Autumn 2026 Budget Review

What the announcements could mean for you and your business

The Autumn Budget included measures on tax, business investment, VAT, household energy costs and the timing of tax payments. Some changes have firm dates; others still need legislation or more detailed guidance.

We have highlighted the points most likely to affect our clients, including practical questions the initial announcements left unanswered.

Founders’ Relief: who might qualify?

The new relief is intended to give qualifying founders and early investors a 10% capital gains tax rate on up to £10 million of lifetime gains. It is due to apply to disposals from 6 April 2027, but the detailed rules are still under consultation.

The published proposal includes several tests. Among other conditions:

– The individual must have held at least 25% of the company’s ordinary share capital when the relevant trade, or preparation for it, began.
– They must have held the shares for at least five tax years before disposal and been UK resident for at least five continuous tax years.
– The company must have a substantial UK presence, be carrying on the relevant trade, and have at least £10 million turnover and 15 qualifying full-time equivalent employees in the accounting period before disposal.
– It must also meet at least two of three growth or innovation tests: qualifying turnover growth, qualifying employee growth, or at least £1.5 million of qualifying R&D expenditure claimed for tax relief during the relevant period.

Some activities, including dealing in land, financial services and property development, are excluded. Claims to Business Asset Disposal Relief or Investors’ Relief made from 6 April 2027 will reduce the £10 million lifetime limit available under Founders’ Relief. The Government’s technical consultation closes on 30 November 2026, so these conditions may change before the rules are finalised.

This is a tightly targeted relief, not a general 10% rate for anyone who owns shares in a growing company. We recommend taking advice early if a future sale is being considered.

Capital allowances: what does the 50% First Year Allowance cover?

From 1 January 2027, the main-rate First Year Allowance is due to rise from 40% to 50%. It is for qualifying expenditure on plant and machinery in the main-rate pool. Cars and second-hand assets are excluded. The allowance is available to incorporated and unincorporated businesses, including in circumstances where full expensing or the Annual Investment Allowance may not be available, such as certain assets bought for leasing. Overseas leasing is excluded.

Annual Investment Allowance and Full expensing

The Budget also says that full expensing is being maintained. The Annual Investment Allowance remains £1 million. The new 50% allowance is therefore an additional route for qualifying expenditure where AIA or full expensing is unavailable or not preferred; it cannot be claimed on top of another allowance for the same expenditure. The main-rate writing-down allowance is due to fall to 12% from April 2027.

Corporation tax and business rates

The main corporation tax rate remains at 25%. The small profits rate, marginal relief and R&D reliefs are unchanged in the announcements.

Small business rate relief is due to increase from £12,000 to £18,000. The Chancellor said this would take 70,000 businesses out of paying business rates. The detailed measure is focused on retail, hospitality and leisure properties in England, so eligibility will depend on the property and the final rules.

Business Asset Disposal Relief

From April 2027, the lifetime limit for gains qualifying for Business Asset Disposal Relief is due to fall from £1 million to £500,000. The Chancellor estimates that three in four claimants will see no change.

Bank Corporation Tax Surcharge: is the increase really temporary?

The surcharge is scheduled to rise from 3% to 6% for 15 months, from 1 January 2027 to 31 March 2028, then return to 3% from 1 April 2028. The Government describes it as temporary and the published measure includes a return date. That is the current plan; as with any tax measure, a future government could amend the law, but there is no announcement that the increase is intended to continue beyond March 2028.

Overseas services and the reverse charge

From 1 April 2027, the reverse charge for services supplied from overseas will apply only where the UK business customer is VAT registered. If the UK customer is not VAT registered, the overseas supplier will instead be responsible for charging and accounting for UK VAT.

HMRC has published a policy paper explaining the change, but the practical detail for overseas suppliers is still limited. Businesses buying services from overseas should review their arrangements and check how suppliers plan to account for UK VAT from April 2027. We will update clients when further guidance is published.

Online marketplaces: what if sales are split between eBay and Amazon?

From October 2027, online marketplaces will account for VAT on relevant sales made through their platforms by UK VAT-registered businesses. For a non-registered business, the new marketplace test is applied separately to each platform: the threshold is more than £90,000 of sales on an individual marketplace. The Government says the rules do not change the existing VAT registration obligations.

For example, a business with £50,000 of sales on eBay and £50,000 on Amazon is below the £90,000 marketplace threshold on each platform. But if those are taxable sales, its combined turnover is £100,000. The normal VAT registration threshold is based on total taxable turnover, not turnover on each platform, so the business may already have to register for VAT. Once registered, the marketplace rules apply to its qualifying sales through the platforms.

Second-hand goods and business-to-business sales are excluded from the new marketplace rules. HMRC says it will publish detailed guidance before implementation.

VAT on workplace and public EV charging

From 1 November 2026, electricity supplied through public and workplace chargepoints is treated as non-domestic and standard-rated at 20%. This confirms the VAT treatment of the electricity supplied through those chargepoints.

The change does not, by itself, mean an employer has to start charging employees for workplace charging. Where an employer provides charging free to staff, the Budget announcement does not set out a new charge to impose on employees. The employer should, however, consider the VAT on its electricity costs and apply the normal input tax rules, including keeping appropriate records and considering business and private use. HMRC’s existing guidance also provides a benefit-in-kind exemption for workplace charging where the conditions are met, including general availability to employees.

