Autumn Budget 2026: Key Announcements, Tax Changes and Financial Implications

Landlords and savers: the biggest change in this Budget

From 6 April 2027, income from property and savings is taxed at its own, higher rates.

Budget 2025 had already set these at 22%, 42% and 47%. This Budget adds two more points on top.

Savings rates apply across the whole UK. Property rates apply in England, Wales and Northern Ireland; Scotland and Wales have been given the power to set their own.

What it costs a landlord

Illustrative figures, assuming the landlord stays a higher-rate taxpayer and rental profits are unchanged:

About half of that increase was already announced in 2025. The other half is new.

One detail that softens it for mortgaged landlords

Finance cost relief stays aligned to the property basic rate. The tax reducer on mortgage interest therefore rises to 24% for 2027-28, rather than the 22% Budget 2025 implied.

The underlying restriction on deducting finance costs is unchanged, and the reducer stays at 20% for 2026-27. This is confirmed in HM Treasury’s Budget 2026 policy costings rather than in the main tax documents, so it is easily missed.

Most savers will not notice

ISAs and the Personal Savings Allowance already shelter most interest. The Chancellor said 88% of people will pay no more tax on their savings; the Budget report separately puts it at 84% of income tax payers once property income is included.

To put a number on it: £40,000 in a non-ISA account paying 4% earns £1,600 of interest. After a £500 Personal Savings Allowance, a higher-rate taxpayer pays about £44 a year more than today.

Frozen thresholds do the quiet work

The Personal Allowance stays at £12,570 and the higher-rate threshold at £50,270 until April 2031.

As rents and interest rates rise, more landlords and savers drift into the 44% band without any further rate change. For anyone near £50,270 of total income, that drift matters more than the headline rise.

Side incomes: three times more room before you report

The Trading Allowance rises from £1,000 to £3,000 on 6 April 2027. The Self Assessment reporting threshold for trading income rises to match.

If your trading income is fully covered by the allowance, you no longer declare it or pay tax on it. For someone tutoring at weekends, selling crafts or doing occasional freelance work, that can mean no tax return at all.

One caveat: if your expenses come to more than £3,000, you are still better off claiming actual costs instead of the allowance. The allowance is an alternative to deducting expenses, not an addition.

Pensioners: a new allowance, but only for three years

The full new State Pension is set to rise above the frozen £12,570 Personal Allowance. Without action, pensioners with no other income would have been drawn into Simple Assessment for very small amounts of tax.

The new Pension Tax Allowance prevents that from 6 April 2027. How it works:

• Its value is 20% of the gap between the full new State Pension and the Personal Allowance
• It is withdrawn at £1 for every £3 of total income above the level of the full new State Pension
• It is available for 2027-28, 2028-29 and 2029-30 only

The taper is the point to watch. A pensioner with a private pension, rental income or savings interest on top of the State Pension will see the allowance reduced or lost, so it should not be read as a blanket exemption for everyone over State Pension age.

Selling a business: one relief shrinks, another arrives

Business Asset Disposal Relief halves

The lifetime limit falls from £1,000,000 to £500,000 for qualifying disposals made on or after 6 April 2027. The 18% rate within the limit is unchanged.

The Chancellor said three in four claimants are unaffected, which fits with most claims falling below £500,000.

If you expect qualifying gains above that, timing now matters. OOTLAR confirms special provisions for contracts entered into but not completed before 6 April 2027, and for certain share reorganisations and securities exchanges. These are anti-forestalling rules, so signing a contract early does not automatically lock in the old limit — take advice before committing.

Founders’ Relief: 10% on up to £10m

A new relief gives a 10% Capital Gains Tax rate on up to £10 million of lifetime gains, for qualifying disposals of shares or securities from 6 April 2027.

It is aimed squarely at high-growth companies, and the published conditions are demanding — minimum shareholding, holding period, residence and company scale tests all apply. The £10 million limit is also reduced by Business Asset Disposal Relief and Investors’ Relief claimed from 6 April 2027.

