Key takeaways:
- The 2026 Autumn Budget was delivered on October 28th, 2026.
- The Budget introduced several tax changes that could affect individuals, business owners and companies.
- Business rates support is being expanded, including changes aimed at smaller businesses and the retail, hospitality and leisure sectors.
- Capital Gains Tax (CGT) rates remain unchanged, although new measures affecting business founders and Business Asset Disposal Relief were announced.
- Previously announced increases to tax rates on property and savings income will still take effect.
- The impact of these changes will depend on your individual or business circumstances.
Chancellor of the Exchequer John Healey delivered the Labour government’s third Autumn Budget on 28th October 2026, outlining the government’s latest plans for taxation, spending and the wider economy.
For individuals and businesses, some of the most notable announcements included changes to business rates, new Capital Gains Tax measures for business owners, and higher tax rates on savings and property income.
With numerous measures announced in the Chancellor’s speech, understanding which changes could affect you is not always straightforward. In this article, we break down the key tax announcements and explain what they could mean for you and your business.
What key changes to taxation were announced in the 2026 Autumn Budget?
- Change to business rates.
The Chancellor announced additional support for businesses through changes to business rates, including measures targeted at the retail, hospitality and leisure sectors.
From 2027, the threshold for Small Business Rate Relief will increase from £12,000 to £18,000. This means business owners will not be required to pay business rates until the property’s rateable value (an estimate of its annual open-market rental value on a specific date set by the government) is above £18,000.
All remaining retail, hospitality, and leisure properties will receive a two-year real-terms freeze on their business rates bills, ensuring no above-inflation increases.
For smaller businesses, particularly those operating from physical premises such as shops, pubs, restaurants and gyms, the changes could help reduce some of the pressure associates with property-based operating costs.
- Capital Gains Tax rates remain unchanged.
No increases to Capital Gains Tax (CGT) rates were announced in today’s Budget, following speculation beforehand that rates could rise.
CGT is charged on the gain made when certain assets are sold or disposed of, rather than the total amount received. For the 2026/27 tax year, the current CGT rates are:
- 18% for basic-rate taxpayers.
- 24% for higher and additional-rate taxpayers.
While rates remain unchanged, individuals disposing of property, investments or other chargeable assets should continue to consider the potential CGT implications as part of their wider tax planning.
- New Capital Gains Tax relief for business founders.
The Chancellor also announced a new Capital Gains Tax (CGT) relief aimed at business founders, designed to support entrepreneurs when they dispose of qualifying shares.
Under the measure announced today, qualifying founders will benefit from a 10% CGT rate on eligible lifetime gains of up to £10 million.
For entrepreneurs building a business with a future sale or exit in mind, the new relief could significantly change the CGT treatment of qualifying gains. However, eligibility will depend on the conditions still set to be released.
- Changes to Business Asset Disposal Relief (BADR).
Changes were also announced to Business Asset Disposal Relief (BADR), which can reduce the rate of Capital Gains Tax (CGT) payable when qualifying individuals dispose of all or part of a business.
The lifetime limit for qualifying BADR gains will reduce from £1 million to £500,000.
For business owners considering a future sale or succession, this change could affect the amount of qualifying gains that can benefit from BADR. The time and structure of a business disposal may therefore become an increasingly important consideration.
Commenting on the changes to BADR, Stacey Phipps, Associate Director of Insolvency within Cooper Associates Accountants, said:
“The reduction in BADR needs to be considered in the wider context of the risk entrepreneurs take when establishing and growing a business. The potential tax benefit on a successful exit has historically been one part of the reward for assuming that risk.
The introduction of Founders’ Relief is therefore welcome in principle and could provide a significant incentive for some entrepreneurs. However, it should not be confused with a return to the old Entrepreneurs’ Relief. While the headline 10% rate and £10 million lifetime limit may look familiar, the new relief is specifically targeted at founders and significant early investors in high-growth, innovative UK companies, and the detailed qualifying conditions are still subject to consultation.
For the much wider population of business owners who do not qualify, the reduction of the BADR lifetime limit to £500,000 means the tax incentive associated with building a successful business is being reduced further.
The concern is not simply what this means for today’s business owners, but the message it sends to tomorrows. If we want people to establish, invest in and grow businesses, there still needs to be a compelling reason for them to accept the additional risk and uncertainty involved.”
- Corporation Tax and capital investment.
The Budget also included measures affecting the tax treatment of business investment, with the government continuing to provide Corporation Tax relief for qualifying capital expenditure.
The 40% Main Rate First-Year Allowance is available for qualifying expenditure incurred on or after 1 January 2026. However, the 40% rate is set to be increased to 50% for qualifying expenditure incurred on or after 1 January 2027.
Additionally, the main rate writing-down allowance is being reduced from 14% to 12%. This means that business owners will now only be able to claim up to 12% of qualifying assets.
- Higher tax rates on savings and property income
Previously announced changes to the taxation of property and savings income will see rates increase by a further two percentage points.
