Autumn Budget 2026, measure by measure: what each one does, and whether it's good for UK business

Budgets are reported as a single verdict. For a business they're never one thing: the measure that helps a café in Leeds does nothing for a software company in Bristol, and the one that costs a landlord is irrelevant to a plumber. So this is the Budget taken apart, one measure at a time. For each: what it is, what it does to a business, what it does to you personally, when it starts, and a plain verdict on whether it's good for UK business.

The verdicts are ours. The facts are from the Government's own Budget documents, dated 28 October 2026, and nothing here comes from press reports or forecasts. Where a measure has a date, it's the date in the document. For the shorter, company-only summary, read what the Budget means for your limited company.

A note on the frame. The Chancellor summed up his choices in three lines: "Raising revenue from those who can afford to pay. No tax rises on wages or dividends. Cutting taxes for millions of families and businesses." The structure underneath is simple: the big business taxes are frozen, the money comes from capital gains, savings and property income, banks and compliance, and the giveaways go to high streets, drivers and the lowest paid.

Scorecard

The taxes that didn't move

Corporation Tax: 19% and 25%, limits £50,000 and £250,000

What it is. The rates and limits for 2027/28 are unchanged, and the Government commits to "maintain the main rate at 25% and the small profits rate at 19%" for the year from 1 April 2028, inside the 2024 Corporate Tax Roadmap.

Business. Nothing to recompute. A company with £60,000 of profit still pays 19% on the first £50,000 and the marginal rate on the rest. The £50,000 limit has been the same since 2023 and isn't indexed, so growing companies drift into the 26.5% marginal band without any rate rising.

Personal. None directly.

Verdict: Good. Certainty to 2029 is what small companies asked for. The quiet cost is the frozen £50,000 limit, which is a real-terms tax rise every year it stays put.

Dividend tax: 10.75%, 35.75%, 39.35%, £500 allowance

What it is. Unchanged for 2027/28. The speech says "no change to tax on income from dividends".

Business. The salary-plus-dividends model for owner-managers works the same next year. The section 455 charge on director's loans, which follows the dividend upper rate, stays at 35.75%.

Personal. Same tax on the same dividend.

Verdict: Good. Dividend tax went up last year; a second rise was the thing most directors feared. It didn't happen. See the distributions rewrite below for the thing to watch instead.

Income Tax: rates unchanged, thresholds frozen to 5 April 2031

What it is. 20%, 40%, 45%; personal allowance £12,570; basic rate band £37,700. The freeze to 2031 was set at Budget 2025 and this Budget leaves it in place.

Business. Every pay rise you give moves more of it into tax. For an employer that's pressure on gross pay to deliver the same net.

Personal. A director paying themselves £50,270 to stay under higher rate has been on the same number since 2021 and will be until 2031.

Verdict: Not good. No headline rise, but a decade-long freeze is the largest tax increase on earnings in the system, and it falls on exactly the salaries small companies pay.

Employer National Insurance: 15% above £5,000, Employment Allowance £10,500

What it is. Rate, threshold and allowance unchanged. The thresholds are "maintained at 2026 to 2027 levels until the 2030 to 2031 tax year". The Lower Earnings Limit rises from £129 to £133 a week from 6 April 2027.

Business. Last year's jump to 15% and £5,000 isn't reversed, and the £5,000 secondary threshold is now frozen for four more years, so each wage rise is taxed at 15% from the first pound above it. Employment Allowance still wipes out £10,500 of the bill for most employers with more than one earner, but not for a sole-director company.

Personal. A director on a minimal salary pitched at the LEL needs £6,916 from April 2027 for the year to count towards the State Pension.

Verdict: Mixed. No new rise is welcome; a frozen £5,000 threshold is not. Employers hoping for relief after 2025 didn't get it.

VAT threshold: £90,000 and £88,000

What it is. Unchanged, along with the 20%, 5% and 0% rates.

Business. The cliff-edge stays where it is. Businesses hovering under £90,000 keep managing turnover to stay below it, which is wasted effort for the economy and for them.

Personal. None.

Verdict: Mixed. No rise is a relief for businesses just over the line; no index-linking means the threshold keeps catching more businesses each year, and the Budget doesn't touch the design.

Investment and capital allowances

First-year allowance 40% → 50%

What it is. The main rate first-year allowance for plant and machinery rises to 50% for spending on or after 1 January 2027.

