Autumn Budget 2026: Key Changes and Their Impact in the UK

The Autumn Budget 2026, delivered on 28 October 2026, introduced important changes affecting UK taxpayers, businesses and households. The main announcements include higher tax rates on property and savings income, changes to business tax reliefs, increases in the National Minimum Wage, support with household energy costs, and reforms to tax administration. While the government avoided broad increases in the main rates of income tax and Corporation Tax, several targeted measures will affect financial planning from 2027 onwards.

Here is a summary of the main changes and their practical implications.

Autumn Budget 2026: The main changes at a glance

The Autumn Budget 2026 combines measures to ease immediate cost pressures with changes to the taxation of income, business investment and compliance.

The three main themes are:

• Personal taxation: Higher tax rates on property and savings income, alongside a new allowance for certain pensioners.
• Business taxation: Revised capital allowances, a lower Business Asset Disposal Relief limit and changes to business rates.
• Household and employment costs: Increases in minimum wage rates, energy bill support and reforms affecting future tax payments.

Main announcement	Change	Effective date
Property income tax	Rates increase by 2 percentage points	6 April 2027
Savings income tax	Rates increase by 2 percentage points	6 April 2027
Business Asset Disposal Relief	Lifetime limit falls from £1 million to £500,000	6 April 2027
Capital allowances	First-year allowance rises to 50%; main writing-down allowance falls to 12%	January and April 2027
National Living Wage	Rises to £13.21 per hour for workers aged 21 and over	1 April 2027
Fuel duty	Current freeze continues until 1 July 2027	2027
Household energy support	£100 payment for eligible households in England	From January 2027
Self Assessment	More regular in-year tax payments for taxpayers making payments on account	From April 2029

The announcements and implementation dates are set out in the official HM Treasury Budget 2026 document.

Autumn Budget 2026: Changes to personal taxation

Higher taxes on property and savings income

One of the most significant personal tax announcements is the increase in income tax rates on property and savings income.

From 6 April 2027, the new rates will be:

Income category	Basic rate	Higher rate	Additional rate
Property income	24%	44%	49%
Savings income	24%	44%	49%

The property income rates will apply in England, Wales and Northern Ireland, while the savings income rates will apply across the UK.

For landlords, the change could reduce the after-tax profitability of rental properties. Individuals receiving taxable savings interest outside tax-efficient accounts may also face higher liabilities.

Changes affecting pensions and savings

The Budget also includes measures intended to protect certain pensioners and preserve tax-efficient saving opportunities.

• Pension Tax Allowance: A new allowance will be introduced from April 2027 so that pensioners whose total income does not exceed the full new State Pension avoid a small income tax liability arising from State Pension increases.
• Cash ISAs: The annual cash ISA subscription limit remains at £20,000, preserving an important tax-efficient savings opportunity.
• Employment and dividends: No changes were announced to the main tax rates on employment income or dividend income.

For individuals with rental income, substantial taxable savings or several income sources, reviewing the combined effect of these changes will be particularly relevant.

Autumn Budget 2026: Changes affecting businesses

Corporation Tax and capital allowances

The government maintained the headline Corporation Tax rate at 25%, while announcing changes to the tax relief available on qualifying business investment.

The principal changes are:

• First-year allowance: The main rate first-year allowance increases from 40% to 50% for qualifying expenditure incurred from 1 January 2027.
• Writing-down allowance: The main rate reduces from 14% to 12% from April 2027.
• Full expensing: The existing full-expensing arrangements remain available for qualifying expenditure, subject to the applicable conditions.

These changes make the timing and nature of capital expenditure particularly relevant for businesses planning significant investment.

Businesses can review our guide to capital allowances for UK businesses for additional context on how investment reliefs operate.

Business Asset Disposal Relief

The Budget also introduces an important change for business owners considering selling their companies or other qualifying business assets.

From 6 April 2027, the lifetime limit for gains eligible for Business Asset Disposal Relief will fall from £1 million to £500,000.

The reduced Capital Gains Tax rate of 18% will continue to apply to eligible gains within the relevant lifetime limit.

Although this measure will not affect every business sale, it may materially change the tax position of entrepreneurs planning a disposal. The timing of a transaction and whether the qualifying conditions are met will need careful consideration.