For landlords, this will mean a higher Income Tax rate applying to taxable property income, while savers receiving taxable interest outside tax-efficient accounts will also be affected.
The impact will depend on an individual’s wider income and tax position, making it important to understand how the new rates interact with other sources of income.
- No further changes to Income Tax and dividend tax
No further changes to headline Income Tax or dividend tax rates were announced in today’s Budget.
However, previously announced measures and frozen tax thresholds remain relevant, meaning some individuals could still see their overall tax liabilities change despite headline rates remaining unchanged.
- Higher tax-free threshold for new ventures
The tax-free threshold for new ventures has been increased from £1,000 – £3,000, also known as new venture trading allowance, for all small ventures.
This allowance is intended to provide greater tax-free headroom for people generating income through new or smaller ventures.
Additional changes announced in today’s Budget
- National Minimum Wage and Living Wage increase.
Employers will need to prepare for increases to statutory minimum wage rates, including a rise in the National Living Wage.
The rates will see a 3.9% increase, taking the standard rate up to £13.21 and the rate for 18 to 20 years olds to £11.27.
- Business mileage allowance.
A change to the tax treatment of business mileage was also announced today as the 25p per mile expense has been increased to 35p per mile on mileage over 10,000 miles per year for people using their cars for work. The first 10,000 of expendable miles will remain at 55p per mile.
These changes to the business mileage allowance have been introduced alongside the extension of the 5p cut to fuel duty through to July 2027.
Commenting on the changes announced at the Autumn Budget today, Kevin Parsons, Managing Director of Cooper Associates Accountants, said:
“Excellent news that there is no increase in the income tax rate for wages and dividends but there will be a 2% increase in the property and savings tax rates.
With the ever-rising motoring costs, there is a welcome increase in the tax-free mileage rate to 55 per mile for the first 10,000 miles and an increase to 35p for mileage above that threshold.”
- Further investment into HMRC compliance and enforcement.
Additional measures aimed at tackling tax non-compliance and improving tax collection have also been announced today with the government pledging to invest £70 million over the next five years to help improve HMRCs compliance measures.
Responding to the further investment into HMRC, Stacey Phipps, Associate Director of Insolvency within Cooper Associates Accountants, said:
“Businesses should not be able to fund continued trading indefinitely by simply not paying HMRC. Taking action earlier against those that have the means to pay should help prevent substantial tax debts building up while a business continues trading.
The flip side is that stronger recovery action may bring financial distress to a head sooner. That could mean more businesses seeking restructuring or insolvency advice earlier, but that isn’t necessarily a bad thing. Too often we see businesses continue until their tax liabilities have become overwhelming and they can no longer pay wages or other creditors either. Earlier intervention can mean there are more options available and potentially a better outcome for everyone involved.”
What changes are being implemented from 2027 onwards?
Alongside the measures announced in the 2026 Autumn Budget, several changes announced in previous fiscal events are also set to take effect over the coming years.
Making Tax Digital (MTD).
Making Tax Digital (MTD) is an HMRC initiative designed to modernise the UK tax system through digital record-keeping and reporting.
MTD for Income Tax was introduced in April 2026 for sole traders and landlords with combined qualifying income over £50,000. Those within scope are required to keep digital records and submit quarterly updates to HMRC using MTD-compatible software, alongside a final declaration.
From April 2027, the qualifying income threshold will reduce to £30,000, bringing more sole traders and landlords within the MTD requirements.
It is then set to reduce further to £20,000 from April 2028.
No further changes to the MTD timetable were announced today, meaning those who will fall within the £30,000 threshold from April 2027 should continue preparing for the transition.
For those approaching the threshold, reviewing existing record-keeping processes and ensuring appropriate MTD-compatible software is in place can help make the transition more manageable.
A continued freeze on Income Tax thresholds.
The freeze on the personal allowance and Income Tax thresholds, previously extended in the 2025 Autumn Budget, is set to remain in place until the 2030/31 tax year.
This means the current thresholds remain:
| Tax band | Taxable income | Tax rate |
| Personal allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 to £50,270 | 20% |
| Higher rate | £50,271 to £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
Although the headline rates remain unchanged, freezing the thresholds can gradually increase the amount of Income Tax people pay as earnings rise. If incomes increase while the thresholds remain fixed, a greater proportion of an individual’s earnings may become taxable or fall within a higher tax band. This effect is commonly known as “fiscal drag”.
How can Cooper Associates Accountancy help?
Whether you are a business owner trying to understand how the changes could affect your company, or you are looking at how they might change your personal tax position, our team of expert accountants can help you make sense of the changes and what they could mean for you.
If you would like to explore the Budget in more detail, you can also read our related articles on ‘How the Budget may impact your personal finances’ and ‘How the Budget may impact your mortgage’ for a closer look at how the announcements could affect those areas.
If you are unsure where you stand after the Budget, get in touch with our team to arrange a no-obligation meeting. We will take the time to understand your current circumstances, explain what the changes could mean for you and your business, and help you understand what you may need to consider next.