Business. Half the cost of a qualifying asset comes off taxable profit in the year it's bought, with the rest going into the main pool. For most small companies this is beside the point: the £1 million Annual Investment Allowance, which stays, already writes off 100% in year one. The 50% rate matters to businesses spending more than £1 million a year, or on assets the AIA excludes.

Personal. None.

Verdict: Good, with a small audience. Full expensing is also kept, so the investment incentives small companies actually use are intact.

Writing-down allowance 14% → 12%

What it is. The main pool writing-down allowance falls from 14% to 12% for accounting periods beginning on or after 1 April 2027 for companies (6 April 2027 for sole traders and partnerships), with a blended rate for a period that straddles the date. It was 18% until April 2026.

Business. Whatever is left in your main pool, including second-hand assets and anything bought above the AIA, is written off more slowly: 12% of the balance a year instead of 14%. The tax relief isn't lost, it's deferred, which is a cash-flow cost. The Treasury's own costings show this pair of changes raising money overall.

Personal. None.

Verdict: Not good. The headline is the 50% allowance; the money comes from the 12%. A company with a large, old pool pays more tax sooner.

Your money outside the company

Savings and property income: 24%, 44% and 49%

What it is. From 6 April 2027, interest and rental income are taxed two percentage points above the main rates, on top of the two points already announced at Budget 2025. Property rates apply in England, Wales and Northern Ireland.

Business. None for a trading company; interest the company earns is taxed at Corporation Tax rates. Landlords operating as individuals, and anyone with a rental alongside their business, pay more.

Personal. A higher-rate taxpayer with £10,000 of rental profit pays £4,400 instead of £4,000. For a basic-rate saver outside the personal savings allowance, £1,000 of interest costs £240 instead of £200. The Government says 84% of taxpayers see no increase, mostly because of the savings allowance and ISAs. The cash ISA limit stays at £20,000.

Verdict: Not good. It's targeted and it's modest, but it's a second rise in two years on the same income, and it nudges owners to keep cash inside the company rather than hold it personally, which is not obviously what anyone wants.

Business Asset Disposal Relief: lifetime limit £1m → £500,000

What it is. The 18% rate on qualifying gains when you sell or wind up a trading company now covers only the first £500,000 of lifetime gains, for disposals on or after 6 April 2027. Above that, 24%. An unconditional contract exchanged before that date but completed after it is still tested against the £500,000 cap unless the parties can show the timing wasn't for the tax advantage.

Business. A founder selling for £1 million of gain pays an extra £30,000 (6% on the second £500,000). The Chancellor's framing is "no change for 3 in 4 claimants", which is true and also means the quarter with the largest exits carry all of it. A members' voluntary liquidation after a long run is caught the same way.

Personal. It's your tax, not the company's, and it lands on the one day you cash out.

Verdict: Not good. The lifetime limit was already cut from £10 million to £1 million in March 2020, and the rate went from 10% to 14% in April 2025 and to 18% in April 2026. Halving it again, after a Budget that promises a "world-leading tax offer for founders", sends the opposite signal to the owner of a steady, profitable, unglamorous business.

Founders' Relief: 10% on up to £10 million of lifetime gains

What it is. A new Capital Gains Tax relief for "founders of, and significant early investors in, high-growth, innovative UK companies", for disposals on or after 6 April 2027. The conditions (what counts as a founder, how long you must hold, what counts as high-growth) are out for consultation until 30 November 2026. Any Business Asset Disposal Relief or Investors' Relief claimed from 6 April 2027 reduces the £10 million available.

Business. If your company qualifies, an exit at £10 million of gain costs £1 million in tax instead of £2.4 million. That's a stronger offer than BADR ever was at its most generous.

Personal. Same point: it's the founder's tax.

Verdict: Good, for a narrow group. The design question is who's in. If "high-growth, innovative" means venture-backed technology companies, the Budget has moved a tax break from the typical small-business owner (BADR) to the typical start-up founder. Watch the consultation; the definition is the policy.

Trading allowance £1,000 → £3,000

What it is. From 6 April 2027 the first £3,000 of trading or miscellaneous income is tax-free, and the Self Assessment reporting threshold for that income rises to £3,000 too.

Business. Nothing for a company. For the person with a side business, up to £3,000 a year outside the company with no return to file.

Personal. Simpler and cheaper for anyone with small side income.