Employment costs and business rates

The Autumn Budget 2026 also introduces measures with direct consequences for employers and businesses operating physical premises.

National Minimum Wage increases

From 1 April 2027, the following hourly rates will apply:

Worker category	New hourly rate
National Living Wage, aged 21 and over	£13.21
Aged 18 to 20	£11.27
Aged 16 to 17	£8.31
Eligible apprentices	£8.31

These increases represent a 3.9% rise across the listed rates.

Employers should account for the additional payroll costs when preparing staffing budgets, pricing decisions and cash-flow forecasts.

Business rates support

The government also announced support for eligible retail, hospitality and leisure businesses in England.

The main measures include:

• Expanded Small Business Rate Relief: The eligibility threshold will increase, removing more qualifying properties from business rates.
• Additional support for certain venues: Pubs, social clubs and eligible live music venues will receive increased relief.
• Two-year protection: Measures will freeze qualifying retail, hospitality and leisure business rates bills in real terms for 2027/28 and 2028/29.

Businesses should assess their eligibility based on the property, rateable value and applicable relief conditions.

VAT and changes to tax compliance

Although the Autumn Budget 2026 did not announce a general increase in the standard VAT rate, it introduced changes to VAT administration and future tax collection.

Three developments are particularly relevant:

• VAT on online marketplace sales: From October 2027, qualifying sales made by UK businesses through online marketplaces will become subject to revised collection responsibilities, with marketplaces responsible for accounting for VAT in specified circumstances.
• Electronic invoicing: From April 2029, VAT invoices will be required to follow a specified electronic format.
• More frequent tax payments: From April 2029, Self Assessment taxpayers who make payments on account will be required to make more regular payments during the tax year.

The government also plans to require direct debit arrangements for certain VAT and PAYE liabilities from April 2029, while allowing businesses to settle amounts through alternative methods before the relevant payment cut-off.

These measures will increase the importance of accurate bookkeeping, reliable accounting systems and cash-flow planning.

Businesses can also consult WellTax’s guide to the UK VAT registration threshold for guidance on an existing VAT compliance obligation.

Autumn Budget 2026: Household costs and the economy

Beyond taxation, the Autumn Budget 2026 includes measures intended to reduce pressure on household finances.

The main announcements include:

• Energy support: A £100 Household Energy Payment for eligible households in council tax bands A to D in England from January 2027, with funding for comparable support elsewhere in the UK. The temporary VAT reduction on domestic energy will also be extended until July 2027.
• Fuel duty: The existing freeze continues until 1 July 2027, when the government plans to reverse the temporary 5p reduction and apply the scheduled duty increase.
• Housing support: Additional investment in social and affordable housing, together with plans for a new First Time Buyer ISA from April 2029.

The wider economic outlook remains challenging. The Office for Budget Responsibility has reduced its forecast for UK economic growth in 2027 to 1.0% and increased its inflation forecast for that year to 3.4%.

This means that households and businesses may continue to face pressure from higher operating costs, borrowing costs and living expenses, despite the targeted measures announced.

What should individuals and businesses do following the Autumn Budget 2026?

The Autumn Budget 2026 creates several practical considerations for taxpayers, even where the changes will not take effect immediately.

• Individuals and landlords should review the potential impact of the higher property and savings income tax rates from April 2027, particularly where these represent significant sources of income.
• Businesses and employers should revisit investment plans, capital allowance claims, payroll forecasts and eligibility for business rates relief.
• Business owners considering a sale should assess the reduction in the Business Asset Disposal Relief lifetime limit before making decisions about a disposal.

Future changes to Self Assessment payments and VAT administration also make it sensible to review accounting systems well ahead of their planned implementation.

At WellTax, we support UK businesses and individuals with Corporation Tax, personal tax, VAT and accounting matters, including the practical implications of tax changes for internationally active businesses.

The key message from the Budget is that, although the main rates of income tax and Corporation Tax remain unchanged, targeted changes to investment reliefs, property income, savings and tax administration could still have a material financial impact. Reviewing those changes against individual circumstances will be more useful than focusing solely on headline tax rates.

Written by Luca Marin, Partner , WellTax.