Published: 30 October 2026 | By Account Ease Tax Team

The UK Autumn Budget 2026, announced on 28 October 2026, introduces important changes affecting small businesses, sole traders, landlords, employees and limited company directors.

From an increase in the National Living Wage to new tax reliefs for entrepreneurs, the Budget focuses on easing immediate financial pressures while encouraging long-term business growth.

However, not every announcement means an immediate saving. Several measures will take effect in April 2027 or later, making early financial planning essential.

At Account Ease, we understand how changing tax rules can affect business profitability, cash flow and compliance. In this guide, we explain the key Autumn Budget 2026 announcements, who they affect and what you should do next.

Autumn Budget 2026 at a Glance

Here are some of the most important announcements for UK taxpayers and businesses.

Budget announcement	Key change	Effective date
National Living Wage	Increases to £13.21 per hour	1 April 2027
Trading Allowance	Increases from £1,000 to £3,000	6 April 2027
Property Income Tax	Rates increase to 24%, 44% and 49%	6 April 2027
Savings Income Tax	Rates increase to 24%, 44% and 49%	6 April 2027
Founders’ Relief	Proposed 10% CGT rate on up to £10m of qualifying lifetime gains	6 April 2027
Business Asset Disposal Relief	Lifetime limit reduces to £500,000	6 April 2027
Online Marketplace VAT	Expanded responsibility for qualifying UK seller transactions	1 October 2027
Business Rates	Expanded relief for qualifying retail, hospitality and leisure businesses in England	April 2027
R&D Tax Relief	Claim Notification Form to be removed	1 April 2027
E-invoicing	Specified electronic VAT invoice format becomes mandatory	1 April 2029

Some measures require legislation or further guidance. Businesses should check the final rules before making irreversible decisions.

1. National Living Wage Increase: What Employers Need to Know

One of the most significant Autumn Budget 2026 announcements for employers is the increase in the National Living Wage.

From 1 April 2027, the National Living Wage will rise by 3.9% to £13.21 per hour for eligible workers aged 21 and over.

Other announced minimum wage rates include:

• Workers aged 18–20: £11.27 per hour.
• Workers aged 16–17: £8.31 per hour.
• Eligible apprentices: £8.31 per hour.

How Will the Wage Increase Affect Small Businesses?

A higher minimum wage increases an employer’s direct payroll costs. It can also increase related employment expenses, including employer National Insurance contributions and workplace pension contributions where applicable.

For example, consider an employee working 37.5 hours per week at the National Living Wage.

At the previous rate of approximately £12.71 per hour, annual gross wages would be around £24,784.50.

At £13.21 per hour, annual gross wages would increase to approximately £25,759.50.

That represents an increase of £975 per year, before additional employment costs.

The government’s published annual increase of approximately £910 uses a different full-time working-hours assumption.

For employers with several minimum-wage employees, the combined financial impact could be substantial.

What Should Employers Do Before April 2027?

Review your current payroll costs, identify employees affected by the new rates and update your staffing budgets.

Businesses should also consider whether existing product prices, service charges and profit margins remain sustainable.

Account Ease provides payroll services in the UK to help businesses manage wages, PAYE, pension deductions and payroll reporting accurately.

2. Trading Allowance Increases to £3,000 for Sole Traders

The Autumn Budget 2026 brings a potentially beneficial change for individuals earning smaller amounts from self-employment and trading activities.

From 6 April 2027, the Trading Allowance will increase from £1,000 to £3,000.

The Trading Allowance provides relief for qualifying trading and miscellaneous income.

What Does the New £3,000 Trading Allowance Mean?

A person with qualifying trading income of up to £3,000 may be able to benefit from the increased allowance, subject to the relevant rules.

For example, someone earning £2,500 annually from a qualifying side business may be able to use the allowance against that income.

However, the Trading Allowance is not an additional tax-free amount that can simply be added to every self-employed person’s normal business expense deductions.

Where eligible, taxpayers generally need to consider whether claiming the allowance or deducting actual allowable expenses produces the better result.

The allowance does not automatically remove every tax-registration, reporting or record-keeping obligation.

Who Could Benefit?

The increase may be particularly useful for freelancers, casual service providers, online entrepreneurs and people starting small side businesses.

Individuals with significant business expenses may still benefit more from claiming their actual allowable costs.