Verdict: Good. Removes real admin for a lot of people and costs little.

Mileage: 35p above 10,000 miles

What it is. The tax-free rate for using your own car for work rises from 25p to 35p a mile above 10,000 business miles from 6 April 2027. The 55p rate for the first 10,000 miles, introduced in April 2026, is made permanent.

Business. Employers can pay the higher rate tax-free; it's a cost only if you choose to pay it. Self-employed people using simplified mileage get the same uplift.

Personal. A field engineer doing 20,000 business miles a year can receive £1,000 more tax-free.

Verdict: Good. The 25p rate dated from 2011; this is overdue.

Employing people

National Living Wage £13.21 from 1 April 2027

What it is. A 3.9% rise, with 18 to 20 year olds at £11.27 and 16 to 17 year olds and apprentices at £8.31.

Business. A full-time worker on the NLW costs £910 a year more in wages before employer NI and pension. With the employer NI threshold frozen at £5,000, the NI on that rise is 15%, and the rise compounds across every pay band you keep above the minimum.

Personal. Good for 2.3 million workers, in the Government's figure.

Verdict: Not good for employers' costs. Smaller than the 6.7% rise in April 2025, and above the 3.5% September inflation figure the Government used for uprating. Hospitality and care employers carry it, with the business rates relief below as partial offset in England.

Mandatory payrolling of benefits in kind

What it is. From 6 April 2027 company cars and vans, car and van fuel, and medical benefits must be payrolled and reported through RTI; most other benefits follow from 6 April 2028. Employer loans and living accommodation are excluded.

Business. No more P11Ds for those benefits, but your payroll software has to handle them every month, and the tax hits employees' pay packets in-year rather than through a tax code the following year.

Personal. Employees see the tax on a benefit straight away.

Verdict: Mixed. Less paper at year-end, more work every month, and a transition to plan now: check your payroll software can do it, and tell employees what will change on their payslips.

EMI and CSOP

What it is. From 6 April 2027 the EMI2 (formerly CSOP) individual limit rises from £60,000 to £120,000; the two limits stop interacting; the exercise period extends to 15 years; the EMI window after a disqualifying event extends to 180 days; EMI grants are notified in the end-of-year return rather than separately.

Business. More headroom to pay in options, and one fewer deadline to miss (late EMI notifications have cost companies the relief).

Personal. Employees holding options get longer to exercise.

Verdict: Good. Small, practical, and aimed at the companies that compete for staff with cash they don't have.

Property and premises

Business rates for retail, hospitality and leisure (England)

What it is. From 1 April 2027: the Small Business Rate Relief 100% threshold rises from £12,000 to £18,000 rateable value for qualifying properties (taper to £21,000); a two-year real-terms freeze on bills for other properties in the sector; the pubs, social clubs and live music venues relief rises by 20 points to 35%. Vape shops lose both the RHL multipliers and Small Business Rate Relief; adult gaming centres lose the RHL multipliers. Funded partly by Machine Games Duty going from 20% to 25% on higher-stake machines.

Business. The Government says half of shops, restaurants and gyms will pay no business rates at all. For a café with a £16,000 rateable value that's the whole bill gone.

Personal. None.

Verdict: Good. The most direct cash help in the Budget, and ongoing rather than a one-year discount, with the thresholds reviewed at the 2029 revaluation. It's England only (the devolved nations get equivalent funding to decide for themselves), and it does nothing for an office or a workshop.

Fuel duty

What it is. The 5p cut is extended and the RPI rise deferred to 1 July 2027. The red diesel cut of 3.7p runs to the same date.

Business. Fleet costs stay where they are for another eight months. The costing is £780 million in 2027/28.

Personal. Same at the pump.

Verdict: Good, and temporary, as it has been every year since 2011. Plan on 1 July 2027 being a real deadline until the next Budget says otherwise.

Energy

What it is. The British Industrial Competitiveness Scheme takes up to 25% off electricity bills for around 10,000 energy-intensive manufacturers from April 2027, with a back payment for 2026/27. Domestic electricity VAT stays at 0% to 1 July 2027. Gas standing charges are to go for households.

Business. Real help for a foundry; nothing for a shop or an office, whose energy bills are commercial and untouched.

Personal. Lower household bills: £100 payment for bands A to D in England from January 2027, about £50 off the price cap from the VAT extension.

Verdict: Good, for 10,000 firms. Most businesses aren't among them.

