On 28th October 2026, the Chancellor, John Healey, announced the Autumn Budget 2026. There were no increases to the main rates of Income Tax, National Insurance or VAT, but there were a number of announcements that affect businesses, sole traders and landlords, with most of the changes starting from April 2027.
Here are the key highlights of what businesses need to be aware of.
- Tax Thresholds Frozen until 2031
The tax thresholds for Income Tax and most National Insurance thresholds will remain at their current levels until April 2031.
Income Tax (England, Wales and Northern Ireland):
Personal Allowance: Up to £12,570, your tax rate is 0%
Basic Rate: From £12,571 to £50,270, your tax rate is 20%
Higher Rate: From £50,271 to £125,140, your tax rate is 40%
Additional Rate: Over £125,140, your tax rate is 45%
Scotland sets their own rates for Scottish Taxpayers.
A few National Insurance figures will increase for the 2027/2028 tax year:
Lower Earnings Limit for employees: £133/week (£6,916/year)
Small Profits Threshold for the self-employed: £7,355/year
Voluntary Class 2 contributions: £3.80/week
Voluntary Class 3 contributions: £19.05/week
To find out more about the current National Insurance Rates, please visit the Government website. - Minimum Wage will be increased by 3.9% from April 2027
From April 2027, the National Minimum Wage paid to workers will be increased:
Over 21 years of age will increase from £12.71/hour to £13.21/hour
Between 18 and 20 years of age will increase from £10.85/hour to £11.27/hour
For 16 and 17-year-olds, and apprenticeships, it will increase from £8.00/hour to £8.31/hour - Tax on Property and Savings Income will rise again from April 2027
Last year’s Budget announced separate tax rates for property income and savings income from April 2027. These rates will now rise by a further 2 percentage points, so from April 2027 the rates will be:
Basic Rate: increasing from 20% to 24%
Higher Rate: increasing from 40% to 44%
Additional Rate: increasing from 45% to 49%
Landlords will receive tax relief on mortgage interest and other finance costs at 24% (currently 20%). The £1,000 property allowance and Rent a Room relief are not changing. Landlords who own their properties through a limited company pay Corporation Tax instead, so they are not affected. - Trading Allowance will increase to £3,000 from April 2027
The Trading Allowance will increase from £1,000 to £3,000 from April 2027. This means individuals can earn up to £3,000 a year from trading or casual work without paying tax on it or having to declare it to HMRC. The £3,000 is based on the income before any expenses, not the profit. The £1,000 limit still applies for the 2026/2027 tax year. - Making Tax Digital for Income Tax
MTD ITSA will go ahead as planned:
Those with self-employed and/or rental income of more than £30,000 will be required to submit via MTD from April 2027.
Those with self-employed and/or rental income of more than £20,000 will be required to submit via MTD from April 2028.
Those joining in April 2027 will not receive penalty points for late quarterly updates during the 2027/2028 tax year. However, all four quarterly updates must still be submitted before the end of year tax return can be filed.
Please note that for those who joined MTD in April 2026, the penalty-free period ends on 5th April 2027. From the 2027/2028 tax year, each late quarterly update will receive a penalty point, and 4 penalty points will result in a £200 penalty.
The following groups will be exempt from MTD until further notice: those eligible for qualifying care relief (such as foster carers), non-UK resident entertainers and sportspeople, and those expected to be non-UK resident. - Mileage Rates
The mileage rate of 55p per mile for the first 10,000 business miles, which was announced in May 2026 and backdated to 6th April 2026, will now be permanent. From April 2027, the rate for business miles over 10,000 will also increase from 25p per mile to 35p per mile. These rates apply to employees using their own vehicles for work, and to the self-employed using simplified expenses.
