The Autumn Budget 2026 was delivered on Wednesday 28 October 2026 by the Chancellor of the Exchequer, the Rt Hon John Healey MP, under the banner "Breathing space for today, fresh hope for the future". The headline is what did not happen: there was no increase to the main rates of income tax, National Insurance or VAT. Instead the Chancellor leaned on cost-of-living measures, a business rates shake-up and a handful of targeted reliefs that matter to smaller firms.
This guide pulls out the measures that actually affect small businesses, directors and the self-employed, with the figures and dates taken straight from the Budget documents on GOV.UK. It replaces our pre-Budget preparation guide now that the announcements have been made. Most changes take effect from 6 April 2027, so you have time to plan, but a few start sooner.
What was announced in the Autumn Budget 2026?
The Autumn Budget 2026 raised no headline rates of income tax, National Insurance or VAT, and the government says 84% of taxpayers see no change to their bill. The measures that matter most to smaller firms are a business rates package for the high street, a bigger trading allowance, a new 10% Capital Gains Tax rate for founders, and an extended VAT cut on electricity.
| Measure | What changed | From |
|---|---|---|
| Headline income tax rates | No increase; thresholds stay frozen to April 2031 | No change |
| Corporation Tax | Main rate capped at 25% for this Parliament | No change |
| Trading allowance | Set to triple from £1,000 to £3,000, subject to Finance Bill 2026-27 | 6 April 2027 |
| Business rates (England) | Small Business Rate Relief threshold raised; retail, hospitality and leisure frozen in real terms | From 2027 |
| Founders Relief (CGT) | New 10% rate on up to £10m of lifetime gains | Budget 2026 |
| VAT on electricity | Temporary cut extended | To 1 July 2027 |
| National Living Wage | Rises 3.9% to £13.21 an hour | 1 April 2027 |
The full detail sits in the GOV.UK Budget 2026 summary and the Budget 2026 in full collection. The sections below take each theme in turn.
Did the Autumn Budget 2026 raise income tax?
No. The Budget made no increase to the headline rates of income tax, and the government says 84% of taxpayers see no change. Income tax thresholds stay frozen to April 2031, so fiscal drag keeps pulling pay rises into higher bands, and the rates on savings and property income are set to rise by a further two percentage points from April 2027.
For company owners the position is steady rather than generous. The personal allowance stays at £12,570, higher-rate tax still starts at £50,271, and income tax rates and bands are unchanged. Because the bands are frozen, our guide to fiscal drag and frozen thresholds still applies in full. Dividend tax rates were not changed this year, so the 2026/27 rates of 10.75% (basic), 35.75% (higher) and 39.35% (additional) carry on, as set out in our dividend tax guide. The tax rates on savings and property income rise again from April 2027, which matters if you hold a buy-to-let or large cash balances.
What is the new trading allowance from April 2027?
From 6 April 2027 the trading allowance is set to triple from £1,000 to £3,000, subject to Finance Bill 2026-27. Anyone with casual or side income, from reselling on Vinted to freelance design, would be able to earn up to £3,000 a year tax-free without reporting it. The government expects this to take several hundred thousand people out of Self Assessment altogether.
This is the clearest win for anyone starting out or running a side hustle alongside a job.
Worked example. Priya earns £2,500 from a weekend craft business on top of her salaried job. Under the current £1,000 trading allowance, £1,500 of that is taxable: at the 20% basic rate she pays £300, and she must file a tax return. From 6 April 2027 the £3,000 allowance covers the whole £2,500, so her tax on it falls to £0 and she no longer needs to register for Self Assessment. A higher-rate taxpayer in the same position saves £600.
The Budget also made the tax-free mileage rates permanently higher, which the government says helps around 2 million employees and 1 million self-employed people who use their own vehicle for work. Both measures are confirmed in the Budget 2026 document.
What did the Budget do for business rates?
The Budget rebuilt business rates around the high street in England. The Small Business Rate Relief threshold was raised so that around 70,000 more retail, hospitality and leisure businesses pay no business rates at all, and those properties get a two-year freeze in real terms. Pubs and most live music venues get an extra 20% cut from April 2027.
The detail, from the Budget 2026 document and the GOV.UK guide to Small Business Rate Relief:
- Around half of all retail, hospitality and leisure properties will pay no business rates.
- Vape shops and adult gaming centres lose access to certain reliefs.
- A 1p supplement is extended to the businesses whose bills fall or rise by less, to help fund the package.
- These changes apply in England only; Scotland, Wales and Northern Ireland set their own rates.
If you run a shop, cafe or other premises through a company, it is worth checking your rateable value and reliefs with your accountant. Our team supports limited companies with exactly this kind of review.
How does Founders Relief change Capital Gains Tax?
The Budget introduced a new Founders Relief: a 10% Capital Gains Tax rate on up to £10 million of lifetime gains for eligible founders of high-growth, innovative companies. It sits alongside the existing CGT regime and is aimed at rewarding people who build and then sell a qualifying business, rather than everyday disposals of shares or property.
For most owners the standard rules still apply: the annual exempt amount is £3,000 for 2026/27, with CGT on shares and most assets at 18% within the basic-rate band and 24% above it, as set out in the GOV.UK Capital Gains Tax rates. Our complete guide to Capital Gains Tax explains how a disposal is taxed and when Business Asset Disposal Relief or the new Founders Relief might apply.
What changed for VAT?
