The Chancellor delivered the Autumn Budget on 28th October 2026. It was described as a steady budget with few surprises, but there are a number of changes that will directly affect small business owners, sole traders, landlords and employees. Some take effect immediately, others from April 2027. This blog runs through the key announcements and what they mean for you.
What Did the Autumn Budget 2026 Mean for Sole Traders?
There is some good news here. The trading allowance, which is the amount of self-employment income you can earn tax-free before you need to report anything to HMRC, is rising from £1,000 to £3,000 from April 2027. The Self Assessment reporting threshold rises to match. This means if your trading income is £3,000 or less in a tax year, you will no longer need to file a Self Assessment return for it.
This is a significant change for people who earn a small amount from a side business, freelance work, or selling online. It takes a lot of low earners out of Self Assessment entirely.
On National Insurance, Class 4 rates for the self-employed stay at 6% and 2%. From April 2027, self-employed people with profits of £7,355 or more will automatically receive access to contributory benefits through a National Insurance Credit without paying Class 2. Voluntary Class 2 contributions remain available below that threshold at £3.80 per week if you want to protect your State Pension entitlement.
The business mileage rate for miles above 10,000 in a tax year rises from 25p to 35p per mile from April 2027. If you drive a lot for work, this is worth noting when you do your accounts.
What Did the Autumn Budget 2026 Mean for Landlords?
This is the biggest change for landlords in this Budget. From the 2027/28 tax year, the rates of income tax on property income are rising. The new rates will be:
| Tax Band | Current Rate (2026/27) | New Rate (from 2027/28) |
|---|---|---|
| Basic rate | 20% | 24% |
| Higher rate | 40% | 44% |
| Additional rate | 45% | 49% |
The property allowance of £1,000 is unchanged. CGT rates on residential property are also unchanged for 2027/28, and the £3,000 annual CGT exemption remains in place. There was also a minor helpful change: late filing penalties for UK property disposal returns will stop accruing if the gain is reported on your Self Assessment return, which gives a little more flexibility where the 60-day deadline has been missed.
One important point for landlords who have pension funds: from April 2027, unused pension funds and certain death benefits will fall into the estate for Inheritance Tax purposes. This changes estate planning significantly for property investors who were relying on pensions to pass wealth free of IHT.
What Did the Autumn Budget 2026 Mean for Small Business Owners?
Corporation Tax rates are unchanged. The 25% main rate and 19% small profits rate remain in place, and the Chancellor confirmed the cap will stay for this parliament. There are some changes to capital allowances worth knowing about.
From April 2027, the main rate Writing Down Allowance on plant and machinery falls from 14% to 12%. This means you will write off the cost of equipment a little more slowly over time. However, the First Year Allowance on main rate assets rises from 40% to 50% for expenditure from 1st January 2027, so for new purchases there is upfront relief available. The Annual Investment Allowance stays at £1 million, so for most small businesses the practical impact of the WDA change is limited.
Business rates relief is improving for retail, hospitality and leisure businesses. The Small Business Rate Relief threshold is rising, meaning around 70,000 more businesses will pay no business rates at all. Pubs and live music venues will also see their relief increase to 35% from April 2027.
What Happened to Business Asset Disposal Relief?
This is a significant change for anyone planning to sell a business. The lifetime limit for Business Asset Disposal Relief has been cut from £1 million to £500,000. The 18% rate itself is unchanged, but the amount of gains you can shelter at that rate over your lifetime has been halved.
To partly compensate, a new relief called Founders Relief is being introduced from 6th April 2027. This offers a 10% CGT rate on a lifetime allowance of £10 million, but with stricter conditions attached. The details are still being confirmed, but it appears to be aimed at genuine founders of growth businesses rather than all business sellers.
What Are the New Minimum Wage Rates From April 2027?
If you employ staff, you need to update your payroll from 1st April 2027. The new rates are:
| Category | Current Rate | New Rate from 1st April 2027 |
|---|---|---|
| National Living Wage (age 21 and over) | £12.71 | £13.21 |
| National Minimum Wage (age 18 to 20) | £10.85 | £11.27 |
| National Minimum Wage (age 16 to 17 and apprentices) | £7.55 | £8.31 |
What Other Changes Are Worth Knowing About?
VAT on domestic electricity: VAT is being temporarily removed on domestic electricity bills from 1st November 2026 to 1st July 2027. This will reduce household energy bills slightly over winter. It does not affect VAT rules for businesses.
ISA rules: The restriction that was being discussed, which would have limited flexible ISA use to £8,000 of the annual £20,000 allowance, has been scrapped. The full £20,000 ISA allowance remains flexible and usable as before. A new Starter ISA for first-time buyers is also being introduced to replace the Lifetime ISA.
Income tax thresholds: The Personal Allowance, basic rate band, higher rate threshold and additional rate threshold are all frozen until April 2031. With inflation pushing wages up, more people are being pulled into higher tax bands each year without any rate change.
Making Tax Digital: There will be no late submission penalty points for quarterly updates in the 2027/28 tax year for those joining MTD from April 2027. Some new exemptions were also announced. This eases the transition for the next wave of businesses entering MTD.
Savings income: From 2027/28, the rates on savings income also rise in line with property income, to 24%, 44% and 49%. The Savings Allowance of £1,000 for basic rate taxpayers and £500 for higher rate taxpayers is unchanged.
What Should I Do Next After the Autumn Budget 2026?
The changes that matter most to you will depend on your situation. If you are a landlord, the April 2027 property income tax rate increases deserve serious attention now, while there is still time to review your structure. If you are planning to sell a business, the BADR lifetime limit cut to £500,000 changes the numbers and needs to be factored into any exit plan. If you employ people, update your payroll budget to reflect the new minimum wage rates from April 2027.
A Budget is a good moment to sit down with your accountant and go through the numbers. The changes that look minor on paper can have a real impact once they are applied to your actual income, expenses and plans.
