Insights

On 28 October 2026, the UK Government delivered its Autumn Budget, which, in our view, was relatively uneventful from a tax perspective, with fewer significant changes than had been rumoured or might have been anticipated.

While the headline rates of Income Tax, Corporation Tax, National Insurance and VAT remain unchanged, the Budget introduces a limited number of targeted measures affecting individuals, property investors, entrepreneurs and businesses.

The principal tax announcements include a further increase in the taxation of savings and property income for individuals (which some commentators have seen as a breach of the promises made in the Labour Manifesto), changes to Capital Gains Tax reliefs and Capital Allowances, additional business rates support, and reforms to VAT compliance and tax administration.

Notably, despite speculation ahead of the announcement, the Government did not introduce a new general exit tax on individuals leaving the UK or indeed wealth tax.

Below, we summarise the key measures and their implications for taxpayers.

Personal Taxation

Income Tax and Dividend Tax

The Government has confirmed that the main rates of Income Tax and the Personal Allowance will remain unchanged for the 2027/28 tax year.

Dividend tax rates and the Dividend Allowance will also remain unchanged.

Increased Taxation of Savings and Property Income

From 6 April 2027, the rates applicable to savings and property income will increase by a further 2% to 24% for basic-rate taxpayers, 44% for higher-rate taxpayers and 49% for additional-rate taxpayers.

MTD Penalty Easements

The government will not apply late submission penalty points to quarterly updates for the 2027-28 tax year for Income Tax Self-Assessment taxpayers required to join MTD in April 2027.

Self-Assessment Payments on Account

From April 2029, the Government intends to introduce more regular in-year Income Tax payments for taxpayers currently required to make Payments on Account.

Payments will be automated, with eligible taxpayers able to choose to pay through PAYE.

Further details on the operation of the new system are expected in the near future.

Business Taxes and Rates

Corporation Tax

The Government has confirmed that Corporation Tax rates and thresholds will remain unchanged, with the main rate continuing at 25% and the small profits rate at 19%.

Annual Tax on Enveloped Dwellings (ATED)

The ATED annual charges will rise by 3.5% from 1 April 2027 in line with the September 2026 Consumer Prices Index.

Capital Allowances

From 1 January 2027, the main-rate first-year allowance will increase from 40% to 50% for qualifying expenditure.

However, the main-rate writing-down allowance will be reduced from 14% to 12%, effective from 1 April 2027 for Corporation Tax purposes and 6 April 2027 for Income Tax purposes.

Businesses planning significant capital expenditure should consider the timing of their investments and the availability of other reliefs, including the Annual Investment Allowance and full expensing, where applicable.

Business Rates

From 1 April 2027 the rateable value threshold for 100% Small Business Rate Relief for qualifying retail, hospitality and leisure properties will increase from £12,000 to £18,000, while the upper threshold for tapered relief will increase from £15,000 to £21,000 for qualifying properties.

In addition, business rates increases for qualifying retail, hospitality and leisure properties will generally be capped at inflation for the 2027/28 and 2028/29 financial years.

These measures are intended to reduce operating costs and provide greater financial stability for businesses in the affected sectors.

Capital Gains Tax and Business Disposals

Business Asset Disposal Relief

From 6 April 2027, the lifetime limit for Business Asset Disposal Relief (BADR) will be reduced from £1 million to £500,000, limiting the amount of qualifying gains eligible for the preferential Capital Gains Tax rate of 18%.

This change is particularly relevant to business owners and shareholders considering a business sale or restructuring.

Founders' Relief

The Government has announced a new Founders' Relief designed to support entrepreneurs and early investors in qualifying high-growth and innovative UK companies.

From 6 April 2027, the relief is intended to provide a preferential 10% Capital Gains Tax rate on qualifying gains of up to £10 million per individual over their lifetime.

The relief will be subject to specific eligibility requirements, with further details expected following the Government's technical consultation.

VAT and Tax Administration

VAT

The Government has confirmed that the standard and reduced rates of VAT will remain unchanged.

Online Marketplaces

From October 2027, online marketplaces will also become responsible for collecting VAT on qualifying sales made by applicable UK businesses through their platforms.

This measure is intended to strengthen VAT compliance and simplify the collection of VAT on marketplace transactions.

Mandatory Electronic Invoicing

The Government is progressing with plans to introduce mandatory VAT electronic invoicing from April 2029, as part of its wider programme to modernise the UK tax system.

The measure is expected to improve the accuracy of VAT reporting and streamline invoicing processes.

Inheritance Tax

The government will introduce legislation in Finance Bill 2026-27 to amend the inheritance tax rules on liabilities and trust property.

Conclusion

Although the Budget introduced relatively few major tax changes, some of the announced measures could still have important implications for individuals and businesses.

To discuss how these changes may affect you or your business, please contact your usual Statura contact