Autumn Budget 2026: Key Tax Changes and What They Mean for You

Chancellor John Healey delivered his first Autumn Budget on Wednesday 28 October 2026, under Andy Burnham’s new Labour government, with a message of “growth in every postcode”. After last year’s wide-ranging tax rises, this Budget put high-growth businesses and entrepreneurs firmly in the spotlight. It was a more mixed Budget, however, with a few further squeezes on savers and landlords alongside some welcome support for founders, employers and the self-employed. Our accountants have summarised the key changes below.

1. Another 2% on property and savings income

From April 2027, the tax rates on property and savings income will rise by a further two percentage points, on top of the two-point rise already planned by Rachel Reeves. Basic rate taxpayers will go from paying 20% to 24%, higher rate taxpayers from 40% to 44% and additional rate taxpayers from 45% to 49%. Other income tax rates are unchanged.

We advise landlords and savers to review how their income is held and whether ISAs, pensions or restructuring ownership could help.

2. Tax thresholds stay frozen until 2031

The Personal Allowance, higher rate threshold and additional rate threshold will once again remain frozen until 5 April 2031, making this the longest sustained freeze in modern UK history. National Insurance thresholds for employees, employers and the self-employed are frozen to the same date, and Inheritance Tax nil rate bands stay at current levels. Frozen thresholds mean more of your income is taxed as pay rises, which is known as fiscal drag.

3. ISA changes

The Chancellor has reversed Rachel Reeves’ planned cut to the cash ISA limit, which is very much welcome, and has also introduced a new First Time Buyer ISA. The changes are as follows:

• The annual cash ISA limit stays at £20,000 from 6 April 2027.
• A new First Time Buyer ISA arrives in April 2029. You can pay in up to £4,000 a year and receive a 25% government bonus, which can be withdrawn towards a first home.
• From 29 October 2026, the Lifetime ISA withdrawal charge on purchases above the property price cap falls to 20%.

4. National Living Wage rises 3.9%

From 1 April 2027, the National Living Wage rises to £13.21 per hour. The rate for 18 to 20 year olds rises to £11.27, and for 16 to 17 year olds and eligible apprentices to £8.31. Employers should factor this into payroll budgets and pay structures now

5. Business Asset Disposal Relief reduced by half

With effect from 6 April 2027, the lifetime limit on gains eligible for Business Asset Disposal Relief (BADR) will fall from £1 million to £500,000. For an individual realising a gain of £1 million, this could result in approximately £30,000 of additional Capital Gains Tax, based on the 18% BADR rate and the 24% main rate.

As the limit applies per individual, ownership structure will be an important consideration. Disposals completed before 6 April 2027 will retain the £1 million limit, so business owners contemplating a sale should seek advice on timing at an early stage.

6. Introduction of Founders’ Relief

This Budget announced a new Founders’ Relief. From 6 April 2027, qualifying founders of high-growth, innovative companies will be able to benefit from a reduced Capital Gains Tax rate of 10% on up to £10 million of lifetime gains. On a gain of £10 million, this represents a saving of £1.4 million compared with the 24% main rate.

The relief is narrowly targeted, meaning owners of many traditional trading businesses will be affected by the BADR reduction without being able to benefit from the new relief. The qualifying conditions include holding at least 25% of the share capital for five or more years and being UK resident for five years before the disposal.

7. Mileage rates

The temporary rate of 55p per mile for the first 10,000 business miles has been made permanent. The rate above 10,000 miles will increase from 25p to 35p from 6 April 2027, with simplified mileage rates for the self-employed set at the same level.

8. Changes to capital allowances

From April 2027, the main rate of Writing Down Allowances will reduce from 14% to 12%, spreading relief on main pool assets over a longer period. In contrast, the main rate First Year Allowance will increase from 40% to 50% for expenditure incurred on or after 1 January 2027, allowing more of the cost to be relieved in the year of purchase.

Businesses planning to invest in equipment or machinery may wish to review the timing of purchases. The Government has also confirmed that the Full Expensing regime will be maintained and that the headline corporation tax rate will remain capped at 25%.

9. Expanded Enterprise Management Incentive (EMI2)

From 6 April 2027, the new EMI2 scheme (formerly the Company Share Option Plan) will double the value of tax-advantaged options an employee may hold from £60,000 to £120,000, and extend the exercise period from 10 to 15 years. This should assist growing businesses in attracting and retaining talent.

10. Support for the self-employed and young entrepreneurs

The Trading Allowance will triple from £1,000 to £3,000 from 6 April 2027. A Young Entrepreneurs Allowance, providing support towards living costs during the first year of trading, will shortly be piloted. From April 2029, taxpayers who make Payments on Account will instead pay smaller, more regular instalments throughout the year.

11. Business rates, energy and other measures

• Business rates: the Small Business Rates Relief thresholds will rise to £18,000 for 100% relief and £21,000 for tapered relief for qualifying retail, hospitality and leisure properties in England from April 2027. Bills for these properties will also be frozen in real terms in 2027/28 and 2028/29.
• Energy: the British Industrial Competitiveness Scheme will reduce electricity bills by up to 25% for over 10,000 energy-intensive businesses from April 2027. The 0% rate of VAT on domestic electricity is extended to July 2027, and up to 20 million households in England will receive a £100 Household Energy Payment from January 2027.
• VAT: rates and thresholds are unchanged. From October 2027, online marketplaces will be responsible for collecting VAT on sales by UK VAT-registered businesses and other UK businesses above £90,000 of annual sales per platform.
• Motoring: the mileage-based Electric Vehicle Excise Duty will be introduced from April 2028, and the 5p fuel duty cut is extended to 1 July 2027.
• Pensioners: a new Pension Tax Allowance from April 2027 will ensure that pensioners with incomes at or below the full new State Pension are not brought into tax by State Pension increases.
• Banks: the Bank Corporation Tax Surcharge will rise temporarily from 3% to 6% from 1 January 2027 until 31 March 2028.

Get advice from an accountant

Our teams in Oxford and Henley are on hand to advise on how these changes may affect you. Please use our online contact form to book a consultation.