The Autumn Budget 2026 has been announced, bringing changes to tax, business expenses, employment costs and household finances. But what do these changes actually mean for you?
Whether you’re a sole trader, limited company director, landlord or employee, some of the announcements could affect how much tax you pay and how you plan your finances.
Some changes will take effect in 2027, while others won’t be introduced until 2028 or 2029.
We’ve broken down the key Autumn Budget 2026 announcements, focusing on what matters most to individuals and small businesses.
Income Tax, National Insurance and VAT
Let’s start with some familiar taxes.
The government has confirmed that there will be no increase to the headline rates of Income Tax, National Insurance or VAT.
However, that doesn’t mean everyone’s tax bill will stay the same!
Changes to the taxation of rental income, savings interest and business disposals could result in higher tax bills for some individuals.
Landlords: Higher Income Tax on rental profits
From 6 April 2027, landlords could face a higher tax bill on their rental income.
The government has announced a further increase to property Income Tax rates.
The new rates will be:
| Tax band | New property income rate |
| Basic rate | 24% |
| Higher rate | 44% |
| Additional rate | 49% |
For example, a basic-rate taxpayer with £15,000 of taxable rental profits could pay £3,600 in tax rather than £3,000.
That’s an additional £600 in tax each year, assuming the full amount is taxable at the basic rate.
These changes apply to individuals receiving property income, rather than rental profits earned within a limited company.
What should landlords do?
Now is a sensible time to review rental profitability, mortgage costs and expected tax liabilities.
Remember, the tax treatment of mortgage interest for residential landlords can already make the taxable profit different from the actual cash profit.
If you’re unsure how these changes could affect you, speak to DNA Accountants before making any decisions about your property portfolio.
Savings interest: Higher tax rates from April 2027
It’s not just landlords who could face higher tax bills.
From 6 April 2027, the rates of Income Tax on savings interest are also set to increase.
| Tax band | New savings income rate |
| Basic rate | 24% |
| Higher rate | 44% |
| Additional rate | 49% |
This could affect individuals earning significant interest on savings held outside tax-free accounts.
The good news is that ISAs remain tax-free, and the government has confirmed that the annual cash ISA subscription limit will remain at £20,000.
The Personal Savings Allowance also remains relevant, meaning some individuals may still receive savings interest without paying tax.
Sole traders: The trading allowance is increasing
There’s a change for individuals earning smaller amounts from self-employment.
From 6 April 2027, the trading allowance will increase from £1,000 to £3,000.
The trading allowance allows eligible individuals to receive a certain amount of trading income without paying Income Tax on it.
For example, someone earning £2,500 a year from a small side business may be able to use the allowance rather than deducting their actual business expenses.
However, there are a few important points:
- The allowance relates to trading income, not profit.
- You cannot claim actual expenses as well as the trading allowance against the same income.
- Self Assessment and Making Tax Digital obligations must still be considered separately.
For some smaller businesses, the increased allowance could simplify their tax position.
Self Assessment: Could monthly or quarterly tax payments replace payments on account?
Another important development for sole traders and landlords is the government’s plan to change how Self Assessment tax is collected from April 2029.
Currently, many individuals pay their Income Tax through two payments on account, due on 31 January and 31 July, with any balancing payment due the following January.
However, HMRC wants to move towards collecting tax closer to when the income is earned.
What’s changing from April 2029?
For individuals who have sufficient PAYE income alongside income reported through Self Assessment, the government plans to collect their estimated Self Assessment tax through their PAYE tax code each payday.
For sole traders and landlords who pay their Self Assessment tax directly to HMRC, the government is also considering replacing the existing twice-yearly payments on account with more frequent payments.
These could potentially be monthly or quarterly, although no final decision has been made.
Will this mean paying more tax?
Not necessarily. The proposed changes are about when tax is paid, rather than increasing the overall amount owed.
However, the transition could create cash flow challenges.
For example, a sole trader could still have an outstanding payment on account for the previous tax year while also being required to start making payments towards the current year.
This could mean additional pressure on business finances during the changeover period.
How does this affect Making Tax Digital?
With Making Tax Digital for Income Tax already requiring eligible sole traders and landlords to submit quarterly updates, more frequent tax payments could eventually bring reporting and payment dates closer together.
However, quarterly MTD submissions do not currently mean quarterly tax payments.
The government is still consulting on how more frequent payments could work, particularly for individuals with seasonal or irregular income.
We’ll continue monitoring these proposals and keep our clients informed as further details become available.
For now, we’d encourage sole traders and landlords to put money aside regularly for their tax liabilities, rather than relying on having sufficient funds available when the January and July deadlines arrive.
Business mileage: Increased allowance for using your own vehicle
There is also a change to the approved mileage rates for business travel using personally owned cars and vans.
The rate for the first 10,000 business miles increases from 45p to 55p per mile, with the higher rate becoming permanent.
From 6 April 2027, the rate for business mileage above 10,000 miles will increase from 25p to 35p per mile.
Example:
If you travel 12,000 qualifying business miles annually:
| Previous rates | New rates | |
| First 10,000 miles | £4,500 | £5,500 |
| Remaining 2,000 miles | £500 | £700 |
| Total allowance | £5,000 | £6,200 |
That’s an additional £1,200 in allowable mileage costs compared with the previous rates.
Remember, this isn’t £1,200 directly back into your pocket. For sole traders, it generally means a larger deduction against taxable business profits where the mileage basis is available.
Ordinary commuting between home and a permanent workplace doesn’t qualify.
