Autumn Budget 2026 Summary
On Wednesday, 28 October 2026, the Chancellor, John healey, delivered his first Budget. The good news: the main rates of income tax, National Insurance and VAT have not gone up. The catch: if you rent out property, hold savings outside an ISA, or run and plan to sell a business, some things are changing.
Own Property or have savings?
1. Landlords: tax on your rental profit is going up again
From 6 April 2027, tax on rental profit rises by a further 2%. This means that the new rates are 24% (basic rate), 44% (higher rate) and 49% (additional rate). Last year's Budget had already planned 22%, 42% and 47%. This applies to property in England, Wales and Northern Ireland.
Example: if you make £20,000 of rental profit and all of it is taxed at the basic rate, the tax will be £4,800. Today it would be £4,000, and under last year's plan it would have been £4,400.
What to do: talk to us before April 2027 so we can work out what it means for your properties.
2. Savers: interest outside an ISA is taxed more too
The same 2% rise applies to savings interest across the UK from 6 April 2027: 24%, 44% and 49%. It only affects interest above your tax-free savings allowance.
Example: £3,000 of taxable interest at the basic rate will cost £720 in tax. Today it would be £600.
The good news: the cash ISA allowance stays at £20,000. Last year we were expecting that under-65s would be limited to £12,000 in cash ISAs from April 2027. That plan has been scrapped. Interest inside an ISA stays tax-free.
Buying a first home? A new First Time Buyer ISA arrives in April 2029, replacing the Lifetime ISA for new savers. It pays a 25% bonus towards a home worth up to £450,000. If you already have a Lifetime ISA and buy above £450,000, the charge for using it falls from 25% to 20% from 29 October 2026.
A new “Your First Home” scheme (England only) offers first-time buyers a 20% equity loan, so you only need a 2.5% deposit (up to a maximum of 15%). The loan is interest-free for five years. There are income caps of £110,000 per household (£140,000 in London) and local property price caps, so it won’t suit everyone. Pre-registration opens by the end of December 2026, full applications from February 2027, and the first loans are expected from April 2027.
3. Homes worth over £2 million
The High Value Council Tax Surcharge (the "mansion tax") still starts in England in April 2028. The Budget confirms help for owners who struggle to pay: a way to defer the bill, some discounts and exemptions. It also confirms a 100% extra charge on homes left empty for 12 months or more.
Run a business? Here is what changes
4. Selling your company? The date matters
Business Asset Disposal Relief (BADR) gives you a lower 18% rate of Capital Gains Tax when you sell all or part of a qualifying business. From 6 April 2027, the lifetime limit on gains that qualify halves from £1 million to £500,000.
Example: you sell your company and make an £800,000 gain. Sold before 6 April 2027, the tax is £144,000 (18% of the whole gain). Sold after, only the first £500,000 gets 18% (£90,000) and the other £300,000 is taxed at 24% (£72,000). That is £162,000, or £18,000 more. This assumes you have not used BADR before.
There is also a new Founders' Relief: a 10% rate on up to £10 million of lifetime gains for founders of high-growth, innovative companies, from 6 April 2027. A consultation on the rules closes on 30 November 2026, and the proposed conditions are strict. For example, you must have held a significant shareholding since inception and for five years, and the company must meet size and growth tests. Please talk to us before assuming you qualify.
What to do: if a sale is on the cards in the next couple of years, speak to us now. Timing matters.
5. Buying equipment
Most small businesses already claim 100% relief on equipment under the £1 million Annual Investment Allowance, which is not changing. The new 50% first-year allowance from 1 January 2027 only matters for companies spending more than that. The bigger change is the yearly rate for claiming relief on older equipment and the rest of your pool, which falls from 14% to 12% from April 2027 (6 April for sole traders and partnerships). In short: relief on older assets slows down. Please ask us before a big purchase.
6. VAT changes for online sellers and overseas suppliers
From April 2027: if your business is not VAT-registered and you buy services from an overseas supplier, that supplier will now have to charge you UK VAT.
From 1 October 2027: online marketplaces like Amazon and eBay must collect the VAT on sales by UK businesses that sell more than £90,000 a year through that platform. Personal sales are not affected.
7. Shops, pubs and restaurants in England: business rates help
Pubs, social clubs and most live music venues get 35% off their rates from April 2027, up from 15%.
Small shops, restaurants and leisure businesses pay no rates if their rateable value is up to £18,000 (it was £12,000). Relief tapers off up to £21,000 (it was £15,000).
