Autumn Budget 2026 Report
We examine Chancellor Healey’s first budget, generally considered to be low on significant changes there are nevertheless details worth noting.
PERSONAL TAX
There are two tax rises to report in Personal Tax:
Savings Tax Rates - these will rise from April 2027 by 4%
Basic Rate goes from 20% to 24%
Higher Rate goes from 40% to 44%
Additional Rate goes from 45% to 49%
Property Tax - from Apr 2027 the chancellor has introduced a tax rate on property income that is higher than income tax:
Basic Rate 24%
Higher Rate 44%
Additional Rate 49%
Whilst most of our clients do not have savings income above the threshold of £1,000 the new Property Tax will have quite widespread impact. We advise anyone with property income to review their position.
All other personal tax rates remain unchanged and thresholds have been frozen. Given inflation this does also represent an effective tax increase through what has been termed ‘fiscal drag’.
The budget also announced increases in tax on both Savings and Property Income from April 2027 with current tax rates (Basic 20%; Higher Rate 40% and Additional Rate 45% ) all increasing by 2%.
Capital Gains Tax - The Chancellor did also announce a tax new lower 10% rate of Capital Gains Tax for Founders. The eligibility criteria are unclear at time of writing but indications are that it will be tightly focused on people who start businesses and potentially only business which achieve significant scale.
There was speculation before the budget that the current tax break business owners who exit their business called Business Asset Disposal Relief would be curtailed. In the event the rate remained the same at 18% but the lifetime limit was reduced to £500k from £1million.
BUSINESS TAX & vat
Corporation Tax and VAT - There were few changes to Business Tax that will affect our clients. Corporation Tax rates and thresholds remain unchanged, as they are for VAT.
Business Rates - There was continued help for small business with Business Rates. An extra 20% reduction was announced for pubs, music venues and social clubs. The rates for retail, hopsitality and leisure will be frozen. Small Business Rates Relief threshold was also increased from £12,000 to £18,000.
Trading Allowance - the trading allowance of £1,000 will be increased to £3,000 allowing £3,000 of income from a side hustle before tax is due.
Employers
There were minimal changes to Employers NI but from April 2027 the National Minimum Wage increases by 3.9% form £12.71 to £13.21/hr (from £10.85 to £11.27/hr for 18 to 20 yr olds and from £8 to £8.31 for 16 & 17 yr olds).
The Employee Share scheme CSOP (Company Share Option Plan) is being reformed.
ECONOMIC OUTLOOK
The Office of Budget Responsibility believes that the economy will grow by 1.3% but fall to 1% in 2027.
