For landlords, people with savings, company owners, sole traders & employers
Budget 2026: What It Really Means for You & Your Business
By Abbie Browne · 29 October 2026 · 7 min read
Will this affect my tax bill? Do I need to do anything now? The Chancellor delivered the 2026 Budget on Wednesday 28 October, and those are the questions we're getting.
The short version: the headline rates of income tax, National Insurance and VAT aren't going up, and most of you don't need to act today. But there are real changes for landlords, savers, company owners, sole traders and anyone buying equipment. Here's what matters.
At a glance
| Area | What's changing | From |
|---|---|---|
| Property & savings income | Tax up 2 points | 6 Apr 2027 |
| Business Asset Disposal Relief | Limit halved to £500,000 | 6 Apr 2027 |
| Writing-down allowance | 14% to 12% | Apr 2027 |
| First Year Allowance | 40% to 50% | 1 Jan 2027 |
| Trading Allowance | £1,000 to £3,000 | 6 Apr 2027 |
| Retail, hospitality & leisure rates relief | Threshold up to £18,000 | 1 Apr 2027 |
| Income tax, Corporation Tax, dividends | No change | 2027/28 |
Income tax: main rates unchanged
The main rates of income tax stay the same for 2027/28, and the Personal Allowance stays at £12,570.
| Tax band | 2026/27 | 2027/28 | Change |
|---|---|---|---|
| Personal Allowance | £12,570 | £12,570 | None |
| Basic rate | 20% | 20% | None |
| Higher rate | 40% | 40% | None |
| Additional rate | 45% | 45% | None |
Basic rate applies to taxable income up to £37,700. Higher rate applies from £37,701 to £125,140. Additional rate applies above £125,140. The Personal Allowance reduces once income goes over £100,000.
How this affects property and savings income
This is where the Budget bites. From 6 April 2027, the tax rates on property income and savings interest go up by a further 2 percentage points. That's on top of the 2-point rise announced last year.
| Tax band | Today | From 6 April 2027 | Change |
|---|---|---|---|
| Basic rate | 20% | 24% | +4 points |
| Higher rate | 40% | 44% | +4 points |
| Additional rate | 45% | 49% | +4 points |
The property rates apply across England, Wales and Northern Ireland. The savings rates apply across the UK.
What isn't changing
| Allowance | Amount |
|---|---|
| Personal Savings Allowance (basic-rate taxpayer) | £1,000 |
| Personal Savings Allowance (higher-rate taxpayer) | £500 |
| Cash ISA annual limit | £20,000 |
The government is also exploring a new incentive for first-time stocks and shares ISA investors. The Treasury says 84% of income taxpayers won't be affected. If you're a landlord or have significant savings, you probably are.
How this affects limited company owners
Corporation Tax and dividend tax rates are unchanged.
| Corporation Tax | 2026/27 | 2027/28 |
|---|---|---|
| Small profits rate (profits up to £50,000) | 19% | 19% |
| Main rate (profits over £250,000) | 25% | 25% |
Marginal relief may be available between £50,000 and £250,000. Associated company rules still apply, so if you control more than one company, get in touch.
| Dividend tax band | 2026/27 | 2027/28 |
|---|---|---|
| Ordinary rate | 10.75% | 10.75% |
| Upper rate | 35.75% | 35.75% |
| Additional rate | 39.35% | 39.35% |
The £500 dividend allowance stays the same.
Worth knowing
- Selling your business? The Business Asset Disposal Relief lifetime limit drops from £1 million to £500,000 for disposals from 6 April 2027. The Treasury says three-quarters of claimants will still get relief on their whole gain. Talk to us before you make any decisions.
- Distribution rules are being reworked from April 2028. The aim is consistent treatment however a payout is structured. Capital treatment is protected for genuine changes of ownership, including family successions. Draft legislation arrives in 2027, so there's nothing to do yet.
- Share options get bigger. The EMI limit doubles from £60,000 to £120,000 from 6 April 2027.
- R&D claims get simpler. The claim notification form goes from 1 April 2027.
How this affects sole traders & the self-employed
No increase to the main rates, and the Personal Allowance stays put. Your bill still depends on your taxable profits, any other income and your own circumstances. There are some positives:
| What | Before | After | From |
|---|---|---|---|
| Trading Allowance | £1,000 | £3,000 | 6 Apr 2027 |
| Mileage, first 10,000 miles | 55p (temporary) | 55p (permanent) | 6 Apr 2026 |
| Mileage, over 10,000 miles | 25p | 35p | 6 Apr 2027 |
| Parental pay for self-employed fathers & partners | None | Introduced | Apr 2029 |
Buying equipment or machinery?
Capital allowances are changing in both directions, so timing matters.
| Allowance | 2026/27 | 2027/28 | Change |
|---|---|---|---|
| Annual Investment Allowance | £1,000,000 | £1,000,000 | None |
| Full expensing, main rate (companies) | 100% | 100% | None |
| First Year Allowance, main rate | 40%, then 50% from 1 Jan 2027 | 50% | Up |
| Writing-down allowance, main rate | 14% | 12% | Down |
| Writing-down allowance, special rate | 6% | 6% | None |
For cars, the writing-down allowance for lower-emission cars (up to 50g/km) falls from 14% to 12%. Higher-emission cars stay at 6%. New zero-emission cars keep 100% first-year relief.
For employers
Minimum wage rates rise by 3.9% on 1 April 2027. Budget your payroll costs now.
| Rate | Hourly, from 1 April 2027 |
|---|---|
| National Living Wage | £13.21 |
| Aged 18 to 20 | £11.27 |
| Aged 16 to 17 and eligible apprentices | £8.31 |
Business rates
From 1 April 2027, in England:
| Who | What changes |
|---|---|
| Eligible retail, hospitality & leisure | Full Small Business Rates Relief up to a rateable value of £18,000, tapering to £21,000. About 70,000 more businesses will pay nothing. |
| Other retail, hospitality & leisure properties | Bill increases capped at inflation for two years. |
| Pubs, social clubs, most live music venues | Relief rises from 15% to 35%. The very largest venues (rateable value £1m or more) are excluded. |
| Vape shops, adult gaming centres | Lose their reliefs. |
If you operate from commercial premises, it's worth checking. We're happy to.
VAT & admin changes coming down the line
None of this is urgent, but it's good to know what's ahead.
| When | What |
|---|---|
| April 2027 | The reverse charge on overseas services is restricted to VAT-registered UK businesses. |
| October 2027 | Online marketplaces must collect VAT on sales by UK sellers over £90,000 a year. |
| April 2028 | The £2,500 expenses threshold in self-assessment goes. |
| April 2029 | Self-assessment payers make more regular in-year payments. VAT and PAYE must be paid by direct debit. VAT invoices must be e-invoices. |
| July 2029 | HMRC can recover small tax debts directly from the bank accounts of people who repeatedly don't pay. |
Should you be worried?
Not really. There's no need for sudden action. But it's worth planning ahead if you:
- Receive rental income or savings interest
- Are thinking about selling your business
- Are planning a major equipment purchase
- Want to review how you take income from your company
- Are a sole trader with side income or lots of business mileage
A final word from us
The headline rates are staying put, which is a relief. The detail is where it gets interesting, especially for anyone with property or savings income, and anyone thinking of selling up. A bit of planning now can save you a lot later.
We'll keep an eye on further developments and let you know if anything else comes up.
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