Our sole trader accounting services can help you understand your available tax reliefs and maintain accurate financial records.

3. Landlord Tax Changes: Property Income Tax Rates Will Rise

Property taxation is another important area affected by Autumn Budget 2026.

From 6 April 2027, the government plans to increase the Income Tax rates applying to property income by two percentage points.

The announced property income tax rates are:

Tax band	New property income tax rate
Basic rate	24%
Higher rate	44%
Additional rate	49%

These changes are announced for England, Wales and Northern Ireland. Scotland has a separate income tax framework, so Scottish taxpayers should obtain advice relevant to their circumstances.

How Could the Higher Property Tax Rates Affect Landlords?

Consider a simplified example where £20,000 of taxable rental profits falls entirely within the new property basic-rate band.

At 22%, the tax attributable to that income would be £4,400.

At 24%, it would be £4,800.

That represents an additional £400.

This example assumes an equivalent previous property income tax rate of 22% and is intended only to illustrate the effect of a two-percentage-point increase. It is not a comparison with the ordinary 20% basic income tax rate currently applying to property income.

The actual tax liability depends on the applicable tax year, personal allowances, other income, available reliefs and finance-cost restrictions.

What Should Landlords Do?

Landlords should review their projected rental profitability, allowable expenditure, mortgage-finance treatment and expected tax payments.

Maintaining records of rental income, repairs, maintenance and property-related costs will remain essential.

If you own rental properties, Account Ease offers landlord accountancy services to support tax calculations, bookkeeping and annual reporting.

4. New Founders’ Relief: A Potential Tax Benefit for Entrepreneurs

The government has announced a new Capital Gains Tax relief designed to support founders of innovative, high-growth companies.

From 6 April 2027, qualifying founders may benefit from a 10% Capital Gains Tax rate on up to £10 million of lifetime gains.

This is known as Founders’ Relief.

Why Is Founders’ Relief Important?

Founders who build and grow successful companies may realise substantial capital gains when selling their qualifying business interests.

A reduced Capital Gains Tax rate could significantly affect their after-tax proceeds.

For example, a qualifying gain of £500,000 taxed entirely at 10% would produce a Capital Gains Tax liability of £50,000, before considering relevant adjustments.

However, not every company director or shareholder will qualify.

The relief is targeted at founders meeting the final conditions for high-growth, innovative businesses.

Business Asset Disposal Relief Is Also Changing

Alongside the new Founders’ Relief, the government has announced a reduction in the lifetime limit for Business Asset Disposal Relief (BADR).

The BADR lifetime gains limit will fall from £1 million to £500,000 for disposals from 6 April 2027.

The announced BADR rate is 18% for qualifying gains.

This means business owners considering a disposal should review the interaction between the existing relief, the new Founders’ Relief and their specific eligibility.

For entrepreneurs, the timing and structure of a business sale can make a material difference to the tax outcome.

Account Ease supports limited companies with accounting and tax compliance, helping directors maintain the financial information needed for informed business decisions.

5. VAT Changes for Online Sellers and Marketplaces

The Autumn Budget 2026 introduces a major change affecting online marketplaces and UK-based businesses selling through them.

From 1 October 2027, online marketplace VAT liability rules are set to extend to certain sales by UK businesses.

Under the announced measure, marketplaces will be responsible for collecting VAT on qualifying sales by UK VAT-registered sellers and other UK businesses meeting a minimum annual sales threshold of £90,000 per platform.

The policy excludes specified categories, including personal non-business sales, second-hand goods and business-to-business transactions.

What Does This Mean for Online Businesses?

Businesses selling through online platforms should review how VAT is calculated, collected, reported and reconciled.

Where a marketplace becomes responsible for VAT collection, sellers will need to understand how those transactions appear in their accounting records.

Poor reconciliation could result in duplicated VAT figures, incorrect sales reporting or uncertainty over the amount payable to HMRC.

Practical Steps for Online Sellers

Before the new rules take effect, businesses should:

• Identify which marketplaces they sell through.
• Review annual sales volumes for each platform.
• Confirm their current VAT registration status.
• Check whether marketplace transactions fall within the announced rules.
• Review bookkeeping systems and VAT reconciliations.

Account Ease offers VAT return services to help businesses prepare accurate VAT records and manage their filing obligations.

