Autumn Budget 2026: The Key Changes for Small Businesses and Individuals
The Chancellor delivered the Autumn Budget on 28 October 2026, announcing several tax changes affecting small businesses, limited company directors, contractors, freelancers and individuals.
We’ve rounded up the main announcements and what they could mean for you.
Corporation Tax
Corporation Tax rates remain unchanged, with companies continuing to pay between 19% and 25%, depending on their profits. The main rates have been confirmed for the financial year beginning April 2028.
Business Asset Disposal Relief
From 6 April 2027, the lifetime limit for Business Asset Disposal Relief (BADR) will reduce from £1 million to £500,000.
This could significantly affect limited company directors planning to sell or close their businesses. The BADR tax rate remains at 18%.
Business Mileage Allowances
The approved mileage allowance of 55p per mile for the first 10,000 business miles will become permanent.
From 6 April 2027, the allowance for business mileage above 10,000 miles will increase from 25p to 35p per mile.
This benefits directors, employees and eligible self-employed individuals using their own vehicles for business journeys.
Personal Tax and Dividends
The Personal Allowance remains frozen at £12,570, with the basic rate Income Tax threshold remaining at £50,270 in England, Wales and Northern Ireland.
Dividend tax rates, which increased in April 2026, remain at 10.75%, 35.75% and 39.35%. The tax-free dividend allowance stays at £500.
Trading Allowance
From 6 April 2027, the Trading Allowance will increase from £1,000 to £3,000.
This will benefit individuals earning smaller amounts from self-employment or side businesses, potentially reducing their tax and reporting obligations.
Savings and Property Income
From 6 April 2027, Income Tax rates on savings and property income will increase by two percentage points to 24%, 44% and 49%.
This will affect individuals with taxable savings interest and landlords receiving rental income.
Minimum Wage
From 1 April 2027, the National Living Wage will increase to £13.21 per hour for workers aged 21 and over.
Employers should factor this increase into their staffing costs.
Making Tax Digital
Making Tax Digital for Income Tax continues its phased introduction, with individuals earning qualifying income above £30,000 joining from April 2027.
The government has confirmed that late submission penalty points will not apply to quarterly updates during the first year for those joining in April 2027.
Electric Vehicles
From April 2028, a new mileage-based charge will apply to electric vehicles, at 3p per mile for fully electric cars and 1.5p per mile for plug-in hybrids.
This will introduce an additional cost for electric vehicle owners, including those using electric company cars.
Household Finances
The Budget also included several measures to help with living costs:
- The temporary 0% VAT rate on domestic electricity has been extended until July 2027.
- Eligible households in England will receive a £100 energy payment from January 2027.
- The temporary 5p fuel duty reduction has been extended until July 2027.
What Does This Mean for You?
While there are no major changes to Corporation Tax or VAT rates, the Budget introduces several measures that could affect how small business owners manage their finances.
For limited company directors, the reduction in Business Asset Disposal Relief is particularly important, while changes to mileage allowances, personal tax and dividend rates should also be considered when planning ahead.
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