Chancellor John Healey delivered the Autumn Budget on 28 October 2026, setting out a range of tax changes that will affect individuals, landlords, savers, business owners and the self-employed.
While the Budget does not introduce a broad increase in the main rates of Income Tax, National Insurance or VAT, several important changes are planned over the coming years.
The following highlights some of the key announcements and how they may affect you.
Higher Tax Rates On Savings and Property Income (from 6 April 2027)
Income Tax rates on savings and property income will increase by a further two percentage points, bringing the rates to 24% for basic-rate taxpayers, 44% for higher-rate taxpayers and 49% for additional-rate taxpayers.
These rates are four percentage points higher than the standard Income Tax rates, reflecting a further increase on top of changes announced in the previous Budget. The savings rates will apply across the UK, while the property rates will apply in England, Wales and Northern Ireland, subject to devolved tax-setting powers.
The changes will not affect employment or dividend income.
Higher Trading Allowance For Small Traders (from 6 April 2027)
The Trading Allowance will increase from £1,000 to £3,000 per tax year. This means individuals will be able to earn up to £3,000 from trading and miscellaneous activities without paying Income Tax on that income.
This could benefit people with small side businesses or additional sources of income. However, whether a Self Assessment tax return is still required will depend on their wider circumstances.
Additional Support For Pensioners (from 6 April 2027)
A Pension Tax Allowance will help protect pensioners whose total income is no more than the value of the full new State Pension from having to pay small amounts of Income Tax.
The allowance will reduce the Income Tax liability of eligible individuals. For those with income above the full new State Pension, the benefit will gradually reduce as their income increases.
The measure will apply for three tax years, from 2027/28 to 2029/30.
Cash ISA Allowance Remains at £20,000
Several changes will affect business owners and entrepreneurs:
- Business Asset Disposal Relief (BADR): The lifetime limit on qualifying gains will reduce from £1 million to £500,000 for disposals made on or after 6 April 2027.
- Founders’ Relief: A new Capital Gains Tax relief will offer a 10% rate on up to £10 million of lifetime gains for qualifying founders and early investors in high-growth, innovative UK companies. The relief is planned to apply from 6 April 2027, with detailed eligibility rules subject to consultation.
- Capital allowances: The main rate of writing-down allowance will reduce from 14% to 12% from April 2027. However, to encourage business investment, the main rate of first-year allowance will increase from 40% to 50% for qualifying expenditure incurred from 1 January 2027.
National Minimum Wage increases – April 2027
New rates will apply from 1 April 2027.
| Worker Category | Current Rate | New Rate |
|---|---|---|
| 21 and over | £12.71 | £13.21 |
| 18–20 | £10.85 | £11.27 |
| 16–17 | £8.00 | £8.31 |
| Apprentice | £8.00 | £8.31 |
| Accommodation offset (daily) | £11.10 | £11.53 |
Business Mileage Allowance Changes
The Budget confirms an increase in the mileage rate for business journeys using employees’ own cars and vans.
| Mileage | Rate |
|---|---|
| First 10,000 business miles | 55p per mile |
| Above 10,000 miles | 35p per mile (from 6 April 2027) |
The 55p rate for the first 10,000 miles was introduced earlier in 2026. The increase to 35p for additional miles is the new change to prepare for.
Employment Expenses: April 2028
The Government plans to remove the existing £2,500 Self Assessment threshold for employment expense claims.
The intention is to make it easier for employees to claim eligible employment expense tax relief through PAYE.
Business Travel And Subsistence – April 2028
New benchmark scale rates will be introduced:
| Allowance | New Rate |
|---|---|
| 5-hour qualifying period | £20 |
| 10-hour qualifying period | £60 |
| 24-hour qualifying period | £75 |
Overseas subsistence rates will also move to a new tiered system.
Employers should review expense policies and reimbursement procedures ahead of implementation.
Employer Immigration Charges – October 2026
From 28 October 2026, certain employer-paid immigration sponsorship costs will be exempt from Income Tax.
This covers qualifying Certificate of Sponsorship and Immigration Skills Charge fees.
Payroll teams should review how these payments are currently treated.
Parental Support
The Budget also announced plans to extend parental financial support to eligible self-employed fathers and parents in same-sex couples.
The proposed support is two weeks of financial assistance, with further implementation details expected.
This is a future change rather than an immediate payroll adjustment.
Self Assessment: More Regular Tax Payments (from April 2029)
Taxpayers who currently make payments on account towards their Self Assessment liabilities will be required to make more regular payments throughout the tax year, rather than relying on the existing payment arrangements.
Further details on how the new payment system will work are expected in due course.
