into a business. There is also a new scale-up programme for female founders, and self-employed fathers and partners will now be able to receive paternity leave.
The National Living Wage for over-21s rises from £12.71 to £13.21 an hour. The 18 to 20 rate rises from £10.85 to £11.27, and the 16 to 17 and apprentice rate is reported to rise from £8.00 to £8.31. NI thresholds (other than the Lower Earnings Limit and Small Profits Threshold) stay at 2026/27 levels until 2030/31.
The 55p rate for the first 10,000 business miles, introduced in April 2026, is locked in. The rate for miles above 10,000 rises from 25p to 35p, and this also applies to the simplified mileage rates used by the self-employed.
The 5p fuel duty cut is extended from 1 January to 30 June 2027, along with further cuts to red diesel and some other rebated fuels. From 1 July 2027, duty returns to its pre-cut level and rises with RPI inflation.
The CSOP individual option limit doubles from £60,000 to £120,000, the exercise period extends to 15 years, the interaction between the EMI and CSOP limits is removed, and the EMI exercise window after certain events extends to 180 days.
From October 2027, online marketplaces will be responsible for collecting and paying VAT on sales by UK VAT-registered businesses and other UK businesses above a minimum threshold per platform. The threshold and exact date will be set in secondary legislation. Expect closer VAT checks for online sellers.
There are no changes to the VAT registration thresholds. From April 2027, the UK reverse charge will no longer apply to services bought from abroad by non-VAT-registered businesses, which removes the risk of the reverse charge pushing you over the registration threshold. Overseas suppliers will need to charge UK VAT instead.
The R&D claim notification form is removed from 1 April 2027, and the additional information form will be simplified from autumn 2027. Separately, reforms to the company distributions framework from 6 April 2028 are expected to affect restructurings such as capital reductions, company purchases of own shares and demergers. Draft legislation is due in 2027.
The timing of Self Assessment income tax payments will be brought forward from April 2029 to “level the playing field” between the employed and the self-employed. Expect a cash flow impact when it starts.
HMRC gets £70 million of extra funding to tackle evasion, Customer Correction Notices where it suspects an inaccuracy (from 1 April 2028), a lower threshold for recovering low-value tax debts directly from bank accounts (from April 2029), a stronger informants reward scheme, and more scrutiny of wealthy taxpayers.
MTD for Income Tax started in April 2026 for sole traders and landlords with gross income over £50,000. The threshold falls to £30,000 in April 2027 and £20,000 in April 2028. This Budget did not change that timetable.
From April 2027, employers must payroll benefits such as company cars, car fuel, vans, van fuel and employer-provided medical benefits, rather than reporting them after the year end.
Salary-sacrificed pension contributions above an annual £2,000 will no longer be exempt from National Insurance from April 2029.
Despite heavy speculation, main capital gains tax rates were not increased. There were no changes to the seven-year gifting rule, gifting exemptions, taper relief or the residential nil rate band. Earlier inheritance tax changes (the £2.5m cap on 100% APR/BPR from April 2026 and pensions entering IHT from April 2027) still stand.
The £20,000 cash ISA limit is kept for everyone over 18, and the planned restriction on cash within the allowance has been scrapped. A new First Time Buyer ISA will replace the Lifetime ISA for new savers from April 2029, with a 25% government bonus on balances up to £20,000 towards a first home worth up to £450,000. From 29 October 2026, the Lifetime ISA withdrawal charge for buying above the price cap falls from 25% to 20%.
The state pension rises by 3.9% in April 2027, and pensioners whose only income is the state pension will not pay small tax bills where it just exceeds the personal allowance. The Carer’s Allowance earnings cliff edge is replaced by a taper. The Chancellor also proposed replacing the triple lock with a double lock from April 2030, subject to winning the next general election.
The VAT cut on household electricity is extended to mid-2027, a £100 energy payment goes to households in council tax bands A to D in England, and gas standing charges are to be folded into unit rates as soon as possible in 2027. A new British Industrial Competitiveness Scheme will cut electricity bills by up to 25% for around 10,000 energy-intensive firms from April 2027, so it is unlikely to cover most small businesses.
