Autumn 2026 Budget Update

The Bottom Line: If you own property, have savings, or plan to sell your business one day, you’re going to be paying more tax. No major tax increases for small businesses

There are no rises to the headline rates of Income Tax, National Insurance, VAT, Corporation Tax or dividend tax. The pain is more targeted than last year.

Income from property and savings is being taxed harder, again

Last year’s Budget created separate tax rates for property income, starting from April 2027. This Budget adds a further 2% on top, so from April 2027:

• The basic property rate will be 24% (was due to be 22%)
• The higher property rate will be 44% (was due to be 42%)
• The additional property rate will be 49% (was due to be 47%)

The same 2% rise applies to tax on savings income. If you hold rental property or large cash savings personally, now is the time to look at how they’re owned.

The good news: dividend tax is unchanged this time. Last year’s rises (10.75% ordinary rate, 35.75% upper rate) have applied since April 2026. And your £20,000 ISA allowance, including for cash, stays as it is.

Selling your business one day? Less of your gain gets the tax break

Business Asset Disposal Relief (BADR) lets you pay 18% Capital Gains Tax when you sell your business, instead of the normal 24%. From April 2027, it will only cover the first £500,000 of your lifetime gains, down from £1 million. Gains above that will be taxed at 24%.

The government says three-quarters of people who claim it will still get relief on their whole gain. But if your business is worth more than that, or you’ve claimed BADR before, this could cost you up to £30,000.

• There’s a new Founders’ Relief from 6 April 2027: 10% tax on up to £10 million of lifetime gains. It’s aimed at founders of fast-growing, high-growth companies, the rules are still being consulted on, and it won’t apply to most small businesses.
• From April 2028, the rules on how money taken out of your company is taxed are being modernised, to stop complex arrangements that extract profits at lower tax rates. Genuine sales and family succession will keep their capital gains treatment.

If you’re thinking of selling or restructuring in the next few years, talk to us now about timing.

Minimum wage to go up again

From 1 April 2027, minimum wage rates rise by 3.9%:

• If you employ people aged 21 and over on minimum wage, their hourly rate goes up from £12.71 to £13.21. That’s 50p extra an hour, or about £910 a year for a full-time worker.
• Workers aged 18-20 go from £10.85 to £11.27 an hour
• Under 18s and apprentices go from £8.00 to £8.31 an hour

Income Tax and National Insurance thresholds are still frozen until 2031. As wages rise, more of your employees’ pay gets taxed, which often leads to pressure for pay rises beyond the legal minimum.

A few wins for drivers and start-ups

• Use your own car for work? The tax-free mileage rate of 55p a mile for the first 10,000 business miles is now permanent, and the rate above 10,000 miles rises from 25p to 35p.
• Starting something on the side? From 6 April 2027, the trading allowance triples from £1,000 to £3,000. That’s how much you can earn from a small side business before you pay tax on it.
• Young founder? A new Young Entrepreneurs Allowance will cover a year’s living costs for young people starting a business. Details are still to come.
• Fuel: the 5p cut in fuel duty is extended to July 2027.

New costs and admin coming your way

Keep these dates in your diary:

• April 2027: Company cars and other taxable benefits must be reported through payroll, not on P11Ds.
• April 2027: Making Tax Digital reaches sole traders and landlords earning over £30,000. If you’re still on paper or spreadsheets, now is the time to move to digital records.
• April 2027: Unused pension pots become liable for Inheritance Tax.
• October 2027: Online marketplaces (think Amazon, eBay or Etsy) will collect the VAT on sales by UK sellers who sell more than £90,000 through the platform.
• April 2028: Electric company cars start paying a mileage charge (3p per mile for EVs, 1.5p for plug-in hybrids).
• 2028: Mayors can add an overnight “visitor levy” to hotel and holiday let stays.
• April 2029: If you pay self-assessment payments on account, you’ll move to smaller, more regular payments through the year.
• April 2029: VAT invoices must be sent electronically, and NI becomes due on salary-sacrificed pension contributions over £2,000 a year.

HMRC is coming after undisclosed and unpaid tax harder

The government is funding 670 more HMRC compliance officers now, rising to 5,500 by 2029-30, and expects its crackdown to raise over £12 billion a year. HMRC is also getting a new power to take tax debts directly from people who can afford to pay but repeatedly don’t.

HMRC has announced a renewed focus on ‘wealthy’ taxpayers, being those with income over £200,000 or assets over £2million in the last three years. In practice taxpayers defined as ‘wealthy’ can expect far more scrutiny of their tax affairs. 

Action: make sure your books and records are in good order and your tax is paid on time. We can help you make sure your records would stand up to an HMRC enquiry. This applies to private individuals as well as those in business – can you evidence the source of your funds? Now is the time to take out tax investigation insurance. (We can help you with this.)

What should you do now?

• Budget for the April 2027 wage increases
• Own rental property or have large savings? Review how they’re held before April 2027 and budget for tax increases
• Thinking of selling your business in the next few years? Talk to us about the new £500,000 limit
• Sole trader or landlord earning over £30,000? Get ready for Making Tax Digital
• Consider tax investigation insurance.

The theme here is simple: most businesses get breathing space this time, but property income, savings and business sales are being taxed harder. Prepare now, before April 2027.