Chancellor John Healey delivered the Autumn Budget 2026 on Wednesday 28 October 2026. It is a quiet Budget for headline rates: income tax, National Insurance, VAT, corporation tax and inheritance tax rates are all unchanged, and the freeze on income tax and NIC thresholds runs to April 2031. The new measures raise only around £0.7 billion in 2027-28, mostly from higher tax on savings and property income, a temporary bank surcharge and slower capital allowances.

The measures that matter most

• Savings and property income: a further 2 point rise from 6 April 2027, taking the rates to 24%, 44% and 49%.
• Entrepreneurs: a new Founders’ Relief (10% CGT on up to £10 million of lifetime gains) from 6 April 2027, but Business Asset Disposal Relief’s lifetime limit halves to £500,000.
• Business investment: the main rate first-year allowance rises to 50% from 1 January 2027; the main rate writing-down allowance falls to 12% from April 2027.
• Savers: the cash ISA limit stays at £20,000. A First Time Buyer ISA replaces the Lifetime ISA for new savers from April 2029.
• Employers: EMI and CSOP expanded (“EMI2”), National Living Wage up 3.9% to £13.21, mandatory payrolling of benefits from April 2027.
• Property: SDLT rates unchanged; higher business rates relief threshold in England; VAT zero-rating of land sold to housing associations.

Most measures take effect from April 2027 and remain subject to Finance Bill 2026-27. Read on for a summary of the Impact on Individuals, Entrepreneurs, Business and Property.

Impact on Individuals

The personal allowance (£12,570), the basic rate band (£37,700) and the main income tax rates are unchanged and frozen until April 2031. The real change for individuals is the tax rate on interest and rental income.

Savings and property income: 24%, 44% and 49% from April 2027

From 6 April 2027, savings income (UK-wide) and property income (England, Wales and Northern Ireland) will be taxed at 24%, 44% and 49%. Autumn Budget 2025 had already announced a 2 point rise; this Budget adds another 2 points, so these rates now sit 4 points above the rates on earnings. The £1,000/£500 personal savings allowance and the £5,000 starting rate for savings are unchanged, and dividend rates (10.75%, 35.75% and 39.35% since April 2026) are not raised again.

ISAs and pensions become relatively more valuable, and cash or property held outside a wrapper by higher and additional rate taxpayers carries a materially higher tax cost.

ISAs

• The cash ISA limit stays at £20,000 for all adult savers; the planned cut to £12,000 is dropped.
• A First Time Buyer ISA replaces the Lifetime ISA for new savers from April 2029, with a 25% government bonus (up to a £20,000 maximum) on a first home worth up to £450,000. Existing LISA holders keep their terms, and the LISA charge for buying above the property cap falls from 25% to 20% from 29 October 2026.

Pensions and pensioners

• A Pension Tax Allowance from 6 April 2027 to 5 April 2030 means pensioners whose total income does not exceed the full new State Pension (approximately £13,037 in 2027-28) pay no income tax, tapering away at £1 for every £3 above that level. The maximum saving is small (around £94) and it does not remove the need to file a return where there is investment or rental income.
• The two-year rule on pension death benefits is removed for payments on or after 28 October 2026, and excess lump sum death benefits are taxed on the beneficiary at their marginal rate.
• The annual allowance (£60,000) and lump sum allowance (£268,275) are unchanged, and unused pension funds enter the estate for inheritance tax from 6 April 2027 as legislated in Finance Act 2026.

Inheritance tax

The nil-rate band (£325,000) and residence nil-rate band (£175,000) remain frozen and the previously announced APR and BPR reforms are not revisited. Trustees should note a new statutory rule on deducting trustee liabilities when valuing settled property, effective for deaths and chargeable events from 28 October 2026.

Other personal measures

• The trading allowance triples to £3,000 from 6 April 2027, taking many small side incomes out of Self Assessment.
• Mileage rates: 55p for the first 10,000 business miles is made permanent and the higher-mileage rate rises from 25p to 35p from 6 April 2027.
• Payments on account move to smaller automated in-year direct debit payments from April 2029; mandatory collection through PAYE has been dropped.
• The 0% VAT on domestic electricity and the 5p fuel duty cut are extended to 30 June 2027, and the High Value Council Tax Surcharge on £2 million-plus homes in England remains scheduled for April 2028.
• The residence-based regime that replaced the non-dom rules is unchanged, though the government will review it during 2027.

