Rt Hon John Healey MP, announced the details of his first Budget as chancellor on 28th October 2026, highlighting key measures announced that may have an impact on your business and as individuals.
- Approved Mileage Allowance Payments (AMAPs) and Simplified Mileage Rates From 6 April 2027, the mileage rate above 10,000 business miles will rise from 25 pence to 35 pence per mile for cars and vans. The 55 pence rate for the first 10,000 miles remains, applying retrospectively from 6 April 2026.
- Small Business Rate Relief The valuation threshold for small business rate relief for retail, hospitality and leisure (RHL) properties is being increased from £12,000 to £18,000 for 100% relief, and from £15,000 to £21,000 for tapered relief from 1 April 2027.
- New property Income Tax Rates and Savings Income It was confirmed in this Budget that rates would increase by 4% instead of 2% from 6th April 2027 for property income and savings and will be:
- 24% for basic rate taxpayers
- 44% for higher rate taxpayers, and
- 49% for additional rate taxpayers
- New Dividend Tax Rates It was previously announced that a 2% increase will apply to dividends in the basic and higher rate tax bands from April 2026 for all UK taxpayers with no increase in the rate for additional rate taxpayers. The rates of tax on dividends are:
- 10.75% for basic rate taxpayers
- 35.75% for higher rate taxpayers, and
- 39.35% additional rate taxpayers
- Individual Savings Accounts (ISAs) The Government is reversing the previous policy to reduce the cash ISA limit to £12,000 to all under-65s and instead it will remain at £20,000.
- Trading Allowance The trading allowance will increase to £3,000 from 6th April 2027, providing greater tax relief for individuals with smaller amounts of trading income.
- Capital Allowances The main rate of writing-down allowances will reduce from 14% to 12% from April 2027, meaning tax relief will be obtained more slowly for the main capital allowances expenditure pool. First-year allowance will increase from 40% to 50% for qualifying expenditure incurred on or after 1st January 2027. This allows businesses to deduct half of qualifying expenditure on new and unused main-rate plant and machinery in the first year.
- National Living Wage (NLW) and National Minimum Wage (NMW) From 1st April 2027, minimum wage rates will rise to
- Above 25 year olds £13.21 an hour
- 18 to 20-year-olds £11.27 an hour
- New Pension Tax Allowance From April 2027, the full new State Pension will rise to £13,036.40, while the Personal Allowance remains at £12,570. The new Pension Tax Allowance will be worth up to £94 and is expected to be applied automatically by HMRC.
- Research and Development (R&D) Tax Reliefs
From 1 April 2027, companies will no longer need to submit a claim notification form for R&D reliefs. HMRC will introduce a simplified and rationalised Additional Information Form for companies making claims in autumn 2027. Further details will be published before its introduction to give stakeholders time to prepare. - Business Asset Disposal Relief (BADR) From 6th April 2027, the BADR lifetime limit will reduce from £1 million to £500,000.
- Founders’ Relief A new Founders’ Relief is proposed from 6th April 2027, offering a 10% Capital Gains Tax (CGT) rate on up to £10 million of lifetime qualifying gains for founders and significant early investors in high-growth, innovative UK companies. Further information will be announced.
- Funding Expanded for Female-led Businesses The Government has announced increased support for female entrepreneurs through the British Business Bank, with a further £100 million committed for the next financial year. The funding is intended to improve access to investment for women-led businesses and help more female entrepreneurs start and grow their businesses. Further details of the funding routes and eligibility are expected to be announced.
- Support for Young Entrepreneurs The Government has announced a new Young Entrepreneurs Allowance, which will be piloted to help young people overcome the financial barriers to starting their own business.
- Parental Allowance for the Self-Employed New Parental Allowance from April 2029, extending financial support to eligible self-employed fathers, partners and adopters in Great Britain. This allowance will also be available to some people who are recently employed or unemployed, or who have a broken or irregular employment history and therefore do not qualify for statutory paternity or adoption pay, provided they have a sufficient work and earnings history. Further details on eligibility and how the new allowance will operate are expected in due course.
- Reverse Charge for B2B supply of services From Overseas The government has announced a change in VAT law to restrict the VAT reverse charge for supplies of services from overseas, so that it only applies if the receiving UK business is VAT-registered. This change will take effect from April 2027.
- VAT Online Marketplace Liability (OMPL) From October 2027, VAT OMPL rules will be extended to UK businesses. Online marketplaces will be responsible for collecting VAT on sales by UK VAT-registered businesses and any other UK business with a minimum annual sales threshold per platform of £90,000.
- Requiring Payment for PAYE and VAT by Direct Debit From April 2029, the government will require employers to have a Direct Debit instruction in place with HMRC for their PAYE and VAT return liabilities, while retaining flexibility to pay by other methods. Direct Debit will make it easier for customers to pay what they owe on time, and help reduce debt caused by late payments and errors.
Detailed Information on the Budget announced can be found in the Economic and fiscal outlook – October 2026 page on GOV.UK
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