Other shops, restaurants and leisure businesses will not see rates rise by more than inflation in 2027-28 and 2028-29.
Vape shops and adult gaming centres lose their reliefs.
8. Company directors and staff share options
Dividend tax rates are not changing at this Budget. They already rose in April 2026, to 10.75% for basic-rate and 35.75% for higher-rate taxpayers. From April 2028, the government will reform how company payouts are taxed. It says it will protect genuine changes of ownership, including families passing on a business. There is nothing to do now, and we will update you when the draft rules appear.
Also for employers: from 6 April 2027, company cars, vans, fuel and medical benefits must be reported through payroll (this was due a year earlier but has been delayed). All other benefits follow from 6 April 2028.
If you give your team share options, the limit per person on one type of scheme (now called EMI2) doubles to £120,000 from April 2027, and the options can last up to 15 years.
9. Mileage rates are now permanent
If you use your own car or van for work, you can claim 55p a mile tax-free for the first 10,000 business miles, and 35p a mile after that from 6 April 2027 (it is 25p until then). This applies to employees and the self-employed. This also includes directors using their own car for business use.
Example: you drive 15,000 business miles a year. Before April 2026, you could claim £4,500 on the first 10,000 miles (45p) plus £1,250 on the other 5,000 (25p), £5,750 in total. From April 2027 it is £5,500 (55p) plus £1,750 (35p), £7,250 in total. That is £1,500 more you can claim, worth about £300 less tax at the basic rate.
Other business mileage rates are unchanged: 24p a mile for motorcycles, 20p for bicycles, and 5p per passenger.
If your employer pays less than these rates, or nothing, you can claim the difference back from HMRC.
10. Side income: your trading allowance triples
From 6 April 2027, the tax-free allowance for small trading income rises from £1,000 to £3,000.
Example: if you earn £2,500 from selling things online, that income can be tax-free.
If your actual expenses are more than £3,000, you will usually be better off claiming those instead.
Starting out young? A new pilot Young Entrepreneurs Allowance (England) will help young founders with living costs in their first year of business. Details are still to come.
And for everyone else
11. Pensioners on the State Pension alone
Last year we told you the government was looking at how to stop the State Pension pulling pensioners into paying small amounts of tax. From 6 April 2027 to 5 April 2030, a new Pension Tax Allowance means pensioners whose total income is at or below the full new State Pension (£13,036) will not have tax due thereon. Those just above it get a reduced allowance.
12. Minimum wage goes up
On 1 April 2027 the National Living Wage rises 3.9%, from £12.71 to £13.21 an hour. The rate for 18 to 20-year-olds becomes £11.27, and for 16 to 17-year-olds and apprentices £8.31. Employers should budget for this now.
13. Help with energy bills and fuel
£100 payment: paid into bank accounts from January 2027 to households in England in council tax bands A to D.
Electricity VAT: stays at 0% on home electricity until July 2027. The government expects this to take about £50 off the energy price cap in April 2027.
Fuel duty: the 5p-a-litre cut is extended to 1 July 2027, and the planned increase is put off until then.
Gas standing charge: the government wants gas standing charges (about £108 a year on average) scrapped, aiming for the end of 2027 or soon after. Suppliers will recover the cost through unit rates instead, so you’ll still pay for what you use.
What has not changed, and what is coming
What has not changed
No increase to the main rates of income tax, National Insurance or VAT.
Income tax thresholds stay frozen until 2031, as announced last year. The personal allowance stays at £12,570.
No increase to corporation tax. The government says it is keeping to its Corporate Tax Roadmap.
Coming further down the road
April 2029: Tax payments are expected to become more frequent and made closer to when income is earned. VAT and PAYE will need to be paid by direct debit, and VAT invoices must be issued electronically in a standard format. Some taxpayers may face higher payments during the transition period.
April 2029: self-employed fathers, partners and adopters in Great Britain will become eligible for up to two weeks of paid parental allowance.
July 2029: HMRC will be able to take smaller tax debts straight from the bank accounts of people who can pay but repeatedly don't. The proposals suggest this would cover debts of up to £5,000 for individuals and £10,000 for companies, with 14 days’ notice first.
Not sure what this means for you? Just reply to this email or call us on 020 8342 7390, and we will talk it through.
FUSE is an independent Chartered Certified firm of accountants and tax advisors based in Highgate Village, North London. We provide a dynamic range of services to clients working in property, media, entertainment and professional services. Our clients vary in size from self employed sole traders, small enterprises and medium size businesses. We believe that comprehensive financial planning and sound business financial advice are the keys to growth and profitability.