Impact on Entrepreneurs

The Autumn Budget 2026 shifts capital gains tax relief away from established owner-managers towards founders of high-growth companies. Anyone planning an exit around April 2027 should review the timing now.

Founders’ Relief: 10% CGT on up to £10 million of lifetime gains

A new Founders’ Relief applies to qualifying share disposals on or after 6 April 2027, with a 10% CGT rate on up to £10 million of lifetime gains, a potential saving of up to £1.4 million against the 24% main rate. The conditions, out for consultation until 30 November 2026, are deliberately strict. As proposed, the founder must have held at least 25% of the company from the outset, owned the shares for five years and been UK resident for five years, and the company must have turnover of at least £10 million, at least 15 full-time staff and pass two of three growth and R&D tests. The relief will be legislated by amendment to Finance Bill 2026-27; nobody should assume they qualify until the final rules are published.

Business Asset Disposal Relief: lifetime limit halved to £500,000

For disposals on or after 6 April 2027 the BADR lifetime limit falls from £1 million to £500,000. The rate stays at 18% against a main rate of 24%, so the maximum lifetime saving is now £30,000 per person. Transitional rules cover contracts exchanged before 6 April 2027. For larger exits, planning turns on Founders’ Relief, spousal holdings and Investors’ Relief (unchanged at 18% and £1 million).

Share schemes: EMI2 arrives

From 6 April 2027 CSOP is rebranded EMI2: the individual limit doubles to £120,000, options can run for 15 years, and the limit no longer interacts with EMI, so an employee can hold up to £370,000 of options across both schemes. EMI gains a 180-day exercise window after a disqualifying event, and companies keep the corporation tax deduction based on market value at exercise.

Distributions and demergers

The reform of the distributions framework proceeds from April 2028, with draft legislation in 2027. Capital reduction demergers will no longer be possible, statutory demergers are to be extended to investment companies, and purchase of own shares conditions will be rewritten. Genuine family succession is to be protected. Owner-managers considering a demerger, buy-back or reorganisation should plan before 2028.

Sole traders and the self-employed

• Trading allowance up to £3,000 and the higher-mileage rate up to 35p from April 2027; Class 2 and Class 4 NIC rates unchanged.
• MTD for Income Tax: no late submission penalty points for 2027-28 quarterly updates for those joining in April 2027.
• The Chancellor also announced living-cost support for young founders; no details have been published.

To ensure we can support you efficiently and keep you fully compliant, you will need to adopt one of the following methods for providing us with your rental income and expenditure records each quarter.

Impact on Business

Corporation tax stays at 25% (19% small profits rate), now confirmed to April 2029, and employer NIC is unchanged at 15% with a £10,500 Employment Allowance. The business measures are about the timing of capital allowances, employment costs, VAT collection and a heavier compliance agenda.

Capital allowances: faster relief on new kit, slower on everything else

• Main rate first-year allowance up from 40% to 50% for expenditure on or after 1 January 2027 (not second-hand assets or cars).
• Main rate writing-down allowance down from 14% to 12% from 1 April 2027 (6 April for income tax), including existing pool balances.
• Full expensing and the £1 million Annual Investment Allowance are unchanged.

For most owner-managed companies spending under £1 million a year the AIA still gives 100% relief in year one. The WDA cut bites on large unrelieved pools, on cars and on second-hand plant; where major purchases are planned, the 1 January 2027 date matters.

Employers

• National Living Wage up 3.9% to £13.21 from 1 April 2027 (18 to 20 rate £11.27; 16 to 17 and apprentice rate £8.31).
• Mandatory payrolling of company cars, vans, fuel and medical benefits from 6 April 2027, and all other benefits from 6 April 2028, with Class 1A NIC moving to in-year payment.
• Employer-paid Immigration Skills Charge and Certificate of Sponsorship fees are not taxable benefits from 28 October 2026, and the tax treatment of termination payments is to be clarified from the same date.
• The government will legislate to stop non-compete clauses blocking job moves, with proposals in early 2027.

