Written by Mark Munnelly ACA, Director, Cubed Consultancy · Updated 28 October 2026
The Autumn Budget 2026 leaves the headline taxes for small businesses where they were, with corporation tax, the VAT threshold and the main income tax bands all unchanged. The changes that matter sit around the edges. They cover selling a business, relief on equipment, business rates for shops, pubs and cafés, and the tax on rental and savings income. Most of them start in April 2027, so business owners in Harpenden, St Albans and across Hertfordshire have a few months to plan.
Key facts for business owners (28 October 2026)
- The Business Asset Disposal Relief lifetime limit falls from £1 million to £500,000 for disposals on or after 6 April 2027 (GOV.UK).
- The main rate first-year allowance rises from 40% to 50% for spending on or after 1 January 2027, and the main writing-down allowance falls to 12% from April 2027 (GOV.UK).
- In England, small retail, hospitality and leisure properties with a rateable value up to £18,000 pay no business rates from 1 April 2027, up from £12,000 (GOV.UK).
- The trading allowance rises from £1,000 to £3,000 from 6 April 2027 (GOV.UK).
- Corporation tax stays at 25% main rate and 19% small profits rate, and the VAT registration threshold stays at £90,000 (GOV.UK).
What are the Autumn Budget 2026 business tax changes?
The Autumn Budget 2026 business tax changes are mostly to reliefs and allowances, such as Business Asset Disposal Relief, capital allowances and business rates relief, rather than to headline tax rates. Chancellor John Healey delivered it on 28 October 2026, and the main changes for business owners are:
- a lower lifetime limit for Business Asset Disposal Relief when you sell a business, and a new Founders’ Relief;
- a bigger first-year allowance on equipment, with a smaller writing-down allowance on what is left;
- wider business rates relief for small shops, pubs, restaurants and cafés in England;
- a 3.9% rise in the National Living Wage from April 2027;
- a larger trading allowance and a higher mileage rate above 10,000 business miles;
- higher income tax rates on property and savings income from April 2027.
Each of these is covered below, with the date it starts and who it applies to.
What are the capital gains tax changes in the Autumn Budget 2026?
The main capital gains tax change in the Autumn Budget 2026 is a cut to the Business Asset Disposal Relief lifetime limit, from £1 million to £500,000 for disposals on or after 6 April 2027. The main rates stay at 18% and 24%, and a new Founders’ Relief is covered in the next section. The relief lowers the Capital Gains Tax rate when you sell all or part of a qualifying business. The limit is the total gain you can claim it on across your lifetime.
The Chancellor said the change leaves three in four claimants unaffected, because most people who claim the relief make gains below £500,000. The owners it does affect are those selling a business, or shares in one, with a gain above that figure. There are special rules for contracts signed before 6 April 2027 that complete later, and for some share reorganisations.
An invented example shows the cost. A director sells her shares after 6 April 2027 and makes a gain of £800,000. The first £500,000 still gets the relief rate of 18%. The remaining £300,000 is taxed at the 24% higher rate, so the cut adds about £18,000 to her bill. The most the change can cost anyone is about £30,000, which is 6% of the £500,000 that no longer qualifies.
What is Founders’ Relief?
Founders’ Relief is a new Capital Gains Tax relief that gives a lower rate on qualifying share sales from 6 April 2027. The Chancellor described it as a 10% rate on lifetime gains of up to £10 million, aimed at founders of the UK’s most successful firms.
The Budget documents confirm the lower rate and the start date. The rules on who qualifies are still being written, and the government is consulting on them until 30 November 2026. Commentators expect the conditions to be narrow, so most owners of small and medium-sized companies should not assume it will apply to them.
Has corporation tax changed in the Budget?
No, the Autumn Budget 2026 did not change corporation tax rates. The main rate stays at 25% and the small profits rate at 19%, with the same £50,000 and £250,000 thresholds. The government has also confirmed both rates for the financial year starting 1 April 2028.
What has changed is the relief for buying equipment. The main rate first-year allowance rises from 40% to 50% for spending on or after 1 January 2027. The main rate writing-down allowance, which spreads relief on the rest of the cost over later years, falls from 14% to 12%. The new rate starts on 1 April 2027 for companies and on 6 April 2027 for sole traders and partnerships.
In an invented example, a company spends £40,000 on qualifying equipment in February 2027. At 50%, it deducts £20,000 in the first year, compared with £16,000 at the old 40%. The other £20,000 goes into the main pool and gets the lower 12% rate in later years. Companies buying new equipment that qualifies for full expensing can still deduct the full cost in the year they buy it.
Will small shops, pubs and cafés pay less business rates?
