Chancellor John Healey delivered the Autumn Budget on 28 October 2026, promising “breathing space” for households and businesses facing rising costs.
Support with energy bills, fuel costs and business rates will be welcome. However, higher taxes on rental income and savings, reduced relief when selling a business and changes to investment allowances also deserve attention.
Here are the key points for business owners, employers and individuals.
Income Tax and dividends
- The main Income Tax rates remain at 20%, 40% and 45% for England and Northern Ireland, with Welsh rates subject to the Welsh Government’s decisions.
- The Personal Allowance remains £12,570, reducing by £1 for every £2 of income above £100,000.
- Dividend tax rates remain unchanged at 10.75%, 35.75% and 39.35%, with a £500 dividend allowance.
Scottish taxpayers remain subject to separate rates and bands on employment income, trading profits and pensions.
Landlords and savers face higher tax
From 6 April 2027, the announced tax rates on savings and property income will be:
- 24% at the basic rate.
- 44% at the higher rate.
- 49% at the additional rate.
Today’s announcement adds a further 2% to the increases already announced for April 2027. Savings rates apply UK-wide; the property rates apply in England, Wales and Northern Ireland, with devolved powers affecting the position in Scotland and Wales.
Landlords should review the impact on their rental cash flow and the amount they set aside for tax.
Selling your business – Business Asset Disposal Releif (BADR) reduced
The Business Asset Disposal Relief (BADR) lifetime limit will fall from £1 million to £500,000 for qualifying disposals from 6 April 2027. The qualifying tax rate remains 18%.
This could increase the tax payable on a future business sale. Anyone considering selling, retiring or restructuring should review their position before committing to a transaction. Special rules apply to some contracts and share exchanges spanning the change.
New Founders’ Relief
A proposed Founders’ Relief will offer a 10% Capital Gains Tax rate on up to £10 million of lifetime qualifying gains. This is only at the consultation stage and seeks views on how the proposed individual, company and growth and innovation conditions will work in practice.
It is aimed at founders and significant early investors in high-growth, innovative UK companies, with qualifying disposals intended to benefit from 6 April 2027.
Employers – wages and benefits reporting
From 1 April 2027, minimum hourly pay will rise by 3.9% to:
- £13.21 for workers aged 21 and over.
- £11.27 for workers aged 18–20.
- £8.31 for workers aged 16–17 and eligible apprentices.
Employers should build the increases into wage budgets and review pay differentials across their teams.
Mandatory payrolling will begin for company cars, vans, related fuel benefits and medical benefits from 6 April 2027. Most other benefits follow in April 2028, with exceptions for employment-related loans and employer-provided accommodation.
Corporation Tax and business investment
Corporation Tax remains at 25%, with the 19% small profits rate are unchanged.
However, capital allowances are changing:
- The main first-year allowance increases from 40% to 50% for qualifying expenditure from 1 January 2027.
- The main writing-down allowance will fall from 14% to 12% from April 2027.
The effect will depend on the assets purchased and the allowances available to your business.
For many of our clients, qualifying capital purchases will continue to be fully covered by the Annual Investment Allowance (AIA), which remains unchanged at £1 million per year. This generally allows the full cost of qualifying equipment, machinery and vans to be deducted from taxable profits in the year of purchase.
Business rates support
For qualifying retail, hospitality and leisure properties in England, from 1 April 2027:
- The rateable value threshold for 100% Small Business Rates Relief rises from £12,000 to £18,000.
- Tapered relief extends to a rateable value of £21,000.
This in our view is limited support as many businesses in these sectors occupy properties with rateable values in excess of £21,000 and therefore the relief will have no impact.
Self-employment and growing businesses
The trading allowance increases from £1,000 to £3,000 from 6 April 2027, alongside a higher trading income reporting threshold. This is particularly relevant to people starting a small business or earning occasional trading income.
The Budget also expands tax-advantaged employee share schemes and announces simplifications to R&D tax relief administration—potentially useful for businesses investing in innovation or looking to retain key staff.
Motoring costs and support for farmers
The 5p fuel duty cut is extended to 1 July 2027. Temporary red diesel duty reductions are also extended, providing support for eligible agricultural users.
Tariff suspensions on fertiliser and kerosene heating oil should also help businesses and rural households facing higher costs.
For business journeys in your own car or van, the 55p rate for the first 10,000 miles becomes permanent, while the rate above 10,000 miles rises from 25p to 35p from 6 April 2027.
Savings, pensions and household bills
The planned reduction in the cash ISA limit has been dropped: the annual limit stays at £20,000. A U-turn on the previous announcement made by Rachel Reeves when Chancellor.
From April 2027, the Pension Tax Allowance will protect eligible people at State Pension age whose total income is no more than the full new State Pension. Some with slightly higher incomes will receive a tapered reduction. Eligibility depends on total income; the State Pension remains taxable income.
The temporary zero rate of VAT on domestic electricity is extended to 1 July 2027, and eligible households in Council Tax bands A–D in England will receive a £100 Household Energy Payment from January 2027. Devolved governments will receive funding for their own support.
Tax payments – changes ahead
From April 2029 as predicted, Self Assessment taxpayers making payments on account will move to smaller, more regular payments during the tax year. The payment frequency has yet to be finalised.
This changes payment timing, with a transition year that could put pressure on cash flow as previous-year liabilities overlap with the new arrangements.
What should you do next?
Review your wage budget, rental income, investment plans and any proposed business sale. The impact will depend on your circumstances, and several measures still require legislation or further detail.
Contact SeavorChartered to discuss what the Budget means for you, your family and your business.
This summary reflects announcements and guidance available on 28 October 2026.
