The Autumn 2026 Budget introduces a range of tax changes affecting individuals, pensioners and businesses. John Healey’s first Budget was delivered against a backdrop of global economic uncertainty, which the Chancellor highlighted as a key factor in economic forecasts and policy decisions.
Despite speculation surrounding Capital Gains Tax (CGT) reform, no wider changes were announced. However, several measures will affect business disposals, investment income, employment costs and tax reliefs.
John Healey’s first budget has been described as ‘steady as she goes’, at a time when the UK economy is anything but.
Changes are not as drastic as they otherwise might have been, but they could still have a serious impact if they apply to you. Shaw & Co can help you navigate these changes.
Income Tax Rates
From April 2027, tax rates on savings and property income will rise by a further 2%, taking the total increase announced across the two Budgets to 4%. The new rates will be 24% for basic-rate taxpayers, 44% for higher-rate taxpayers and 49% for additional-rate taxpayers.
State Pension and Personal Allowance
Pensioners relying solely on the State Pension will benefit from an increased personal allowance of £13,097, aligned with the pension increase.
Trading Allowances
There will be an extension to the trading allowance from £1,000 to £3,000 for tax-free income from new ventures.
Minimum Wage
Minimum wage rates will rise by 3.9% to £13.21 per hour for those aged 21 and over, £11.27 for 18–20-year-olds and £8.31 for under-18s and apprentices.
Mileage Rates
The tax-free mileage allowance for employees using personal vehicles for business will be made permanent at 55p per mile for the first 10,000 miles and 35p thereafter, up from 25p (applicable from the 6th April 2027).
Business Asset Disposal Relief
From 6 April 2027, the lifetime limit for Business Asset Disposal Relief (BADR) will be reduced from £1 million to £500,000, increasing Capital Gains Tax liabilities for business owners disposing of qualifying businesses. This change creates an opportunity for eligible individuals to secure additional tax savings of up to £30,000 by completing qualifying disposals on or before 5 April 2027, before the reduced lifetime limit takes effect.
To put this into perspective, Entrepreneurs’ Relief, as it was known in 2016, previously provided a preferential Capital Gains Tax rate of 10% on qualifying lifetime disposals of up to £10 million. From 6 April 2027, the lifetime allowance will have fallen to just £500,000, with the preferential tax rate increasing to 18%. This represents a 95% reduction in the lifetime allowance and, when compared with the maximum tax savings available under the original regime, an effective reduction in the overall value of the relief of approximately 98%.
Tax rates on your investments have changed.
Investors will need to bear this in mind when tax planning.
Founders Relief
A new Founders Relief will allow qualifying founders to pay CGT at 10% on up to £10 million of lifetime gains, subject to eligibility conditions. However, it is unlikely to apply to the majority of capital disposals due to the strict criteria.
HMRC New Powers
HMRC will gain powers to collect unpaid taxes directly from individuals’ bank accounts where they can afford to pay but fail to do so. Taxpayers should ensure liabilities are settled promptly, or payment difficulties are addressed with HMRC.
Business Rates
The business rates threshold for retail, hospitality and leisure businesses in England will rise from £12,000 to £18,000, with around 70,000 businesses expected to pay no business rates. Relief will be withdrawn from vape shops and gambling centres.
Machine Games Duty
From April 2027, Machine Games Duty will increase from 20% to 25% on higher-stakes machines, increasing costs for affected gambling operators.
Alcohol Duty
Alcohol duty will increase in line with inflation from February 2027. Smaller breweries and cider makers will receive an additional £10 million a year in tax relief to help offset costs.
Parental Pay
From April 2029, eligible self-employed fathers, partners and adopters will gain access to parental pay, extending financial support to more self-employed individuals.
ISAs
The Chancellor announced he will reverse his predecessor’s decision to cut the tax-free allowance on cash individual savings accounts (ISAs) from £20,000 to £12,000 a year from April 2027.
Our Summary
The Autumn Budget 2026 introduces targeted support for smaller businesses and pensioners while increasing taxes on savings and property income and reducing certain business reliefs. With changes also affecting wages, mileage and tax collection, individuals and businesses should review their financial and tax planning ahead of the relevant implementation dates.
How Shaw & Co Can Help
At Shaw & Co, we can help you make the best use of the current legislation, tailored to your unique financial situation.
We encourage businesses and individuals in Norwich and across the UK to reach out for a consultation.
Contact Shaw & Co today on 01603 975976 to find out how we can help you.