Autumn Budget 2026: key tax changes for individuals and businesses

The Autumn Budget announced on 28 October 2026 includes measures affecting personal finances, business investment and the way tax is administered. This summary brings together selected announcements for individuals, companies, trusts, partnerships and sole traders, alongside PAYE and VAT changes.

Some measures are planned for future years and require legislation or further guidance. The effect on you or your business will depend on your circumstances.

Individuals

• The main rates of Income Tax and National Insurance have not been increased. The standard Personal Allowance remains £12,570, and the basic rate band remains £37,700. These thresholds differ for Scottish taxpayers.
• From 6 April 2027, the Income Tax rates on savings income will be 24% for basic rate taxpayers, 44% for higher rate taxpayers and 49% for additional rate taxpayers. The same rates will apply to property income in England, Wales and Northern Ireland. The Scottish Government has its own powers over property income rates.
• Dividend tax rates are unchanged. The dividend allowance remains £500.
• The annual cash ISA limit will remain £20,000.
• From 6 April 2027, a new Pension Tax Allowance is intended to ensure that pensioners whose total income is no more than the full new State Pension do not pay Income Tax on that income.
• The lifetime limit for gains qualifying for Business Asset Disposal Relief will reduce from £1 million to £500,000 for disposals made from 6 April 2027. The relief rate is 18%.

Companies

• The Corporation Tax rates and thresholds remain unchanged: the main rate is 25%, the small profits rate is 19%, and marginal relief applies to profits between £50,000 and £250,000.
• Full expensing is being retained. For qualifying expenditure, the main rate First Year Allowance will increase from 40% to 50% for expenditure incurred from 1 January 2027. The main writing down allowance will reduce from 14% to 12% from 1 April 2027 for Corporation Tax and 6 April 2027 for Income Tax.
• The Government plans to modernise the tax treatment of company distributions from April 2028. The reforms are intended to apply the rules more consistently while protecting genuine commercial transactions, including family business successions. Draft legislation is expected to be consulted on in 2027.
• For R&D claims, the Claim Notification Form is due to be removed from 1 April 2027, with the Additional Information Form to be simplified from autumn 2027.

Trusts

• From 6 April 2027, the higher Income Tax rates on savings income will also affect trust savings income. The new property income rates will also be relevant to trusts with property income.
• The Government will amend the Inheritance Tax rules on liabilities relating to trust property. The changes will clarify when such liabilities can reduce the taxable value of trust assets and strengthen anti-avoidance provisions. They apply to deaths and other chargeable events on or after 28 October 2026.
• The previously announced change bringing most unused pension funds and pension death benefits into the scope of Inheritance Tax remains due to take effect from 6 April 2027.

Partnerships

• The new savings and property income tax rates may affect partners with those types of income. The main rates of Income Tax on trading income have not been increased.
• From April 2029, taxpayers who already make payments on account for Income Tax are expected to make more regular payments during the year.

Sole Traders

• The trading allowance will increase from £1,000 to £3,000 from 6 April 2027. This may exempt up to £3,000 of trading and miscellaneous income each year, subject to the detailed rules.
• The Government has deferred the Making Tax Digital for Income Tax rollout for several taxpayer groups until further notice. Those joining from April 2027 will also receive a 12-month easement from penalty points for late quarterly updates.
• The increased rates on savings and property income from April 2027 may affect sole traders who also receive those types of income.

PAYE and VAT

• The headline rates of VAT and National Insurance have not been increased.
• From April 2029, businesses will need to set up a direct debit instruction for VAT and PAYE return liabilities. Other payment methods will remain available before a specified cut-off date; the direct debit will be used to collect any unpaid balance.
• From October 2027, online marketplaces will be responsible for collecting VAT on qualifying sales by UK businesses using their platforms. The measure is expected to apply where the business meets a £90,000 annual sales threshold per platform, with exclusions including personal sales, second-hand goods and business-to-business transactions.
• VAT invoices will need to be issued and received in a prescribed electronic format from April 2029. Businesses should follow the Government’s further guidance as the implementation details are developed.
• From 2 January 2028, larger private hire operators with annual fare turnover above £50 million will be required to account for VAT on the full passenger fare.

Discuss what the Budget means for you

This is a brief summary of selected Budget measures and is for general guidance only. Some changes require legislation, and further details may be published. Please contact us if you would like us to consider how any of these measures may affect your circumstances or business.

Speak to McKenzies for advice tailored to your circumstances.

Summary prepared on 29 October 2026. Further reading: HM Treasury’s Budget 2026 document.