6. Business Rates Relief for Retail, Hospitality and Leisure

The Autumn Budget 2026 includes additional support for eligible businesses operating in England’s retail, hospitality and leisure sectors.

From April 2027, the government plans to expand Small Business Rates Relief for qualifying properties.

The announced thresholds include:

• 100% relief threshold increasing from £12,000 to £18,000.
• Tapered relief threshold increasing from £15,000 to £21,000.

The government estimates that approximately 70,000 additional qualifying high-street businesses could stop paying business rates.

A two-year real-terms freeze is also planned for qualifying retail, hospitality and leisure properties.

Additional support has been announced for pubs, social clubs and eligible live music venues.

Which Businesses Could Benefit?

Depending on their properties and eligibility, the measures could support restaurants, cafés, shops, salons and other qualifying businesses.

Importantly, these measures do not mean that every business in the UK will receive an automatic rates reduction.

Eligibility depends on property type, rateable value, existing reliefs and location.

Business rates operate differently in Scotland, Wales and Northern Ireland.

Businesses should review the actual rates assessment issued by the relevant authority before updating their budgets.

Our bookkeeping services help business owners maintain clear expense records and monitor changes to their operating costs.

7. Energy Costs and Fuel Duty: Financial Planning Implications

Energy and transport costs remain important for small businesses.

The Budget extends the existing 5p-per-litre fuel duty reduction and freeze until 1 July 2027.

This could help businesses using vehicles for deliveries, client visits and other work-related activities avoid some previously planned increases.

However, government estimates of savings are comparisons against previous policy plans, rather than guaranteed reductions in the amount businesses will pay.

Changes to Business Electricity Costs

The government has announced further electricity support for eligible energy-intensive manufacturing businesses.

Under the British Industrial Competitiveness Scheme, qualifying firms are expected to receive electricity discounts of approximately 20% to 25% from April 2027, with relevant retrospective support.

This is a targeted scheme, not a general electricity discount for every UK business.

Changes to Tax-Free Mileage Rates

The government has also announced a permanent increase in approved tax-free mileage rates for eligible work journeys using an individual’s own car or van.

The announced rates are:

• 55p per mile for the first 10,000 eligible business miles.
• 35p per mile above 10,000 eligible business miles.

Businesses should confirm the implementation date and applicable rules before changing reimbursement arrangements.

Good mileage records remain essential to support legitimate business expense claims.

8. R&D Tax Relief Changes for Innovative Companies

The Autumn Budget 2026 includes changes intended to simplify Research and Development tax relief administration.

From 1 April 2027, the government plans to remove the R&D tax credit Claim Notification Form requirement.

The Additional Information Form is also expected to be simplified from autumn 2027.

How Could This Help Businesses?

Research and Development tax relief can be relevant where a company undertakes qualifying activities involving scientific or technological advancement.

Potentially eligible businesses include certain software developers, manufacturers, engineering firms and technology-focused companies.

Simplifying the claims process may reduce some administrative work.

However, removing a notification requirement does not remove the need to demonstrate that an R&D project qualifies.

Companies must still retain appropriate technical and financial evidence and comply with the applicable rules.

Account Ease provides Research and Development tax relief support for businesses seeking professional assistance with their claims.

9. Corporation Tax and Capital Allowances

The Budget maintains the broader Corporation Tax Roadmap rather than announcing a general increase in the headline Corporation Tax rates.

However, changes to capital allowances could affect the timing of tax relief available on qualifying business investment.

The government has announced:

• A 50% main-rate first-year allowance for qualifying expenditure incurred from 1 January 2027.
• A reduction in the main-rate writing-down allowance to 12% from April 2027, with dates depending on the relevant tax regime.

The new first-year allowance does not mean that every business asset automatically receives a 50% deduction. Eligibility and interaction with other allowances must be considered.

Why Does Capital Allowance Planning Matter?

Imagine a limited company purchasing £40,000 of qualifying equipment.

Depending on the applicable allowance and circumstances, the timing of the tax deduction can affect the company’s taxable profits and cash flow.

Businesses planning major equipment or machinery purchases should consider both commercial requirements and the tax treatment of the expenditure.

For help with annual accounts and Corporation Tax compliance, explore our one-off accounts and tax filing services.