Key Dates Timeline
Budget delivered by Chancellor John Healey. The Lifetime ISA withdrawal charge fell from 25% to 20% the next day.
HMRC consultation on the detail of founders’ relief closes.
50% first-year allowance for main-rate assets starts. Bank corporation tax surcharge rises to 6% for 15 months.
National Living Wage rises to £13.21. Small business rate relief threshold rises to £18,000 (England). Writing down allowance falls to 12% for Corporation Tax. R&D notification form removed. Machine Games Duty rises.
BADR limit cut to £500,000. Founders’ relief begins. Trading allowance rises to £3,000. Mileage rate above 10,000 miles rises to 35p. Property and savings income tax rises to 24% / 44% / 49%. MTD threshold falls to £30,000. Mandatory payrolling of benefits. Share scheme changes. State pension rises 3.9%.
The 5p fuel duty cut ends and duty returns to its pre-cut level, rising with RPI.
Online marketplaces begin collecting VAT on UK seller sales (threshold and date to be set).
Customer Correction Notices from 1 April. Company distributions reform and MTD threshold of £20,000 from 6 April. High-value council tax surcharge starts.
Faster Self Assessment payments, the £2,000 salary sacrifice NI cap, tougher low-value debt recovery, and the First Time Buyer ISA.
What Did Not Change
Just as important are the things people feared and did not happen:
| Area | Position after the Budget |
|---|---|
| Dividend tax | No change: 10.75% / 35.75% / 39.35% |
| Employment income tax | No change; thresholds frozen to 2031 |
| Corporation Tax | Capped at 25% for this Parliament |
| Main CGT rates | Not increased |
| VAT registration threshold | No change |
| Inheritance tax | No new changes to gifting rules or the residential nil rate band |
| Stamp duty and council tax | No overhaul of SDLT or council tax |
A note for readers in Wales: several measures, including business rates relief, are announced for England. Business rates are devolved, so businesses in Neath, Port Talbot, Swansea and across Wales should wait for the Welsh Government’s own decisions rather than assume the English changes apply.
What to Do Now
- Selling or closing a business? Model the BADR change and compare completion before and after 6 April 2027
- Buying equipment or vehicles? Check how the 1 January 2027 and April 2027 allowance changes affect timing
- Landlord or saver? Review rental profits, ownership and ISA use before the April 2027 rate rise
- Employer? Update payroll rates, forecasts and benefits reporting for April 2027
- Sole trader or side hustler? Check whether the new £3,000 allowance or your actual expenses works better
- Drive for work? Start a mileage log and plan around the new 35p rate
- Income over £30,000 as a sole trader or landlord? Get MTD-ready before April 2027
Frequently Asked Questions
No. The Chancellor confirmed no change to tax on dividends or employment income. The dividend rates that took effect in April 2026 stay as they are, and personal tax thresholds remain frozen until 2031.
Most changes begin in April 2027. The key exceptions are the capital allowances first-year rate (1 January 2027) and the fuel duty extension (to 30 June 2027). Some changes, such as faster Self Assessment payments, do not start until 2029.
Not yet. These are Budget announcements, and the legislation will pass through Parliament in the Finance Bill. Some details, such as founders’ relief, are still under consultation, so the final rules may differ.
Yes. Higher wages mean higher employer National Insurance at 15% on pay above the secondary threshold. The Employment Allowance can still offset up to £10,500 of employer NI if you are eligible and claim it.
Check any plans to sell shares or the business (BADR), any equipment purchases (capital allowances), and any restructuring or share buybacks (the 2028 distributions reform). If you employ staff, plan for the April 2027 wage rise.
This guide summarises the Autumn Budget 2026 announcements made on 28 October 2026 and is general information, not personal advice. Rates, dates and eligibility may change as legislation is finalised. Official documents are published on GOV.UK in the Budget 2026 document and the HMRC Budget 2026 tax-related documents collection.
Let’s Work Out What the Budget Means for You
Every business and household is different. Beck Hill Ltd can review your position, model the changes that affect you, and help you act before the April 2027 deadlines. We serve clients in Neath, Port Talbot, Swansea and across the UK.
Book a Budget Review Call: 07588 603827