The rate and the cap come from the technical consultation, which closes on 30 November 2026, rather than from final legislation. Until Finance Bill 2026-27 is amended, these are proposals. No transaction should be structured on the assumption that the relief will be available.

Employers: the payroll changes to plan for now

Wages rise 3.9% from 1 April 2027

The direct cost is 50p an hour for each worker on the National Living Wage, plus employer National Insurance and pension contributions on top.

The larger cost is usually indirect. When the floor rises, supervisors and team leaders expect their differential maintained, and that pressure runs up through the pay structure. Retail, hospitality and care employers should model the whole wage bill, not just the staff on the minimum.

Payrolling benefits in kind becomes mandatory

This is the change that needs the most preparation, and it arrives in two stages:

For most benefits this ends the annual P11D. It also changes cash flow: Class 1A National Insurance on payrolled benefits moves into the payroll cycle rather than a single payment after the year end, though HMRC’s technical note keeps a 22 July settlement for any extra Class 1A from the end-of-year update.

Employees feel it too. Tax on their benefits is spread across the year in their pay, instead of being collected through a tax code adjustment. Worth telling staff before April 2027, not after the first payslip.

Mileage and National Insurance

The Approved Mileage Allowance Payment for business miles above 10,000 rises from 25p to 35p on 6 April 2027, with a matching National Insurance disregard. The first 10,000 miles stay at the standard rate.

For 2027-28, the Class 1 Lower Earnings Limit becomes £6,916 a year (£133 a week) and the Class 2 Small Profits Threshold £7,355. Voluntary Class 2 rises to £3.80 a week and Class 3 to £19.05. Every other National Insurance limit stays at 2026-27 levels until 2030-31.

Two more changes in 2028

• Benchmark scale rates for subsistence are modernised to £20 (over five hours), £60 (over ten hours) and £75 (over 24 hours)
• The £2,500 Self Assessment threshold for employment expenses is removed, so more employees claim relief through PAYE instead of filing a return

Limited companies: better relief now, less later

Corporation Tax is unchanged

The main rate stays at 25% and the small profits rate at 19% for the financial year beginning 1 April 2028. Full expensing continues.

The capital allowances trade

Two changes pull in opposite directions:

• The main rate first-year allowance rises from 40% to 50% for expenditure incurred on or after 1 January 2027
• The main rate writing-down allowance falls from 14% to 12% from 1 April 2027 for Corporation Tax and 6 April 2027 for income tax

More relief comes in year one and less in the years after. Total relief over an asset’s life is broadly similar, but the timing improves for businesses investing now.

The practical point: if significant plant and machinery spending is planned for late 2026, check whether it can fall on or after 1 January 2027 instead.

Business rates in England

From April 2027, for qualifying retail, hospitality and leisure properties:

The government estimates 70,000 more businesses in those sectors will pay no rates at all. Eligible properties that do not qualify for small business rate relief have their bills capped by CPI for 2027-28 and 2028-29, so none faces an above-inflation rise.

Two exclusions: adult gaming centres and vape shops lose eligibility for the retail, hospitality and leisure multipliers from April 2027. Vape shops also lose small business rate relief; adult gaming centres keep it, but on the existing £12,000 and £15,000 thresholds.

Business rates are devolved, so this applies in England only.

R&D claims get simpler, but not yet

The claim notification form requirement is removed for claims made on or after 1 April 2027, and the additional information form is simplified from autumn 2027.

Until then, nothing changes. The existing notification deadlines still apply, and missing one still invalidates the whole claim.

VAT and HMRC compliance

VAT thresholds are unchanged

Registration stays at £90,000 and deregistration at £88,000 for 2027-28. Three other VAT measures are worth knowing about:

• Online marketplaces become liable for VAT on sales by UK sellers, intended from October 2027. It covers UK VAT-registered businesses and other UK businesses above a per-platform sales threshold indicated as £90,000. Personal sales, second-hand goods and business-to-business transactions are excluded. Both the threshold and the start date will be set by secondary legislation in 2027.
• The reverse charge for business-to-business services from overseas is restricted from April 2027, applying only where the UK recipient is VAT registered. Overseas suppliers must charge UK VAT to non-registered UK businesses.
• 0% VAT on domestic electricity is extended to 30 June 2027.