Limited company directors: Changes to Business Asset Disposal Relief
If you’re considering selling your limited company or retiring from your business, this announcement is particularly important.
From 6 April 2027, the lifetime limit for Business Asset Disposal Relief (BADR) will reduce from £1 million to £500,000.
BADR can provide a reduced Capital Gains Tax rate on qualifying business disposals.
Reducing the lifetime limit means that business owners making larger gains could pay more Capital Gains Tax when selling their business.
For example, a director selling their company and making a qualifying £900,000 gain may only be able to claim BADR on £500,000 of that gain.
The remaining gain would generally be subject to the normal Capital Gains Tax rules.
Thinking about selling your company?
The timing of a disposal, your shareholding and whether you meet the BADR qualifying conditions could make a significant difference to your tax position.
We would strongly recommend obtaining advice before agreeing a sale or restructuring your business.
Company distributions: Further changes planned
The government has also announced plans to reform the taxation of certain distributions made by companies to individual shareholders from April 2028.
These changes are intended to address arrangements where company profits are extracted as capital rather than income.
They could affect certain company liquidations, shareholder exits and reorganisations.
The detailed rules are still subject to consultation, so the exact impact isn’t yet known.
For now, directors considering closing or restructuring their company should be aware that the tax treatment may change.
Capital allowances: Changes to tax relief on business equipment
Businesses purchasing plant, machinery and equipment should also be aware of changes to capital allowances.
The government has announced:
- A reduction in the main-rate writing-down allowance to 12% from April 2027.
- An increase in the main-rate first-year allowance to 50% from 1 January 2027.
Capital allowances determine how businesses obtain tax relief on qualifying capital expenditure.
The impact will depend on the type of asset purchased and the relief available.
Many smaller businesses can still benefit from the Annual Investment Allowance, which can provide 100% relief on qualifying expenditure, subject to the relevant conditions.
Our advice? Don’t rush into purchasing expensive equipment purely because of a tax announcement. The commercial need for the purchase should always come first.
Employers: National Minimum Wage increases
Employers will need to prepare for another increase in employment costs.
From 1 April 2027, the new hourly minimum wage rates will be:
| Employee category | Hourly rate |
| Aged 21 and over | £13.21 |
| Aged 18–20 | £11.27 |
| Aged 16–17 | £8.31 |
| Eligible apprentices | £8.31 |
For an employee aged 21 or over working 37.5 hours per week, the new minimum rate represents approximately £25,760 in annual gross pay.
Employers should also consider the additional costs of employer National Insurance and workplace pension contributions.
If you employ staff, now is a good time to review your payroll budgets and ensure your business can accommodate the changes.
Business rates: More relief for some small businesses
There is some welcome news for eligible businesses in the retail, hospitality and leisure sectors.
From April 2027, the government is increasing the thresholds for Small Business Rate Relief in England.
Eligible businesses with a rateable value of up to £18,000 could receive 100% relief, with tapered relief available up to £21,000.
The exact relief will depend on the property’s rateable value and whether the business meets the qualifying conditions.
For some smaller businesses operating from commercial premises, this could help reduce overheads.
VAT: Mandatory e-invoicing is coming
The Budget also outlines plans for mandatory VAT e-invoicing from April 2029.
This means businesses will need to prepare for further changes to how invoices are issued and processed electronically.
Although implementation is still some way off, it reinforces the government’s continued move towards digital tax administration.
Businesses already using cloud accounting software, such as Xero, may find it easier to adapt as further details become available.
We’ll continue monitoring the requirements and advising our clients as the implementation date approaches.
Household finances: Energy and fuel costs
The Budget also includes measures aimed at reducing household costs.
These include:
- Electricity bills: The temporary 0% VAT rate on qualifying domestic electricity has been extended until July 2027.
- Household energy support: Eligible households in council tax bands A–D in England are expected to receive £100 through the council tax system from January 2027.
- Fuel duty: The temporary 5p-per-litre fuel duty reduction has been extended until July 2027.
While these measures won’t affect everyone equally, they may provide some relief against household running costs.
Self-employed parents: New parental allowance
Another announcement worth highlighting is the introduction of parental pay for eligible self-employed fathers, partners and adopters from April 2029.
Historically, statutory parental pay has been more limited for self-employed individuals.
The new arrangements are intended to provide additional support, although eligibility and the detailed rules will need to be considered when the scheme is introduced.
What should you do following the Autumn Budget 2026?
Not every announcement will affect every business or individual.
However, there are several areas worth reviewing now:
- Landlords: Review expected rental profits and future Income Tax liabilities.
- Sole traders: Consider whether the increased trading allowance or mileage rates will affect your tax position.
- Limited company directors: Review any plans to sell, close or restructure your company.
- Employers: Budget for the April 2027 National Minimum Wage increases.
- Businesses purchasing equipment: Check which capital allowances are available before committing to expenditure.
- VAT-registered businesses: Keep an eye on the future e-invoicing requirements.
The most important thing is to understand which changes apply to your circumstances, rather than assuming every Budget announcement will affect you.
How can DNA Accountants help?
Tax changes can be confusing, particularly when different rules apply to sole traders, limited companies, landlords and individuals.
At DNA Accountants, we understand that every business is different. There isn’t a one-size-fits-all approach to tax planning.
Whether you’re concerned about higher rental taxes, planning to sell your business or simply want to understand how the Autumn Budget 2026 affects you, we’re here to help.
Want to discuss how these changes could affect you or your business?
Get in touch with DNA Accountants or book a meeting with our team.
Further reading: HM Treasury – Budget 2026