VAT

• Online marketplaces will account for VAT on sales by UK businesses selling £90,000 or more a year through that platform from October 2027. The test is per platform and separate from the registration threshold; B2B, personal and second-hand sales are excluded.
• From April 2027 overseas suppliers of services to non-VAT-registered UK businesses must register and charge UK VAT; the reverse charge applies only to registered recipients.
• Land sold to registered providers of social housing is zero-rated from 1 April 2027.
• E-invoicing becomes mandatory from April 2029, when VAT and PAYE must also be paid by direct debit. Larger private hire operators become liable for VAT on full fares from 2 January 2028.

Business rates (England)

The small business relief threshold for retail, hospitality and leisure premises rises from £12,000 to £18,000 rateable value from April 2027, excluding vape shops and adult gaming centres. The 2027-28 RHL multipliers are 44.7p and 39.7p, against 49.7p and 44.7p for other properties and 52.5p above £500,000. The government also proposes a general anti-avoidance rule for business rates.

Corporate tax measures

• R&D relief: the Claim Notification Form is scrapped for claims from 1 April 2027 and the Additional Information Form simplified from autumn 2027.
• The foreign permanent establishment exemption becomes mandatory for periods beginning on or after 1 January 2027, so overseas branch losses can no longer shelter UK profits.
• Withholding tax on UK interest paid overseas rises from 20% to 24% from April 2027, and the bank surcharge doubles to 6% from 1 January 2027 to 31 March 2028.
• A consultation on corporate tax simplification is open, and groups within transfer pricing rules will file an International Controlled Transactions Schedule for periods from 1 January 2027.

Compliance

A statutory duty to correct errors (with HMRC correction notices) applies from 1 April 2028; HMRC will recover lower-value debts directly from bank accounts from July 2029 and recruit 670 more compliance officers. Deliberate defaulters face wider publication and the promoters regime is strengthened.

Impact on Property

There is no increase in capital gains tax on property and no change to Stamp Duty Land Tax rates or bands. The Autumn Budget 2026 is defined for property owners by one measure: income tax on rental income rising to 24%, 44% and 49% from 6 April 2027.

Landlords: property income tax from April 2027

Individual landlords in England, Wales and Northern Ireland will pay 24%, 44% or 49% on net rental profits, 4 points above the rates on earnings. The finance cost tax reduction rises in step to 24%, which partly offsets the increase for geared landlords. The OBR regards the yield as highly uncertain and thinks the rise is more likely than not to push up rents over time.

The gap to the 25% corporation tax rate will revive interest in incorporating rental businesses. Incorporation carries CGT, SDLT and financing consequences, and the distributions reforms from April 2028 will end capital reduction demergers (while extending statutory demergers to investment companies), so it should not be driven by the rate differential alone.

Stamp Duty Land Tax

• Residential rates unchanged: 0% to £125,000, 2% to £250,000, 5% to £925,000, 10% to £1.5 million and 12% above, plus the 5 point additional property and 2 point non-resident surcharges.
• No SDLT arises on rent under assured shorthold tenancies (from 1 May 2026), removing a concern that followed the Renters’ Rights Act.
• Group relief is clawed back from 29 October 2026 where the buyer company leaves the group within three years, even if the vendor has been wound up.

Home buyers

• First Time Buyer ISA from April 2029: 25% government bonus (up to a £20,000 maximum) on a first home worth up to £450,000; LISA property-cap withdrawal charge cut to 20% from 29 October 2026.
• £4.7 billion for the Your First Home scheme, estimated to help around 70,000 first-time buyers, and £1.5 billion for social and affordable housing.

Higher-value and enveloped property

• The High Value Council Tax Surcharge on homes worth £2 million or more in England remains scheduled for April 2028; no wealth or property value tax was announced.
• ATED charges rise 3.5% from 1 April 2027 (for example £9,750 for the £1 million to £2 million band).

Developers and commercial property

• Land sold to registered providers of social housing is zero-rated from 1 April 2027, removing the need to wait for “golden brick” stage; any clawback where land is later used for market housing is still to be confirmed.
• Business rates relief for retail, hospitality and leisure premises extends to rateable values up to £18,000 from April 2027, alongside a proposed general anti-avoidance rule for business rates.