Making Tax Digital for Income Tax

April 2027 brings in the £30,000 income band. For that group, there will be no late-submission penalty points on quarterly updates for 2027-28.

Read that carefully: it is an easement on penalties, not on obligations. Quarterly updates still have to be filed before the return can be submitted. New exemptions are also being legislated for those eligible for qualifying care relief, non-UK resident entertainers and sportspeople, and expected non-resident customers.

HMRC is getting more resource and more powers

• Funding for a further 670 compliance officers, on top of the 5,500 already committed by 2029-30
• A new power to recover lower-value tax debts directly from bank accounts, after standard collection has been exhausted
• From 1 April 2028, a duty on taxpayers to correct inaccuracies, plus a new Customer Correction Notice requiring a taxpayer to check and either correct or explain
• A published multi-year plan to modernise HMRC’s approach to wealthy taxpayer compliance

The direction is consistent: earlier intervention, more data, and less tolerance for returns left uncorrected.

Administrative deadlines to diarise

These are the compliance dates that require system or process changes rather than a rate adjustment.

What to review before April 2027

• Landlords: recalculate projected rental profits at 24%, 44% and 49%, and check whether the extra four points change the balance between holding property personally and incorporating. Incorporation carries Stamp Duty Land Tax and Capital Gains Tax consequences of its own, so the comparison should be run on actual figures rather than headline rates.
• Savers: use the full £20,000 ISA allowance where cash is held outside a tax wrapper, now that the planned cut to the cash ISA limit will not proceed.
• Business owners: if a sale is contemplated, quantify the effect of the lower Business Asset Disposal Relief limit and take advice before signing anything, given the anti-forestalling provisions.
• Employers: confirm your payroll software can payroll cars, vans, fuel and medical benefits from 6 April 2027, and budget for monthly rather than annual Class 1A National Insurance.
• Companies investing in plant and machinery: check whether expenditure falls either side of 1 January 2027, when the main rate first-year allowance increases.
• Side-income taxpayers: if trading income is under £3,000 from 2027-28, a Self Assessment return may no longer be required.

What is still unresolved

Several measures were announced but not finalised. Founders’ Relief exists only as a technical consultation until 30 November 2026, with legislation to follow by amendment to Finance Bill 2026-27. The First Time Buyer ISA, which will replace the Lifetime ISA for new savers from April 2029 with a 25% bonus towards a first home worth up to £450,000, needs primary and secondary legislation. The Chancellor also referred to a new incentive for first-time stocks and shares investors, the design of which is still to be developed with industry.

The measures in Finance Bill 2026-27 are proposals until the Bill receives Royal Assent, and details can change during its passage. Scotland and Wales have been given the power to set their own property income rates, so landlords with property in those nations should wait for the respective devolved budgets before assuming the 24%, 44% and 49% rates apply to them. Business rates changes apply in England only.

Separately, the government has said it will adjust the State Pension triple lock from April 2030; that is a stated intention for a future Parliament rather than a measure in this Finance Bill.

In summary

Budget 2026 leaves earned income and dividends alone and concentrates its tax rises on savings and property income, with investment income taxed four percentage points above the main rates from April 2027. Smaller businesses gain from wider rates relief in England, a larger first-year allowance and a tripled Trading Allowance; business owners planning an exit face a tighter relief limit. The most demanding changes for many will be administrative rather than financial: mandatory payrolling of benefits from 2027, and the move to Direct Debits, more frequent Self Assessment payments and e-invoicing from 2029.

If you would like to know how these changes affect your own position, Tax Care Accountants can review your tax position, model the effect on rental profits, payroll costs or a planned business sale, and set out the steps worth taking before April 2027. Contact us to arrange a review.