VAT and HMRC administration

Overseas suppliers charge VAT to unregistered UK businesses

What it is. From April 2027 the reverse charge on services from abroad applies only where the UK customer is VAT-registered. An unregistered business will be charged UK VAT by the overseas supplier.

Business. A consultancy under the threshold paying £5,000 a year to US software vendors will pay £1,000 of VAT it can't recover. Today it pays none.

Personal. None.

Verdict: Not good. It's an anti-avoidance fix, and the costing is only £70 million a year, but it lands entirely on the smallest businesses.

Online marketplace VAT collection

What it is. From October 2027 marketplaces collect VAT on sales by UK VAT-registered businesses, and by any other UK business with more than £90,000 of annual sales on that platform. Personal sales, second-hand goods and business-to-business sales are outside it.

Business. If you're VAT-registered and sell through a marketplace, the platform accounts for the VAT; you'll need to reconcile what it collected against your own return. Unregistered sellers under £90,000 on a platform are untouched.

Verdict: Mixed. Levels the field against sellers who don't register; adds reconciliation work for compliant ones.

E-invoicing from April 2029

What it is. HMRC gets the power to require electronic VAT invoices from April 2029, with HMRC as the UK Peppol authority. Scope and exemptions come in regulations; a consultation on digital reporting runs to 20 January 2027.

Business. Structured invoices between businesses, which in other countries has meant faster payment and less re-keying, and also a one-off systems change for everyone VAT-registered.

Verdict: Mixed. Good policy if the exemptions are sensible for the smallest firms. Two and a half years' notice is fair. Software will carry most of the load; a business still on Word invoices has a deadline now.

Direct Debit mandates for VAT and PAYE

What it is. Every business must have a Direct Debit mandate in place for VAT and PAYE by April 2029, after HMRC softened its original proposal: you can still pay by another method before the due date, and the mandate collects only what's unpaid.

Business. Little change for businesses that pay on time; a backstop against forgetting.

Verdict: Mixed. Harmless for most, uncomfortable for a business that manages cash by paying HMRC last.

Self Assessment in-year payments from April 2029

What it is. Taxpayers who make payments on account will move to smaller, more regular in-year payments from April 2029, collected automatically (Direct Debit, for example) by default, with an option for eligible taxpayers to pay through PAYE instead. Details next year.

Business. For a sole trader, or a director with untaxed income, tax leaves the account sooner. The total doesn't change; the timing does.

Verdict: Not good for cash flow, and the detail will decide how bad. Two payments a year is a feature of self-employment, not a bug, for anyone with uneven income.

HMRC recovery of lower-value debts from bank accounts

What it is. From July 2029 HMRC expects to collect smaller tax debts by regular deductions from the bank accounts of people who "can afford to pay but repeatedly fail to do so", with a code of practice on safeguards first. Both the draft code and draft legislation are due for consultation in summer 2027.

Business. For anyone who answers HMRC's letters, nothing. The power exists for those who don't.

Verdict: Watch. The safeguards are the policy; judge it when the draft legislation arrives.

The distributions framework rewrite

What it is. The Government is "modernising" how distributions and repayments of capital from companies to individual shareholders are taxed, with a technical consultation in 2027 and effect from April 2028. The press release says the aim is to prevent "complex arrangements being used to extract profits at lower tax rates". The costing rises to £800 million a year by 2029/30.

Business. No detail yet. The routes that currently deliver capital treatment rather than dividend treatment (buy-backs, capital reductions, distributions in a winding-up) are the obvious targets.

Personal. For an owner-manager, this is the measure that could change how you take money out of your own company from 2028.

Verdict: Watch, and lean cautious. £800 million a year is not a tidy-up; it is a tax rise on owners, with the design still to come.

R&D administration

What it is. No Claim Notification Form for claims made on or after 1 April 2027; the Additional Information Form is simplified from autumn 2027.

Verdict: Good. The notification form caused genuine companies to lose claims on a technicality.

Making Tax Digital for Income Tax

What it is. The timetable stands (over £30,000 from April 2027, over £20,000 from April 2028). Anyone joining in April 2027 gets no late-submission penalty points on their 2027/28 quarterly updates.

Verdict: Good. A sensible soft landing for the first wave.