10. Making Tax Digital and Future HMRC Compliance Changes

Digital tax compliance continues to evolve.

Although the Autumn Budget 2026 does not replace the existing Making Tax Digital programme, it introduces additional measures affecting reporting, payments and electronic records.

Making Tax Digital for Income Tax

The Budget introduces a temporary penalty easement for individuals joining Making Tax Digital for Income Tax from April 2027.

Eligible taxpayers joining at that time will not receive late-submission penalty points for their first four quarterly updates for the 2027/28 tax year.

This does not remove their reporting obligations or necessarily protect them from every type of penalty.

The government also announced deferrals affecting certain taxpayer groups.

Businesses should confirm their own MTD commencement date rather than assuming that the Budget delays all MTD requirements.

Mandatory Electronic VAT Invoicing From 2029

From 1 April 2029, VAT invoices will need to be issued in a specified electronic format under the announced reforms.

HMRC plans to publish further technical details ahead of implementation.

Businesses using older accounting systems or manual invoice processes may need to review their software.

Future Changes to Tax Payments

Other announced measures include more regular in-year payments for certain Self Assessment taxpayers from April 2029 and direct debit arrangements for VAT and PAYE liabilities from 2029.

Businesses should begin considering how these future changes could affect working capital.

Regular, accurate bookkeeping can make it easier to understand outstanding liabilities and prepare for future payment deadlines.

11. Savings Tax Changes: What Individual Taxpayers Should Know

From 6 April 2027, the government plans to increase the Income Tax rates on savings income by two percentage points.

The announced savings income tax rates will be:

Tax band	Announced savings income rate
Basic rate	24%
Higher rate	44%
Additional rate	49%

The impact will depend on an individual’s taxable savings income and available allowances.

Taxpayers should not assume that all interest received from their bank accounts will automatically become taxable.

Existing savings-related reliefs and allowances need to be considered.

What Happens to the Cash ISA Allowance?

The government has decided to retain the annual cash ISA subscription limit at £20,000 rather than implementing a previously planned reduction.

Eligible ISA savings retain their relevant tax advantages.

Individuals receiving significant savings income outside tax-advantaged accounts should review their overall tax position.

For support with personal tax reporting, explore our Self Assessment tax return services.

12. What Does Autumn Budget 2026 Mean for Different Types of Businesses?

The impact of the Budget depends on your business structure, industry and income sources.

For Sole Traders and Freelancers

The increased Trading Allowance may provide additional relief for qualifying smaller trading activities.

However, sole traders must still evaluate their allowable expenses, overall taxable income and relevant reporting requirements.

Those using personal vehicles for business journeys should also review the revised mileage provisions.

For Limited Company Directors

Directors should pay particular attention to changes affecting capital allowances, share disposal reliefs and future company-distribution rules.

Personal income, dividends, salary and business ownership arrangements should be reviewed together.

Changes to BADR and the introduction of Founders’ Relief may become especially relevant for directors planning to sell their companies.

For Landlords

The increased property income tax rates could raise future tax liabilities.

Landlords should review projected taxable rental income and avoid confusing rental cash flow with taxable rental profits.

For Employers

The higher National Living Wage may increase labour costs from April 2027.

Businesses with larger workforces should model the combined effect on gross payroll, National Insurance, pensions and operating margins.

For Online Sellers

Changes to marketplace VAT responsibility may require adjustments to transaction reconciliation and accounting software.

Sellers should check which platform transactions are within the scope of the new rules.

13. Autumn Budget 2026: Practical Financial Planning Checklist

Understanding tax announcements is only the first step. Business owners must also consider how these changes affect financial decisions.

1. Review your business expenses — Assess payroll, rent, utilities, transport and other recurring costs. Identify where Budget changes may affect future spending.
2. Update your cash-flow forecast — Consider the timing of new tax liabilities, wage increases, available reliefs and business investment.
3. Check your tax position — Review whether changes to Trading Allowance, property income tax, savings tax or Capital Gains Tax could affect you.
4. Prepare your accounting records — Keep income, expenses, invoices and supporting documents organised, particularly where future reporting requirements will become more digital.
5. Review VAT and payroll procedures — Confirm that your systems can accommodate new reporting requirements and changes to employee pay.
6. Get advice before major decisions — Business restructuring, capital investment and disposal transactions should be evaluated against the final legislation and your wider financial circumstances.