Other VAT announcements

– Domestic electricity: the temporary 0% VAT rate is due to continue until 31 July 2027.
– Social housing land: a new zero rate is due to apply from 1 April 2027 when land is sold to a registered provider of social housing.
– Larger taxi and private hire operators: from 2 January 2028, certain larger operators will account for VAT on the full fare. The Government’s lead option is a £50 million annual fare-turnover threshold.
– Travel services: a call for evidence is reviewing the VAT treatment of travel services, including the Tour Operators’ Margin Scheme. It closes on 31 January 2027.

Income tax and National Insurance thresholds

Income tax rates and thresholds remain frozen, and the freeze on income tax and National Insurance thresholds is due to continue until 2030/31.

Savings and property income

From 6 April 2027, the income tax rates applying to savings income are due to be 24% for basic-rate taxpayers, 44% for higher-rate taxpayers and 49% for additional-rate taxpayers.

Separate rates will apply to property income in England, Wales and Northern Ireland: 24%, 44% and 49%. The Budget does not increase tax on dividend income.

ISAs, inheritance tax and pensions

The annual ISA limit remains £20,000. The Government will work with the sector on a proposed Starter ISA, and a First Time Buyer ISA is due to replace the Lifetime ISA for new savers from 6 April 2029.

Inheritance tax nil-rate bands are due to remain unchanged until April 2031.

The Government says pensioners with total income up to the value of the full new State Pension will not pay income tax from 6 April 2027 to 5 April 2030. Previously announced changes to the pensions triple lock are due to take effect in 2030.

Household energy payment

Households in council tax bands A to D in England are due to receive a £100 payment this winter, delivered by local authorities from January 2027. The scheme is costed at £2.6 billion. The Government has also announced £100 million for local authorities to provide targeted help to households acutely affected by rising energy bills.

It is reasonable to ask how well targeted the £100 payment is: eligibility is based on council tax band, rather than household income. The separate local-authority funding is intended to help households facing more acute pressure.

Gas standing charges

The Government has asked Ofgem to remove standing charges from domestic gas bills, aiming for implementation by the end of 2027 or as soon as possible afterwards. The plan is not for the Government to pay the standing charge on behalf of households. Instead, suppliers are expected to move those fixed costs into the gas unit rate. This gives households more control over costs if they use little or no gas, but it does not mean the underlying costs disappear. The Government says it will consider targeted help for households that do not benefit automatically.

Mileage rates

The 45p rate for the first 10,000 business miles increased to 55p from 6 April 2026. The Budget now makes that increase permanent and raises the rate for business miles above 10,000 from 25p to 35p from 6 April 2027. These rates apply to employees using their own cars or vans for work and to the simplified mileage rates used by self-employed people.

The 5p fuel duty cut is also due to continue until 1 July 2027.

Self Assessment: more frequent payments from 2029

The Government has confirmed a move towards smaller, more regular payments from April 2029. It has not yet decided whether payments will be monthly or quarterly.

The change is expected to affect Self Assessment taxpayers who currently have to make Payments on Account, not only self-employed people. That can include people with other types of taxable income outside PAYE. Taxpayers whose previous-year bill was under £1,000, or who paid more than 80% of it outside Self Assessment, are generally outside the current Payments on Account rules.

Where a taxpayer has enough PAYE income, the Government says they may be able to pay through PAYE. Payments are expected to be based on the previous year’s tax, with the ability to update the estimate if circumstances change. The tax due is not intended to increase; the timing of payments changes.

There will be a transition year in 2029/30. Taxpayers may have to make the final payment due under the current timetable while also beginning payments under the new system. HMRC has recognised this overlap and says it will provide support and payment plans, but the final frequency and detailed arrangements are still to be settled.

VAT payments by Direct Debit

From April 2029, businesses will be required to set up a Direct Debit instruction for VAT and PAYE return payments, unless exempt.

This does not mean every VAT return must immediately be paid by Direct Debit. Businesses will be able to continue using the current payment methods before the due date. The Direct Debit is intended as a safeguard to collect a return liability that remains unpaid after its due date. The published announcement refers to VAT and PAYE return liabilities; it does not say that the requirement will extend to assessments or other HMRC debts.

Other announcements

The Budget also included a higher gambling duty rate for higher-stakes machines, a young entrepreneurs’ allowance, additional support for women-led businesses and further devolution of tax revenues to regional mayors.

Mandatory VAT e-invoicing is planned from 1 April 2029. The Government’s roadmap identifies PEPPOL as the core interoperability framework. Key requirements are due to be finalised between October 2027 and April 2028. A separate consultation is considering whether e-invoice data might be reported to HMRC in future; no decision has been made. That consultation closes on 20 January 2027.

How MJH can help

The impact will vary depending on your business, income and plans. Some of the announcements need further legislation or guidance, and we will keep clients updated as details emerge.

Please contact us if you would like to discuss how the Budget may affect you or your business. If you are not already a client, we would be pleased to meet with you and provide a competitive quote. All new client consultations are free and without obligation.

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