Autumn Budget 2026

Whilst there were no significant changes to the main rates of Income Tax, National Insurance, VAT or Corporation Tax in this budget, there were lots of small changes.

Below we summarise the key announcements that may affect you and your business. As always, please get in touch if you have any questions or would like tailored advice - we’re always happy to help.

National Minimum Wage

From April 2027, the National Minimum Wage will increase again as follows (per hour):

• £13.21 for those aged 21+ (up £0.50 / 3.9%)

• £11.27 for ages 18–20 (up £0.45 / 3.9%)

• £8.31 for ages 16–17 (up £0.31 / 3.9%)

• £8.31 for apprentices under 19 or in year one (up £0.31 / 3.9%)

Millward May: These increases, alongside the current Employer NIC rate of 15%, will continue to put pressure on small businesses and their margins. If you’d like support working through the impact on your business, please get in touch. We advise all employers to check they are paying the correct amounts. You can use the government calculator here: https://checkyourpay.campaign.gov.uk/. If you have any questions, feel free to email our payroll team at payroll@millwardmay.co.uk.

Capital Allowances

From April 2027, the main rate writing down allowance (WDA) will reduce again to 12%. In 2025/26 it was 18% and in 2026/27 it was 14%. No further extension of the 100% First Year Allowance (FYA) on electric cars was mentioned in the budget - this is due to expire in April 2027.

Millward May: The reduction in the WDA rate will only affect businesses who buy assets that do not qualify for the Annual Investment Allowance (AIA) i.e. second-hand assets or cars. These businesses will face a longer wait to get full tax relief on this expenditure. If you are considering purchasing an electric car or electric charge point through your company then it may be worth looking at options soon to lock in the FYA available until April 2027.

Business Rates

The government has increased the Small Business Rates Relief Thresholds for qualifying Retail, Hospitality and Leisure (RHL) properties to £18,000 (full relief) and £21,000 (tapered relief).

Millward May: 70,000 more businesses will be taken out of paying business rates altogether which should provide some respite for businesses in this sector who have been squeezed by employment tax/minimum wage increases.

Mileage Rates

Prior to the budget, the government increased the 45p per mile rate for the first 10,000 miles to 55p per mile - prior to this, the rate hadn’t been increased for 15 years! From 6 April 2027, the rate above 10,000 miles has also increased from 25p to 35p.

VAT

From 1 October 2027, online marketplaces (eBay etc) will be responsible for accounting for VAT on relevant sales made through their platforms by UK VAT-registered businesses. What this looks like for each platform is not yet clear so if you do sell through one of these platforms it is worth watching out for any announcements on these.

From April 2027, the VAT reverse charge for services supplied overseas will only be for UK VAT-registered businesses.

Millward May: If you are buying a service which is subject to the reverse charge mechanism (a lot of subscriptions are) and your business is not VAT registered, then these could become more expensive in future.

Going Digital

The government have stated a target date of April 2029 for e-invoicing to come in – this will mean all invoices will have to be sent in a specified digital format. Key decisions are still to be made on this with technical specifications expecting to drop by April 2028.

Millward May: If you are not currently using software for your invoicing/bookkeeping we highly recommend FreeAgent, which you can get free with a business bank account with either Mettle (also free!) or NatWest. Further details can be found here: www.freeagent.com/pricing/free-accounting-software

Payments

From April 2029, the government will require businesses to set up a direct debit instruction for HMRC for VAT and PAYE payments. HMRC will also be given further powers to recover outstanding debts from bank accounts without needing a court order.

Millward May: We always recommend setting up a direct debit for PAYE and VAT as it means you avoid any late payment penalties and it is one less thing to worry about doing! HMRC will collect the tax on or usually a few days after the due date (not before).

Business Asset Disposal Relief

From April 2027, BADR lifetime limit of £1m will be halved to £500k. These gains will be subject to the current 18% BADR rate (an advantage over the normal capital gains rate for higher rate taxpayers of 24%).

Millward May: If you are considering closing/selling your company with significant reserves left in the business over the next year then it may be worth discussing this sooner rather than later if you will be impacted by the above change.

Founders Relief

This was one of the headline measures - a new capital gains tax relief for founders, giving a 10% tax rate on up to £10m of lifetime gains for disposals from 6 April 2027.

Unfortunately, the criteria is very narrow and so will apply to only a handful of businesses:

• the individual must have held at least 25% of the ordinary shares when the trade began, and held shares for five years

• the company must have turnover of at least £10m and 15 qualifying full-time employees in the period before disposal

• it must also pass two of three tests:

  • 25% compound annual growth in turnover over three consecutive periods (from at least £10m)

  • 25% growth in headcount (from at least 15)

  • or £1.5m of R&D spend claimed in the three years before sale.

Property and Savings Income

One of the most significant announcements in this budget was that from April 2027, property and savings income tax rates will be increased by 4 percentage points:

• 24% basic

• 44% higher

• 49% additional

 However, the government did scrap plans to reduce the cash ISA allowance for those under 65 to £12,000 from £20,000. All savers over the age of 18 can continue to invest £20,000 in cash ISAs each year.

Millward May: This continues to add pressure on buy-to-let landlords, many of whom are now making minimal profits or even a loss after tax/mortgage interest payments. If planning to sell, please speak with us first and remember the 60-day CGT reporting requirement. If considering a purchase, it may be more tax-efficient to do so through a Limited company.

Trading Allowance

From 6th April 2027, the trading allowance will increase from £1,000 to £3,000. This means that those who only earn a small amount of trading income do not need to report or pay tax on it if the total sales are less than £3,000 in the tax year. The tax-free property allowance however remains at £1,000.

Making Tax Digital (MTD)

Those joining MTD from April 2027 will benefit from reduced penalties as the government announced a soft landing. This will include those with qualifying income (sole trade/rental property income) over £30,000. These individuals will not receive penalty points for late submission of their first four quarterly updates for the 27/28 tax year.

This only applies to those joining the scheme from April 2027. For those who joined in April 2026, they will be expected to pay penalties on late submission from April 2027.

Tax Payments

From April 2029, taxpayers will be required to make regular tax payments throughout the year rather than the lump sum payments in January and July. What this looks like in practice has not yet been established.

The budget also confirmed that HMRC will be given powers to recover debt through deductions from bank accounts where taxpayers fail to engage with HMRC (from 29/30 tax year).