Yes, many small shops, pubs, restaurants and cafés in England will pay less in business rates from 1 April 2027. Small Business Rate Relief for retail, hospitality and leisure properties now gives 100% relief up to a rateable value of £18,000, up from £12,000. The relief then tapers away evenly until it reaches zero at £21,000, rather than at £15,000.
Take an invented café with a rateable value of £19,500. That sits halfway between £18,000 and £21,000, so it gets 50% relief, where under the old thresholds it got none. The Chancellor said the change takes around 70,000 more businesses out of business rates altogether.
The higher thresholds apply until 31 March 2029 and only to qualifying retail, hospitality and leisure properties. Offices, workshops and other properties keep the old £12,000 and £15,000 thresholds. Pubs, social clubs and most live music venues also get extra relief, taking their total to 35% for 2027/28 and 2028/29. Our guide to business rates and the Budget covers the multipliers and the bill freeze in more detail.
What does the Budget mean for employers?
The Autumn Budget 2026 means employers will pay a higher minimum wage from April 2027 and must payroll more benefits in kind. The National Living Wage and the rate for 18 to 20-year-olds both rise by 3.9% from April 2027. The Chancellor said around 2.3 million workers will benefit.
From 6 April 2027, payrolling benefits in kind becomes compulsory for company cars, vans, car and van fuel, and employer-provided medical cover. That means the taxable value goes through payroll each month, instead of being reported after the tax year ends. If you have never payrolled benefits before, it is worth setting it up in your payroll software well before April.
The Budget documents do not mention any change to the employer National Insurance rate or the Employment Allowance.
What changes for sole traders and the self-employed?
Sole traders and the self-employed gain a larger trading allowance and a higher mileage rate from 6 April 2027. The trading allowance rises from £1,000 to £3,000, and the Self Assessment reporting threshold for trading income rises with it. Someone earning £2,500 a year from a side business would no longer pay tax on it or need to report it. That holds as long as they claim the allowance instead of their actual costs.
The mileage rate for business miles above 10,000 a year rises from 25p to 35p from the same date. This applies to employees’ mileage allowance payments and to the simplified mileage rate the self-employed can use. A self-employed builder who drives 14,000 business miles a year would claim an extra £400, because 4,000 miles now get 10p more each.
Two further changes come later. From April 2029, people who make payments on account will move to smaller, more regular payments during the year, which can be collected automatically or through PAYE. Anyone who has to join Making Tax Digital for Income Tax in April 2027 also gets a year’s grace. They will not get late submission penalty points for quarterly updates in 2027-28.
Are landlords paying more tax after the Budget?
Yes, landlords will pay more income tax on rental profits from 6 April 2027 after the Autumn Budget 2026. The rates on property income rise to 24% for basic rate taxpayers, 44% for higher rate taxpayers and 49% for additional rate taxpayers. The same rates apply to savings income. In an invented example, a basic rate landlord with £10,000 of taxable rental profit in 2027-28 would pay £2,400 in income tax on it.
Scotland and Wales can set their own rates for property income under their income tax powers. Dividend tax rates are not part of this change and stay at 10.75%, 35.75% and 39.35%.
What did the Budget leave unchanged?
The Autumn Budget 2026 left most of the taxes a small business pays day to day unchanged. For 2027-28:
- the personal allowance stays at £12,570 and the higher rate threshold at £50,270;
- the VAT registration threshold stays at £90,000 and the deregistration threshold at £88,000;
- Capital Gains Tax stays at 18% and 24%, with a £3,000 annual exempt amount;
- the dividend allowance stays at £500.
One VAT change is coming for online sellers. From October 2027, online marketplaces will collect and pay VAT on sales by VAT-registered UK businesses. They will do the same for other UK sellers with sales above £90,000 a year on that platform. The threshold and start date will be confirmed in secondary legislation.
Frequently asked questions
When do most of the Budget changes start?
Most Autumn Budget 2026 changes for business owners start in April 2027. The business rates changes start on 1 April 2027. The trading allowance, mileage, Business Asset Disposal Relief and property income changes follow on 6 April 2027. The higher first-year allowance starts earlier, on 1 January 2027, and the change to payments on account waits until April 2029.
Does the gas standing charge change affect business energy bills?
No, the Autumn Budget 2026 has not announced any change to business gas standing charges. The plan to scrap gas standing charges in 2027 or soon after is aimed at household bills under the energy price cap. We explain the detail in our post on gas standing charges being scrapped.
Should I sell my business before 6 April 2027?
No, selling a business before 6 April 2027 only to beat the Business Asset Disposal Relief cut rarely makes sense on its own. The most it can cost is about £30,000, and only on a gain above £500,000. The timing of a sale depends on the buyer, the price and the business itself. If you were already planning a sale with a large gain, it is worth working out both dates before you agree terms.
