Autumn Budget 2026 – What the Key Announcements Mean for You

On 28 October 2026, Chancellor John Healey presented his first Budget. Billed as giving families and businesses ‘breathing space’ from rising costs, it left the rates of VAT and National Insurance unchanged, along with Income Tax rates on wages and self-employed income. Even so, the government’s own figures show its tax measures raising around £7 billion a year by 2031-32, with most of the increases starting in April 2027.

The headlines

• A further 2 percentage point rise in Income Tax on savings and property income from 6 April 2027, on top of the 2 points announced at last year’s Budget.
• Plans to halve the Business Asset Disposal Relief limit to £500,000 and introduce a 10% Founders’ Relief from 6 April 2027.
• Plans to reform how capital company distributions are taxed from April 2028.
• Increases and decreases to plant and machinery capital allowances.
• A more generous Trading Allowance, rising from £1,000 to £3,000 from 6 April 2027.
• The cash ISA limit kept at £20,000, and a new First Time Buyer ISA from April 2029.
• A 3.9% rise in the National Living Wage to £13.21 an hour from 1 April 2027.
• A £100 Household Energy Payment for Council Tax bands A to D in England from January 2027.

If you are employed

• Income Tax rates on earnings are unchanged, but your Personal Allowance stays at £12,570 in 2027-28, so pay rises bring more of your income into tax. National Insurance rates are unchanged, and most thresholds stay frozen until 2030-31.
• If you use your own car or van for work, the 55p tax-free rate still applies to the first 10,000 business miles. Above that, the mileage rate is set to rise from 25p to 35p from 6 April 2027.
• If you have a company car or medical cover, tax on it is due to be collected through your pay from 6 April 2027.
• VAT on household electricity stays at 0% until 30 June 2027.

If you run a business or are a company director

• If you employ staff, the National Living Wage rises 3.9% to £13.21 an hour from 1 April 2027.
• Company cars, vans, fuel and medical cover are due to go through your payroll from 6 April 2027.
• There are changes to the tax deductions for capital allowances on equipment and other business assets, and the date you make capital investments may be significant.
• If you are self-employed and had gross trading income of between £30,000 and £50,000 in 2025-26, you will likely need to join Making Tax Digital for Income Tax in April 2027, with digital record-keeping and quarterly submissions to HMRC.
• If you sell through online marketplaces, the platform may have to collect your VAT from October 2027.
• If you operate through a company, HMRC is homing in on how you take profits from it, so good, timely record-keeping is essential.
• A package of Business Rates measures includes relief for pubs, social clubs, retail, hospitality and leisure.
• If you plan to sell the business, Business Asset Disposal Relief will be more restricted from 6 April 2027, which could increase your Capital Gains Tax bill.

If you let property

• If you let property personally, Income Tax on your rental profits is set to rise by 4 percentage points from 6 April 2027. This may work slightly differently for Scottish taxpayers, and we await the Scottish Budget on 3 December 2026 for details.
• If you had gross property income of between £30,000 and £50,000 in 2025-26, you will likely need to join Making Tax Digital for Income Tax in April 2027.
• If you sell a property, Capital Gains Tax rates stay at 18% and 24%. Remember that you may need to report the sale to HMRC within 60 days.
• Unlike the Trading Allowance, the Property Allowance stays at £1,000.

If you have savings

• If you have savings outside an ISA, Income Tax on your interest is set to rise by 4 percentage points from 6 April 2027. Dividend tax rates stay the same.
• The planned cut to the cash ISA limit has been scrapped, so you can still save £20,000 a year in cash ISAs. With tax on savings rising, that shelter is worth more.
• A new First Time Buyer ISA arrives in April 2029, replacing the Lifetime ISA for new savers. You will be able to save up to £4,000 a year, with a 25% government bonus when you buy your first home (conditions apply, including a £450,000 property price cap).
• If you are over State Pension age, a new Pension Tax Allowance from 6 April 2027 means no Income Tax is due if your total income is no more than the full new State Pension (£13,036.40 for 2027-28).
• Sales or exchanges of cryptoassets may still give rise to Capital Gains Tax, although some will start moving to Income Tax.

If you are building your wealth

• HMRC is changing how it looks at wealthier taxpayers, defined as anyone with income over £200,000 or assets over £2 million in any of the last three years. It is focusing on offshore arrangements, business ownership, trusts and more, so it is worth making sure the picture HMRC has of you is the right one.
• From 6 April 2027, most unused pensions and pension death benefits will count towards your estate for Inheritance Tax. The £325,000 nil rate band and £175,000 residence nil rate band are unchanged for 2027-28, but the pension change could affect your residence nil rate band.
• If you plan to pass on or sell a family business, the ability to claim 100% agricultural or business property relief against Inheritance Tax continues to be potentially restricted, and Capital Gains Tax may be higher from April 2027 as Business Asset Disposal Relief is restricted.
• If you founded a high-growth innovative company that has grown substantially, a new Founders’ Relief may be available in future to secure a 10% rate of Capital Gains Tax.

There is time to plan

Much of what was announced is not yet law. Most measures still have to pass through Parliament in an upcoming Finance Bill, some are still being consulted on, and many do not take effect until April 2027 or later. The detail may change, but there is time to plan, and acting before April 2027 may make a real difference.

Further announcements on the taxes unique to Wales and Scotland will be made on 17 November and 3 December 2026.

Every tax position is different, and the same Budget measure can affect two people in very different ways. If you would like to talk through how the Budget affects you, your family or your business, please get in touch. We’d be happy to help.