Introduction
After months of speculation, the Chancellor has unveiled the government’s Autumn Budget, setting out tax and spending plans designed to balance economic growth with cost-of-living pressures. The Budget confirmed £26 billion of tax increases, raising the UK tax burden to a record high by the end of this Parliament and freeing up fiscal space for public spending.
In our view, it was a Budget that added more complexity into an already complex tax system. While businesses largely avoided headline tax hikes, several measures will increase costs, including the rise in the National Minimum and Living Wage, reduced writing-down allowances from 18% to 14%, and limits on National Insurance relief for pension salary sacrifice. The Budget also extends the freeze on income tax and National Insurance thresholds, while imposing targeted increases on dividends, property, and savings income. High-value property owners will face a council tax surcharge on homes worth over £2 million.
This guide summarises the key measures affecting businesses, individuals, and the wider economy, providing a concise reference for planning and compliance.
BUSINESSES
Corporation Tax
Headline rate capped at 25%, with Small Profits Rate and marginal relief unchanged.
Permanent full expensing continues which allows businesses to deduct the full cost of qualifying capital investments from their taxable profits in the year they are incurred. Qualifying assets: Typically plant and machinery, including some equipment and zero-emission vehicles.
100% first-year allowances (FYA) for zero-emission cars and EV charge points extended to 31 March 2027.
From April 2026, main rate writing-down allowances fall from 18% to 14%.
Annual Investment Allowance remains at £1m for all businesses, including unincorporated ones.
Writing down allowances remain flexible, allowing businesses to choose which allowances to claim for main and special rate machinery.
Penalty for late submissions of corporation tax returns will double from £100 to £200, and from £200 to £400 if more than three months late.
Making Tax Digital (MTD)
April 2026 rollout for sole traders/landlords with income over £50,000
April 2027 for those over £30,000.
The government sets out plans to expand MTD for Income Tax to sole traders and landlords with income over £20,000 from April 2028
Employment & Minimum Wage
National Living Wage rises 4.1% to £12.71/hr from April 2026.
National Minimum Wage for 18–20-year-olds rises to £10.85/hr and for 16–17-year-olds and apprentices to £8.00/hr.
Cost of hiring an employee over 21 years for 40 hours/week will exceed £30,000 for employers.
Government guarantees six-month paid work placements for eligible 18–21-year-olds on Universal Credit who have been looking for work for 18 months, covering 25 hours/week at relevant minimum wage plus support.
Inheritance Tax (IHT)
No rate changes; thresholds frozen until April 2031.
Nil rate band £325,000; residence nil rate band £175,000; taper threshold £2m.
Unused pension funds and death benefits included in estates from April 2027.
Capital Gains Tax (CGT)
Business Asset Disposal Relief & Investors’ Relief: 10% → 14% (April 2025), then 18% (April 2026).
Investors’ Relief lifetime limit reduced from £10m → £1m for disposals on/after 30 October 2024. Investors’ Relief (IR) provides for a lower rate of CGT to be paid on the disposal of ordinary shares in an unlisted trading company where certain criteria are met, subject to a lifetime limit of £10 million of qualifying gains for an individual.
Lower main CGT rate remains 18%; higher rate remains 24%.
VAT
No changes to VAT thresholds of £90,000, registration limit or rates.
INDIVIDUALS
Income Tax
Personal allowance (£12,570) and higher-rate threshold (£50,270) frozen until 2030–31.
Dividend tax rates from April 2026: ordinary 10.75%, upper 35.75%, additional 39.35%.
Property and savings income tax rates from April 2027: 20% → 22% (basic), 40% → 42% (higher), 45% → 47% (additional).
Finance cost relief provided at basic property rate of 22%; current exemptions remain unaffected.
National Insurance & Pension Salary Sacrifice
From April 2029, NIC exemption on salary sacrifice capped at £2,000/year; employee and employer NICs charged above this amount.
Threshold Freeze
Personal Allowance maintained at £12,570.
Basic rate limit frozen at £37,700.
Higher rate threshold remains at £50,270.
Company Cars & EVs
Appropriate percentages for zero-emission and electric vehicles increase by 2% per year in 2028/29 and 2029/30, reaching 9% in 2029/30.
EV (zero-emission company car) BIK rates: 2025/26: 3%, 2026/27: 4%, 2027/28: 5%, 2028/29: 7%, 2029/30: 9%.
Electric car drivers pay-per-mile charge (eVED) from April 2028: 3p/mile (BEV), 1.5p/mile (hybrid).
ISAs
From 6 April 2027, annual cash ISA limit £12,000 within overall £20,000 limit.
Annual subscription limits remain: ISAs £20,000, Lifetime ISAs £4,000, Junior ISAs/Child Trust Funds £9,000 until 5 April 2031.
Savers over 65 may continue to save up to £20,000 in cash ISA.
Enterprise Investment Scheme (EIS) & VCT
Income tax relief for VCT investors reduced from 30% → 20% from April 2026.
OTHER
Additional Resources for HMRC and Tackling Fraud
£89m investment over five years to increase HMRC staff for better tax collection.
£25m investment over five years to recruit Insolvency Service staff to disqualify rogue directors.
Amendments to the Company Directors Disqualification Act 1986 to extend circumstances for director disqualification; to be legislated in future Finance Bill.
Social & Property Measures
Two-child benefit limit removed from April 2026.
High-value council tax surcharge from April 2028: properties >£2m to pay £2,500–£7,500.
Regulated rail fares frozen in England for 2026/27.
Other Tax & Administration
Remote online gaming duty rises from 21% → 40% from April 2026.
E-invoicing mandatory for VAT from April 2029; government to publish implementation roadmap at Budget 2026.
How the Autumn Budget may affect you and your business
If you would like to discuss how these changes in tax policy may affect you and/or your business, please contact your usual advisor at Chart Accountancy. Our team can help you understand the implications of the Autumn Budget, assess potential impacts on your finances, and explore planning opportunities to ensure you remain compliant while making the most of available allowances and reliefs.
Whether you are an individual, a small business, or a larger company, we can provide tailored guidance on income tax, corporation tax, National Insurance, dividends, savings, capital gains, company cars, pensions, and other key measures announced in the Budget. Early planning can help you minimise unexpected costs and take advantage of any reliefs or exemptions where applicable.
Get in touch with Chart Accountancy to discuss your position and ensure you are fully prepared for the changes ahead.
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