VAT rates were left alone, but three changes affect smaller traders. The temporary VAT cut on domestic electricity bills is extended to 1 July 2027, which the government says keeps around £50 off the typical annual bill. From October 2027 online marketplaces must collect VAT on qualifying sales made by UK businesses on their platforms, and larger private hire operators must account for VAT on the full fare.
The marketplace change is the one for ecommerce sellers to watch. It shifts the VAT-collection duty onto the platform for some UK-business sales, in the same way it already works for many overseas sellers. If you sell through a marketplace, read our ecommerce VAT registration guide and keep an eye on how each platform implements it. The extended electricity cut is covered in our note on the electricity VAT cut.
What help is there with energy and running costs?
Energy support was a centrepiece. From April 2027 a new British Industrial Competitiveness Scheme cuts electricity bills by up to 25% for more than 10,000 eligible businesses. Households are not forgotten either: up to 20 million homes in council tax bands A to D in England receive a £100 Household Energy Payment in 2027, and the planned gas levy to fund hydrogen was scrapped.
On motoring costs, the 5p fuel duty cut was extended for a further six months and the inflation-linked rise was deferred to 1 July 2027. The government also plans to move gas standing charges into unit rates rather than a fixed daily charge. These are confirmed in the GOV.UK Budget 2026 summary.
What changed for savers, pensioners and wages?
There was a notable U-turn on ISAs: the cash ISA limit stays at £20,000, reversing the planned cut to £12,000, and the Lifetime ISA withdrawal charge for a first home above the £450,000 price cap fell from 25% to 20% on 29 October 2026. Other unauthorised withdrawals still carry the 25% charge. A new Pension Tax Allowance from April 2027 would mean pensioners above State Pension age with income up to the new State Pension value pay no income tax, helping around 500,000 people. The National Living Wage rises 3.9% to £13.21 an hour.
| Measure | Detail | From |
|---|---|---|
| Cash ISA limit | Stays at £20,000 (planned cut to £12,000 dropped) | No change |
| Lifetime ISA charge | Charge cut to 20% for a first home above the £450,000 cap | 29 October 2026 |
| Pension Tax Allowance | Pensioners up to the new State Pension value pay no income tax | April 2027 |
| National Living Wage (21+) | Up 3.9% to £13.21 an hour | 1 April 2027 |
If you employ staff, the wage rise is the one to budget for now: our guide to the April 2027 minimum wage rates runs the numbers for an employer. The Pension Tax Allowance is explained in the GOV.UK Pension Tax Allowance explainer, and if you are topping up your own pension, see how pension tax relief works. The current wage floor is also confirmed on GOV.UK national minimum wage rates.
What should small businesses do now?
Nothing in the Budget needs an overnight reaction, because almost everything starts from April 2027. The sensible approach is to plan around the announced changes, keep using this year's allowances, and revisit your salary and dividend mix before the new tax year. A short review now beats a scramble in March.
- If you run a shop or premises, check your rateable value and reliefs for 2027/28.
- If you have side income, note that the £3,000 trading allowance may take you out of Self Assessment from April 2027.
- Directors should re-run their salary versus dividends split, using our salary and dividend optimiser.
- Use your £3,000 Capital Gains Tax exemption and £20,000 ISA allowance before 5 April 2027.
- Employers should model the National Living Wage rise into 2027 payroll costs.
Our tax planning service can map these changes onto your own numbers.
Book a Budget review
If you want a second pair of eyes on what the Autumn Budget 2026 means for your business, our CIMA-regulated team can run a quick review of your rates, allowances and salary mix and flag what to action before April 2027. Book a free call with Zmartly and we will turn the announcements into a short, practical plan.
Frequently asked questions
What was announced in the Autumn Budget 2026?
The Autumn Budget 2026, delivered on 28 October 2026 by Chancellor John Healey, raised no headline rates of income tax, National Insurance or VAT. The main measures for smaller firms were a business rates package for the high street, a bigger £3,000 trading allowance from April 2027, a new 10% Founders Relief for Capital Gains Tax, and an extended VAT cut on electricity.
Did the Autumn Budget 2026 raise income tax?
No. There was no increase to the headline rates of income tax, and the government says 84% of taxpayers see no change. Thresholds stay frozen to April 2031, and the tax rates on savings and property income are set to rise by a further two percentage points from April 2027.
What is the new trading allowance from April 2027?
From 6 April 2027 the trading allowance is set to triple from £1,000 to £3,000, subject to Finance Bill 2026-27. That would let you earn up to £3,000 a year of casual or trading income tax-free without reporting it, which would take many people with small side incomes out of Self Assessment.
Did the Budget change the cash ISA limit?
Yes, but in savers' favour. The planned cut to £12,000 was dropped, so the cash ISA limit stays at £20,000. The Lifetime ISA withdrawal charge was also cut to 20% for a first home above the £450,000 price cap, from 29 October 2026.
When do the Autumn Budget 2026 changes take effect?
Most measures start from 6 April 2027, including the trading allowance and the higher savings and property income tax rates. Some start sooner: the Lifetime ISA change applied from 29 October 2026, and the extended electricity VAT cut runs to 1 July 2027.
Sources
- GOV.UK: Budget 2026 summary (Breathing space for today, hope for the future)
- GOV.UK: Budget 2026 document (HTML)
- GOV.UK: Budget 2026 in full
- GOV.UK: Pension Tax Allowance explainer
- GOV.UK: Income Tax rates and Personal Allowance
- GOV.UK: Capital Gains Tax rates
- GOV.UK: Small Business Rate Relief
- GOV.UK: National Minimum Wage rates
