2026 Autumn Budget - Headline Announcements

Chancellor delivers his first Budget for ‘breathing space’

Today, John Healy delivered his first Autumn Budget in which he announced measures to provide ‘breathing space for today’ and ‘fresh hope for the future’.

Read all the headline announcements to see what this could mean for you and your business.

Income Tax & NIC

From 6 April 2027, the basic, higher, and additional rates of Income Tax on both savings and property income will increase to 24%, 44% and 49% respectively. This represents a 4% increase across each rate band (having previously been forecast to increase by 2% in the 2025 Budget) and will apply to savings income throughout the UK and property income across England, Wales, and Northern Ireland.  However, the Welsh and Scottish governments retain powers to set property rates under the devolved tax regime.

Pensions

The government will introduce a new Pension Tax Allowance from 2027/28, designed to prevent pensioners whose total income is broadly equivalent to the full State Pension from having to pay small amounts of Income Tax. The allowance will be withdrawn at a rate of £1 for every £3 of income above the qualifying threshold.

Trading Allowance

From 6 April 2027, the Trading Allowance will increase from £1,000 to £3,000, enabling individuals with modest levels of trading or miscellaneous income to earn more before becoming liable to tax.

Mileage

The Approved Mileage Allowance Payments (AMAPs) and Simplified Mileage Rates for business mileage above 10,000 miles from 25 pence to 35 pence per mile.  The changes will take effect from 6 April 2027 and will also apply to the corresponding National Insurance Contributions disregard for Relevant Motoring Expenditure (RME).

Benefits in Kind

Company cars and vans, fuel benefits and private medical insurance will be reportable through payroll from 6 April 2027, with most remaining benefits following from 6 April 2028.

National Insurance Contributions

The government will use the September Consumer Prices Index (CPI) figure of 3.5% as the basis for uprating the Class 1 Lower Earnings Limit (LEL) and Class 2 Small Profits Threshold (SPT) for the 2027 to 2028 tax year. The LEL will be £6,916 per annum (£133 per week) and the SPT will be £7,355 per annum. The remaining National Insurance limits and thresholds will, as previously announced, be maintained at 2026 to 2027 levels until the 2030 to 2031 tax year.

Share Schemes

The government will introduce a number of enhancements to the Company Share Option Plan (CSOP) and Enterprise Management Incentive (EMI) regimes from 6 April 2027, with the aim of increasing flexibility and encouraging employee share ownership.

The CSOP individual option limit will increase to £120,000, the interaction between CSOP and EMI option limits will be removed, and the CSOP exercise period will be extended from 10 to 15 years. 

The EMI rules will also be relaxed by extending the Employee Ownership Trust (EOT) exception to companies intending to become EOT controlled and increasing the post disqualifying event exercise window from 90 days to 180 days. In addition, the exclusion from the disguised remuneration rules for certain share awards and options will be extended to 15 years.

Capital Gains Tax

BADR

The Government announced a significant reduction to Business Asset Disposal Relief (BADR), with the lifetime limit on which claims may be made reducing from £1 million to £500,000 for qualifying disposals made on or after 6 April 2027.

Founders’ Relief

The Government has also launched a consultation on a new ‘Founders' Relief’, aimed at supporting founders and early-stage investors in high-growth and innovative companies. Under the proposals currently being consulted upon, qualifying founders would benefit from a 10% Capital Gains Tax rate on the first £10 million of qualifying lifetime gains. The consultation closes on 30 November 2026, with legislation expected to follow and the relief proposed to apply to qualifying disposals from 6 April 2027.

Family Succession

The government announced consultations with a view to introducing legislation from April 2028 in respect of the tax treatment on family succession arrangements. Any proposed reforms will be designed to protect capital treatment for genuine changes in ownership, including families passing down their business.

Inheritance Tax

The Finance Bill 2026-27 will tighten IHT debt deduction rules for trusts, aligning trustee liabilities with personal liabilities and extending anti-avoidance measures. Effective for deaths and chargeable events from 28 October 2026.

Corporation Tax

There were no reported changes to the rates of corporation tax which will remain at current levels for accounting periods beginning 1 April 2028.

