Autumn Budget 2026: the key points in plain English

The Chancellor, John Healey, delivered the Autumn Budget on Wednesday 28 October 2026. Grab a cuppa – here’s what was announced, who it affects and, just as importantly, when. Most changes don’t start until April 2027 or later, so there’s nothing you need to rush into today.

The headlines

• No rise in the headline rates of Income Tax, National Insurance or VAT.
• Tax on savings and property income goes up again – a further 2 percentage points from 6 April 2027, taking the rates to 24%, 44% and 49%.
• National Living Wage rises 3.9% to £13.21 an hour from 1 April 2027.
• The 55p tax-free mileage rate is here to stay for the first 10,000 business miles, and the rate above that rises to 35p from 6 April 2027.
• Help with energy and fuel: a £100 Household Energy Payment from January 2027 (England, council tax bands A–D), the VAT cut on electricity extended to July 2027, and the 5p fuel duty cut extended to 1 July 2027.
• Making Tax Digital for Income Tax still starts in April 2027 for those due to join, with no penalty points for late submission of the first four quarterly updates.

Everyone: your pay, savings and pension

• Income Tax, National Insurance and VAT: no increase to the headline rates.
• Savings: the tax rates on savings income rise to 24% (basic), 44% (higher) and 49% (additional) from 6 April 2027, across the UK. The good news: the cash ISA limit stays at £20,000 – the planned cut has been reversed. The government says a basic rate taxpayer would need more than £25,000 in savings outside ISAs before paying any tax on the interest.
• Pensions: a new Pension Tax Allowance from April 2027 means pensioners whose income is no more than the full new State Pension won’t be pulled into paying small amounts of tax because of State Pension rises in this Parliament. The Triple Lock will be adjusted from the next Parliament.
• Energy and fuel: a £100 payment from January 2027 for households in England in council tax bands A–D, paid through the council tax system; the VAT cut on electricity extended to July 2027 (expected to take around £50 off the April 2027 price cap); the 5p fuel duty cut extended to 1 July 2027.
• First-time buyers: a new First Time Buyer ISA from April 2029 – up to £4,000 a year with a 25% government bonus, for homes up to £450,000.

Employers: payroll and people

• Minimum wage from 1 April 2027: National Living Wage £13.21 an hour; 18–20-year-olds £11.27; 16–17-year-olds and eligible apprentices £8.31; accommodation offset £11.53 a day. All up 3.9%.
• Mileage: staff using their own car or van can be paid 55p a mile tax-free for the first 10,000 business miles (now permanent), and 35p a mile above that from 6 April 2027.
• Employment expenses: from 6 April 2028 the £2,500 Self Assessment threshold for claiming work expenses goes, so more employees can claim through PAYE instead.

Business owners and company directors

• Corporation Tax: the headline rate stays capped at 25% and full expensing is kept.
• Capital allowances: the main-rate first-year allowance rises to 50% for spending from 1 January 2027, while the main writing down allowance drops to 12% from April 2027 (1 April for companies, 6 April for Income Tax).
• Selling your business: the lifetime limit for Business Asset Disposal Relief (the 18% Capital Gains Tax rate) halves from £1 million to £500,000 for disposals from 6 April 2027. A new Founders’ Relief – a 10% rate on up to £10 million of lifetime gains – arrives from 6 April 2027 for qualifying founders of high-growth, innovative companies.
• Taking money out of your company: no new dividend tax rates were announced, but the rules on how company distributions are taxed will be modernised from 6 April 2028. Draft legislation is still to come – we’ll keep you posted.
• High street businesses in England: from 1 April 2027, retail, hospitality and leisure properties get 100% Small Business Rate Relief up to £18,000 rateable value (was £12,000), with tapered relief up to £21,000 (was £15,000).

Sole traders and the self-employed

• Making Tax Digital: if you join MTD for Income Tax in April 2027, you won’t get penalty points for late submission of your first four quarterly updates in 2027-28. The government is also deferring the roll-out for “several taxpayer groups until further notice” – HMRC hasn’t yet said which, and we’ll update this post when it does.
• Mileage: the same 55p / 35p rates apply to you.
• Parental pay: from April 2029, eligible self-employed fathers, partners and adopters in Great Britain will be able to get parental pay for the first time.
• Payments on account: from April 2029, people who already make payments on account will pay smaller, more regular amounts through the year instead.

Landlords

• Property income tax rates rise by a further 2 percentage points from 6 April 2027 – to 24% (basic), 44% (higher) and 49% (additional) in England, Wales and Northern Ireland. That’s on top of the rise announced in last year’s Budget.
• Reporting: the government is consulting on getting more property income data from third parties to help HMRC check returns.

What hasn’t changed

• Headline rates of Income Tax, National Insurance and VAT.
• The 25% cap on the main rate of Corporation Tax, and full expensing.
• The £20,000 cash ISA limit.

Key dates at a glance

What to do now

Honestly? Not much today. Most of this doesn’t kick in until next April or later, and the detail is still being published. What’s worth doing:

• If you’re a landlord or have decent savings outside ISAs, have a think about how the higher rates from April 2027 affect you.
• If you employ people, pencil in the new wage rates for April 2027.
• If you’re thinking of selling your business, talk to us about the timing before 6 April 2027.
• If you’re due to join Making Tax Digital in April 2027, carry on getting ready – it’s still happening.

If you’d like to know what the Budget means for you or your business, book a free call with our team: www.kara-accountants.net/contact/

Source: HM Treasury – Budget 2026 document (28 October 2026). This is a summary of the announcements, not personal advice. Some measures still need to pass into law and HMRC will publish more detail over the coming weeks.