Measures that don't touch most small businesses

• Bank Corporation Tax surcharge from 3% to 6% for 15 months from 1 January 2027: the largest single raiser in 2027/28, at £950 million, and temporary. The Electricity Generator Levy goes from 45% to 55% to March 2028 and raises under £100 million in total. The big permanent raisers are the ones above: the writing-down allowance cut (about £1.1 billion a year by 2029/30), the distributions rewrite (£800 million) and the savings and property rises (about £950 million together).
• Larger private hire operators become liable for 20% VAT on the full fare from 2 January 2028; the turnover threshold is going to consultation, with £50 million a year as the lead option.
• Pension Tax Allowance from April 2027: pensioners with income up to the full new State Pension pay no Income Tax to 2030.
• Lifetime ISA withdrawal charge cut to 20% for purchases above the property cap, from 29 October 2026.
• Tariffs suspended on 101 food products and heating oil from 26 November 2026; the Graduate visa extended from 18 months to two years for graduates of eligible universities; non-compete clauses to be reformed by legislation, with a consultation on wider restrictive practices first.

Our overall view

For the typical UK small company, this Budget is a standstill with a bill attached for the people around it. The company itself pays the same Corporation Tax, the same employer NI and the same VAT as before, and gets a clearer runway to 2029. The owner pays more if they have savings or property, more on the way out above £500,000, and faces a rewrite of the distribution rules in 2028 with no detail yet. Employers in hospitality and retail get the one large, permanent giveaway (business rates in England) and the one large, permanent cost (the Living Wage) in the same year. Everyone gets a thicker HMRC rulebook from 2027 to 2029: payrolling benefits, e-invoicing, Direct Debit mandates, in-year payments.

If you run a business and want one action from this list: find out whether Founders' Relief will apply to you, and if not, look hard at the BADR date. The gap between the two reliefs from April 2027 is 14 percentage points on the day you sell.

Ledgers works out your Corporation Tax, VAT and director's tax as the year goes on, using the rates in force for each period, so you can see the effect of these changes on your own numbers. Start your books in Ledgers for free.

Our view, not tax advice. Facts as at 28 October 2026, checked against GOV.UK on 30 October 2026. Sources: Budget 2026 document; Budget 2026 speech; Budget 2026 press release; Overview of tax legislation and rates (OOTLAR) and Annex A; Capital allowances; BADR lifetime limit; Founders' Relief; Savings and property income rates; Trading allowance; Direct Debit outcome; Timely payments outcome; Lower value tax debts outcome; VAT e-invoicing; Distributions framework; Income Tax thresholds to 5 April 2031; National Living Wage; HMRC CG64174: BADR rates from April 2025 and April 2026; Entrepreneurs' Relief lifetime limit reduction, 2020; Approved mileage rates since 2011; National Minimum Wage rates, April 2025; Budget 2025: tax rates for property, savings and dividend income; Check if you're eligible for MTD for Income Tax.

Frequently asked questions

Was the Autumn Budget 2026 good for small businesses?

Mostly steady rather than generous. Corporation Tax, dividend tax, employer National Insurance and the VAT threshold are unchanged, which is the certainty small companies asked for. The real costs land on specific groups: owners selling for more than £500,000, businesses with savings or property income, and small employers facing a 3.9% rise in the National Living Wage. Retail, hospitality and leisure in England get a genuine business rates cut.

Who loses most from Budget 2026?

Owners planning an exit with gains above £500,000 (Business Asset Disposal Relief is halved from April 2027), landlords and savers (tax on that income rises two points to 24%, 44% and 49% from April 2027), and businesses below the VAT threshold buying services from abroad, who will be charged UK VAT from April 2027.

What is Founders' Relief?

A new Capital Gains Tax relief announced in Budget 2026: a 10% rate on up to £10 million of lifetime gains for founders of, and significant early investors in, high-growth UK companies, for disposals on or after 6 April 2027. The qualifying rules are out for consultation until 30 November 2026.

Did the Budget change the main pool writing-down allowance?

Yes. It falls from 14% to 12% from 1 April 2027 for companies. In the same package the main rate first-year allowance rises from 40% to 50% for spending on or after 1 January 2027. The £1 million Annual Investment Allowance and full expensing stay.

Tools and guides for this

• UK tax rates 2026/27Every rate and threshold in one place, with the source for each.
• Making Tax Digital for Income TaxWho's in scope, the dates, and what to do now.
• Corporation Tax calculatorMarginal relief, short and long periods, and when to pay.

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