Capital Allowances

First-Year Allowance 

Previously introduced First-Year Allowance (FYA) of 40% (available from 1 January 2026) is a relatively new incentive designed to accelerate tax relief for expenditure on main rate plant and machinery that does not qualify for full expensing or where full expensing is not claimed.

From 1 January 2027 the government will increase the main rate First-Year Allowance (FYA) from 40% to 50%.

Writing Down Allowance

From 1 April 2027 the main pool Writing Down Allowance (WDA) will be reduced from 18% to 12%

Planning point: Companies with planned expenditure should review timing. The higher upfront deduction may make expenditure after 1 January 2027 more attractive, although the reduced ongoing WDA slows relief on the remaining balance.

R&D

Claim Notification Form

From 1 April 2027, claimants will no longer have to notify HMRC in advance if they intend to make an R&D claim.

Additional Information Form

From 16 November 2026, HMRC will update the consent to communicate by email pages within the AIF. 

From Autumn 2027, HMRC will make further changes to reduce unnecessary duplication, improve the information requested on contracting and EPWs, and providing greater clarity on project information requirements and the Enhanced R&D Intensive Support intensity ratio.

Simplification of Legislation

The government is proposing to gather stakeholder views on how to simplify the R&D relief legislation to make the rules easier to comply with and better deliver the policy aims. In particular:

• The ERIS intensity ratio – clarity on the definition of the total expenditure and complexity of the aggregation rules.  
• The PAYE / NIC cap – when the exemption from this cap, which is intended to support smaller, growing businesses, may not always apply.  
• Going concern status – How a company can lose this status for technical reasons where a viable trade still exists. 

Cryptoassets

From 6 April 2027 certain cryptoasset loans and liquidity pool transactions will be treated on a "no gain, no loss" basis until an actual economic disposal occurs.

This prevents tax charges arising on temporary transfers where ownership risk remains substantially unchanged.

Directors Disqualification

From 1 April 2027 courts may disqualify individuals from acting as company directors for up to five years following conviction for certain HMRC securities-related offences.

Property Taxes

ATED

Annual Tax on Enveloped Dwellings (ATED) charges will increase by 3.5% from 1 April 2027 in line with CPI inflation, increasing the annual charge payable by companies and other structures holding high-value UK residential property.

Council Tax

The High Value Council Tax Surcharge remains scheduled for introduction from April 2028 and will apply to residential properties valued at £2 million or more. Based on previously published proposals, annual charges are expected to range from £2,500 for properties valued at £2 million up to £7,500 for properties valued at £5 million or above.

SDLT

The Government has confirmed the removal of SDLT on the rent element of assured tenancies from 1 May 2026, together with the abolition of the requirement to file an SDLT return solely because rent is payable under an assured tenancy.

Changes have also been announced to the SDLT group relief rules. From 29 October 2026, the winding up of a vendor company will no longer prevent an SDLT clawback arising where the purchasing company subsequently leaves the group within the normal three-year clawback period, strengthening the anti-avoidance provisions within the legislation.

VAT

Reverse Charge

The government will introduce legislation in Finance Bill 2026-27 to restrict the VAT reverse charge for supplies of services from overseas, so that it only applies if the receiving UK business is VAT registered.

VAT Online Marketplace Liability (OMPL) extension

With effect from October 2027, the government will introduce legislation to extend VAT online marketplace liability rules to UK businesses. Online marketplaces will be responsible for collecting VAT on sales by UK VAT registered businesses and any other UK business with a minimum annual sales threshold per platform of £90,000. The rules will not apply to non-business (i.e. personal) sales, second-hand goods, or business-to-business transactions.

Domestic Electricity

The government will extend the temporary VAT zero rate for domestic electricity supplies until 30 June 2027. A 0% rate of VAT will continue to apply to qualifying electricity supplies that would otherwise be subject to the reduced rate of 5% from 1 April 2027.

If you would like to discuss any of these matters or talk to us about your tax affairs in general, please contact our tax experts at enquiries@teamjs.co.uk.