UK Budget 2026
The UK Autumn Budget was announced today, 28 October 2026, by Chancellor John Healey, setting out changes to taxation, business investment and the cost of living. The announcements include new measures affecting business owners, employees, savers and pensioners, alongside changes to employer reporting requirements and minimum wage rates.
What does this mean for you?
We’ve summarised the key measures relevant to you, highlighting the changes that could affect your business, personal tax position or payroll costs, along with the dates you need to know.
Explore our overview below to understand what’s changing and how to prepare.
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Businesses
- Corporation Tax and VAT rates are unchanged
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Capital allowances: First-year allowance on qualifying expenditure increases to 50% from January 2027, while the main writing-down allowance falls to 12% from April 2027.
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Business Asset Disposal Relief (BADR): The lifetime qualifying gains limit reduces from £1 million to £500,000 from April 2027.
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Founders’ Relief: A proposed 10% Capital Gains Tax rate on up to £10 million of qualifying lifetime gains, subject to eligibility and legislation.
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Employee share schemes: The individual Company Share Option Plan limit increases to £120,000, with an extended exercise period.
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Trading Allowance: Increases from £1,000 to £3,000 from April 2027.
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Business mileage: More generous tax-free mileage rates will support employees and businesses using vehicles for work.
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Fuel costs: The 5p-per-litre fuel duty cut is extended until 30 June 2027. The 3.7p cut for specified rebated fuels, including red diesel, is also extended.
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Heating oil: Removal of the 4% kerosene tariff will benefit Northern Ireland households and businesses reliant on heating oil.
- Cybersecurity investment: £7.5 million is allocated to support cybersecurity jobs and skills in Northern Ireland.
- R&D: Removal of the requirement to submit a Claim Notification Form for R&D claims made on or after 1 April 2027, and simplification of the information required in the Additional Information Form for companies that claim R&D tax relief from autumn 2027.
- Corporation Tax and VAT rates are unchanged
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Individuals
- Savings income tax: Rates increase to 24%, 44% and 49% from April 2027.
- Property income tax: Rates increase to 24%, 44% and 49% from 6 April 2027.
- Trading Allowance: Increases to £3,000 from April 2027, alongside an increase in the Self Assessment trading income reporting threshold.
- Pension Tax Allowance: Eligible pensioners with income up to the full new State Pension level will benefit from reduced administrative burdens associated with paying small amounts of income tax.
- First-Time Buyer ISA: A new savings product offerin
g a 25% government bonus on qualifying balances, capped at £20,000, is planned for April 2029. Existing Lifetime ISA holders can continue under current rules. - Heating oil: Removal of the 4% kerosene tariff will help households that rely on heating oil.
- Fuel duty: The 5p-per-litre cut is extended until 30 June 2027.
- Food prices: Tariffs on more than 100 food products are being removed, with the government estimating savings of up to £21 annually for households.
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Reporting Obligations
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Benefits in kind: Employers must payroll most benefits and taxable expenses through Real Time Information (RTI). Company cars, vans, fuel and medical benefits are included from April 2027, with most other benefits following from April 2028, subject to exceptions.
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Employee share schemes: From April 2027, qualifying Company Share Option Plan grants will be reported through the end-of-year return.
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VAT invoicing: Mandatory electronic invoicing for VAT invoices is planned from April 2029.
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Employment expenses: The £2,500 threshold for claiming tax relief through Self Assessment will be removed from April 2028, allowing more employees to claim through PAYE.
- Self Assessment payments: More regular in-year payments are planned from April 2029 for taxpayers already using Payments on Account.
- Introduction of a general obligation on taxpayers to correct inaccuracies when they are identified, and a new power enabling HMRC to issue a Customer Correction Notice where it has reason to suspect an inaccuracy. The changes will take effect from 1 April 2028.
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National Living Wage Changes from 1 April 2027
Obviously as we trawl through the details we will see the real issues behind the headlines. When we next meet you, we will cover any important issues and if you have any questions in the meantime, don’t hesitate to contact us.