Autumn Budget 2026

The Autumn 2026 Budget brings a mixture of help with running costs and further tax increases for
people receiving income from savings or property. There is targeted support for the high street, higher
minimum wages and several changes to the way businesses will report and pay tax.

For small business owners, the effect will depend on how the business operates and how money is
taken out. A shop or cafe may benefit from business rates support, while an employer will need to
budget for higher wages.

The main rates of income tax on earnings, dividend tax, National Insurance, VAT and Corporation Tax
have not increased in this Budget. However, unchanged rates do not necessarily mean an unchanged
tax bill. Frozen allowances and higher income can still lead to more tax being paid.

We have set out the announcements most relevant to businesses and individuals in our community,
together with a reminder of changes already scheduled for April 2027.

In particular, property and savings tax rates were already due to increase by two percentage points in
April 2027. Today’s Budget adds a further two percentage points. The planned reduction in the cash
ISA limit for under-65s, by contrast, will no longer go ahead.

As always, the announcement is the starting point. Some measures require legislation, consultation or
further guidance.

The practical question is what these changes mean for your own business, household and plans for
the next few years. A review before the tax year ends will be more useful than reacting to an
individual headline.

Already scheduled for April 2027
These changes were announced before today’s Budget.

Making Tax Digital for Income Tax
Individuals with more than £30,000 of combined qualifying gross self-employment and property
income in 2025/26 are due to join from 6 April 2027. This uses income before expenses, not profit.

It was confirmed in the Autumn Budget 2026 that those required to join in April 2027 will not receive
late-submission penalty points for their first four quarterly updates for 2027/28.

Mandatory payrolling of benefits
From 6 April 2027, mandatory payrolling covers company cars, vans, car and van fuel, and employer provided
medical benefits. Most remaining benefits follow in April 2028. Loans and accommodation
remain outside.

Inheritance Tax on unused pensions
For deaths on or after 6 April 2027, most unused pension funds and pension death benefits will form
part of the estate for Inheritance Tax. Exceptions and normal exemptions apply, including the
spouse/civil partner exemption. Registered scheme death-in-service benefits are excluded.

State Pension and retirement
A new Pension Tax Allowance from 6 April 2027 to 5 April 2030 protects eligible people over State
Pension age with total income up to the full new State Pension. It is not an increase in everybody’s
Personal Allowance.

Changes announced: business costs

National Living Wage and National Minimum Wage
The hourly minimum rates will rise by 3.9%, subject to rounding, from 1 April 2027. Employers should
allow for the effect on National Insurance and pension contributions as well as the wage itself.

A 50p hourly increase means £975 more gross pay a year for someone paid for 37.5 hours a week
over 52 weeks. Employer costs are additional. The apprentice rate applies to under-19s and those
aged 19 or over in their first apprenticeship year. Other apprentices receive the relevant age rate.

Business rates: retail, hospitality and leisure
From 1 April 2027, qualifying retail, hospitality and leisure properties in England will receive full Small
Business Rate Relief up to a rateable value of £18,000, increased from £12,000. Tapered relief will
extend to £21,000, up from £15,000. These higher limits are not a general increase for every type of
business premises with vape shops and adult gaming centres being specifically mentioned as not
eligible.

Business mileage
The 55p per mile rate for the first 10,000 qualifying business miles becomes permanent. The rate
above 10,000 miles rises from 25p to 35p from 6 April 2027.
At 15,000 miles, the 2027/28 amount is £7,250, £500 above 2026/27.

Changes announced: investment and administration

Trading allowance and capital allowances
The trading allowance rises from £1,000 to £3,000 from 6 April 2027 for qualifying trading income. It is
generally an alternative to claiming actual expenses.
The main-rate first-year capital allowance rises from 40% to 50% for qualifying expenditure from 1
January 2027. The main writing-down allowance falls from 14% to 12% from 1 April 2027 for
Corporation Tax and 6 April 2027 for Income Tax.

Business sales and employee ownership incentives
The lifetime gains limit for Business Asset Disposal Relief falls from £1 million to £500,000 from 6
April 2027. The qualifying tax rate remains 18%.

A new Founders’ Relief proposes a 10% Capital Gains Tax rate on up to £10 million of lifetime gains
for qualifying founders of high-growth, innovative companies. This is for qualifying disposals from 6
April 2027. This is under consultation and first review of this area implies it may be difficult for most
taxpayers to be eligible.

The government also plans to remove the R&D claim notification form from 1 April 2027 and simplify
the Additional Information Form. However, eligibility and evidence requirements remain.