Cars and Vans: 55p/mile for the first 10,000 miles, and 35p/mile over 10,000 miles
Motorcycles: 24p/mile
Bicycles: 20p/mile
Carrying fellow employees on business journeys: up to an extra 5p/mile per passenger
Business mileage must be recorded for each journey, including the date, destination and number of miles. HMRC’s position is that a mileage claim without these records is taxable pay, and with benefits moving into payroll from April 2027 (see below), payroll information will be looked at more closely. - P11D (Employee Benefits)
From 6th April 2027, employers will be required to report and pay tax on company cars and vans, fuel and medical benefits through payroll, instead of on a P11D. From 6th April 2028, almost all other benefits will also need to go through payroll, except for employment-related (beneficial) loans and accommodation. - Van and Fuel Benefit Charges
If you provide staff with company vans they can use privately, or pay for private fuel in company cars or vans, the taxable benefit figures will increase from 6th April 2027:
Van benefit charge: £4,310
Van fuel benefit charge: £825
Car fuel benefit multiplier: £30,200 - Staff Meals on Business Trips
From 6th April 2028, the amounts that employers can pay for staff meals on business trips without checking receipts (known as benchmark scale rates) will increase:
Journeys over 5 hours: £20
Journeys over 10 hours: £60
Journeys over 24 hours: £75
The 200-plus rates for overseas travel will be replaced by a simpler tiered system. - Small Business Rates Relief for Retail, Hospitality and Leisure Properties
From April 2027, the Small Business Rates Relief thresholds for qualifying retail, hospitality and leisure (RHL) properties in England will increase:
Properties with a rateable value of up to £18,000 (currently £12,000) will receive 100% relief
Relief will taper to 0 for properties with a rateable value between £18,000 and £21,000 (currently £12,000 to £15,000)
Qualifying pubs, social clubs and most live music venues will also receive an additional 20 percentage points of relief from April 2027, bringing their total relief to 35%. Business rates for all other RHL properties will be frozen in real terms for two years.
Vape shops will no longer be eligible for Small Business Rates Relief or the lower RHL rates from April 2027. - Corporation Tax
The main rate of Corporation Tax will stay at 25% and the Small Profits Rate at 19%. Marginal relief for profits between £50,000 and £250,000 will continue unchanged. - Changes to the Main Rate for Plant and Machinery
Full expensing and the £1 million Annual Investment Allowance will continue. However, some changes are coming:
From 1st January 2027, the first-year allowance for main rate assets that don’t qualify for full expensing (such as those used for leasing or by non-corporation businesses) will increase from 40% to 50%.
From April 2027, the standard writing-down allowance rate drops from 14% to 12% (effective 1st April for Corporation Tax and 6th April for Income Tax). - VAT Collected by Online Marketplaces
From October 2027, online marketplaces will be responsible for collecting VAT on sales made by UK VAT-registered businesses, and by any other UK business with annual sales of £90,000 or more on a single platform. The £90,000 applies to each platform, not to all marketplaces combined. Personal sales, second-hand goods and business-to-business sales are not included.
If you sell through online marketplaces and have not registered for VAT when you should have, you can expect the marketplace to start collecting the VAT from you, so now is the time to get registered. - VAT on Services Bought from Overseas
From April 2027, if your business is not VAT registered and you buy services from overseas suppliers, those suppliers will charge you UK VAT directly, instead of the reverse charge applying. This will mean increased costs for small businesses that do not currently pay VAT on these services. - Changes to How Tax is Paid from April 2029
Several changes to how tax is paid will start from April 2029:
VAT and PAYE: A Direct Debit instruction will need to be in place. You can still pay by another method before the deadline, but any amount left unpaid will be collected by Direct Debit.
VAT Invoices: VAT invoices will need to be issued and received electronically, in a set format (known as e-invoicing).
Self-Assessment: Payments on account will be replaced by smaller, more regular payments during the year. If you are also employed, you will have the option to pay through PAYE. The details have not yet been announced. - Low-Value Imports
The customs treatment of low-value imports will be reformed by October 2028, six months earlier than planned. This will bring the treatment of small parcels closer to goods imported in bulk, so that overseas sellers can no longer undercut UK businesses by sidestepping duty. - Business Asset Disposal Relief
From 6th April 2027, the lifetime limit for Business Asset Disposal Relief will be reduced from £1,000,000 to £500,000. This relief reduces the Capital Gains Tax paid when you sell all or part of your business. You can read more about how the relief works in our blog post from January. - Parental Pay for the Self-Employed
For the first time, self-employed fathers and partners will be eligible for 2 weeks of paid parental leave, at up to around £194/week. The start date has not yet been announced. - HMRC’s New Powers
From April 2028, taxpayers will have a legal duty to correct errors in their tax returns once they find them, and HMRC will be able to issue notices asking them to check and correct a return. From 2029/2030, HMRC will also be able to collect smaller tax debts directly from bank accounts, where people can afford to pay but repeatedly do not. - Energy Bills and Fuel Duty
Standing charges on gas bills will be removed for households, but this does not apply to businesses. The temporary 5p cut in fuel duty and the 0% VAT rate on household electricity have both been extended until the end of June 2027.
As the Budget was quite complex, more of the announcements are covered in our second blog post, Autumn Budget 2026: More Updates for Your Business.
You can read more about the Autumn 2026 Budget on the Government website.