14. How Account Ease Can Help You Prepare for the Autumn Budget 2026 Changes

Tax changes can create opportunities, but they can also increase the risk of unexpected liabilities if financial planning is delayed.

At Account Ease, we provide online accounting and tax services for UK small businesses, sole traders, freelancers, landlords and limited companies.

Our services include:

• Bookkeeping services to keep financial records organised and support cash-flow visibility.
• Payroll services to assist with employee pay, PAYE and pension calculations.
• VAT return services to support VAT compliance and reporting.
• Self Assessment services for individuals with relevant filing obligations.
• Landlord accountancy services to help property owners manage their rental finances.
• R&D tax relief support for businesses undertaking potentially qualifying innovation projects.

Whether you are preparing for a wage increase, reviewing rental income or managing a growing company, accurate accounting information can help you make more confident decisions.

Need help understanding how Autumn Budget 2026 could affect your finances?

Contact Account Ease to discuss your accounting and tax requirements.

Frequently Asked Questions About Autumn Budget 2026

What was announced in the UK Autumn Budget 2026?

The Autumn Budget 2026 announced changes involving minimum wages, business rates, property and savings taxation, entrepreneurial tax reliefs, VAT marketplace responsibility, capital allowances and future digital tax requirements.

When was Autumn Budget 2026 announced?

The UK Autumn Budget 2026 was delivered on 28 October 2026. Many announced changes will take effect from April 2027, while others have later implementation dates.

What is the new National Living Wage for 2027?

The National Living Wage will increase to £13.21 per hour from 1 April 2027 for eligible workers aged 21 and over.

Is the Trading Allowance increasing to £3,000?

Yes. The government has announced an increase in the Trading Allowance from £1,000 to £3,000 from 6 April 2027, subject to the relevant eligibility and tax rules.

Will landlords pay more tax after Autumn Budget 2026?

Some landlords may face higher Income Tax liabilities because the announced property income tax rates will increase by two percentage points from April 2027 in England, Wales and Northern Ireland. The actual impact depends on their personal circumstances.

Is Corporation Tax increasing in 2027?

The Autumn Budget 2026 maintains the broader Corporation Tax Roadmap rather than announcing a general increase in headline Corporation Tax rates. Some targeted business tax rules and capital allowances are changing.

What are the new VAT rules for online sellers?

From October 2027, online marketplaces will become responsible for VAT collection on additional qualifying UK business sales, including those meeting the announced £90,000 annual sales threshold per platform. Detailed exclusions and conditions apply.

Is Making Tax Digital being cancelled?

No. Making Tax Digital is continuing. The Budget introduces a penalty easement for certain taxpayers joining in April 2027 and defers implementation for some groups.

Does the £100 energy payment apply to every business?

No. The announced £100 Household Energy Payment is household support. It is not a general business grant. Businesses should separately review whether they qualify for targeted energy or business rates measures.

How can small businesses prepare for Budget 2026 tax changes?

Small businesses should review payroll costs, update cash-flow forecasts, check eligibility for tax reliefs, maintain accurate bookkeeping records and obtain professional guidance where necessary.

Final Thoughts: Plan Ahead for the UK Budget 2026 Changes

The Autumn Budget 2026 introduces a combination of financial support, targeted tax increases and long-term economic reforms.

For UK small businesses, the most important issue is not simply which tax rates are changing. It is how those changes affect business cash flow, compliance obligations and future decisions.

Sole traders should review the new Trading Allowance. Landlords should prepare for higher property income tax rates. Employers should plan for increased minimum wages, while limited company directors should evaluate changes to capital allowances and business disposal reliefs.

Some measures are subject to further legislation and detailed guidance. Early preparation, supported by accurate financial records, can reduce uncertainty.

Make your next financial decision with greater confidence.

Speak to Account Ease for professional support with your UK bookkeeping, tax returns, payroll and business accounting requirements.

Disclaimer: This article provides general information about the UK Autumn Budget announced on 28 October 2026. It is not personalised tax, financial or legal advice. Several announced measures are subject to legislation, eligibility requirements and further guidance. Tax rules may differ across UK nations.

Official reference: HM Treasury — Budget 2026

Additional reference: HMRC — Budget 2026 Tax-Related Documents