A pilot scheme entitled Young Entrepreneurs Allowance was announced to support successful young
people in their first year of starting a business. Details are fairly limited on this at present.

Reporting and paying tax
From April 2029 taxpayers already making Self Assessment payments on account will make more
regular in-year contributions. This has long been rumored with the introduction of Making Tax Digital
for Self Assessment this year but had previously been denied. The mechanisms of this have still yet
to be decided.

HMRC have been given more powers to collect taxes. Businesses must set up direct debit
instructions for VAT and PAYE liabilities from 2029, while retaining the ability to pay earlier by other
methods.

A quick comment by the Chancellor mentioned company distribution reforms are planned. The budget
notes state these are planned for April 2028, with draft legislation due in 2027. This could potentially
have a big effect on the way owners of limited companies are currently extracting their funds.

Changes announced: personal and household finances

Property and savings income
From 6 April 2027, personal income tax rates on property and savings will be 24%, 44% and 49%
across the UK. These replace the 22%, 42% and 47% rates already planned for April 2027 and are up
from the 2026/27 rates are 20%, 40% and 45%.

For £20,000 taxable within one band, the increase from 2026/27 means £800 more tax a year. These
are personal tax rates, not the rates on income earned inside a company.

Cash ISAs and buying a first home
The cash ISA limit stays at £20,000 for everyone, within the overall annual ISA allowance. The
planned £12,000 cash limit for under-65s from April 2027 will not proceed. The Personal Savings
Allowance remains £1,000 for basic-rate taxpayers and £500 for higher-rate taxpayers; additional-rate
taxpayers have no allowance.

The new Your First Home scheme in England will offer eligible first-time buyers up to 20% equity
loans, with first loans planned from April 2027. Household income and local property-price caps apply.
A new First Time Buyer ISA is planned from April 2029. From 29 October 2026, qualifying Lifetime
ISA withdrawals to buy a first home above £450,000 will face a reduced 20% charge rather than 25%.
This is still a charge, and qualifying conditions matter.

Energy bills and family support
The temporary 0% domestic electricity VAT rate extends to 1 July 2027 and the gas standing charge
on domestic energy bills is being removed.

A £100 Household Energy Payment is planned from January 2027 for households in England in
council tax bands A-D which will be payable back into the payer’s bank account.

Eligible self-employed fathers, partners and adopters in Great Britain will gain access to a new
parental allowance from April 2029.

What didn’t change

The following headline rates and allowances remain in place after today’s Budget. This comparison is
with the current 2026/27 position, rather than with the position before last year’s Budget.

Effects in our local community and advice

For Eastbourne, the impact will vary across our high street, hospitality businesses, trades,
professional services and households. The following are practical implications of the announcements.

Shops, cafes, pubs and visitor businesses
Business rates support may help eligible premises, but the higher minimum wage means the overall
cost budget still needs reviewing. Check relief against the property’s rateable value and council bill.

Trades and employers
Higher mileage rates may help qualifying users of their own cars or vans. Businesses planning asset
purchases should check capital allowances.

Owners, landlords and people planning retirement
Higher personal savings and rental income rates can reduce take-home income even where the
business itself pays the same tax rates. Prospective business sellers should review the smaller BADR
limit early. Pension inheritance changes mean family estate planning should include pension funds as
well as property and investments.

Advice from Dominic Hill Chartered Accountants
Having a cash-flow forecast both when a business is successful but also in times of trouble is
essential.

It is important to review margins by job or service and chase overdue invoices regularly. Know your
break-even sales level and the cash needed for owner drawings, loan repayments and tax.

Set aside upcoming tax payments. This is where a lot of business owners come unstuck. Borrowing
from future tax payments to fund today’s activities and then finding it difficult when those payments
become due.

Turnover is not the same as cash. Busy is not always profitable. Up-to-date information makes it
easier to decide whether prices, costs or payment terms need to change.

Conclusion

This Budget gives some welcome support to qualifying high street businesses and households, while
increasing the tax paid on personal savings and property income. Employers will need to allow for
higher wages, and owners considering a business sale will need to plan ahead.

The absence of increases in the rates of salary tax, dividend tax, VAT, National Insurance and
Corporation Tax should not be overlooked. Unchanged rates do not remove the need to review frozen
thresholds or rising costs.

Some announcements still depend on legislation, consultation or further guidance. If you are
concerned about anything in this report or in the media, please discuss your circumstances with your
accountant before taking action.

If you would like to speak to anyone at Dominic Hill Chartered Accountants, please contact us on
info@dominichill.co.uk or 01323 649509.