Autumn Budget 2026: Key tax changes & what they mean for your business
The Chancellor has delivered the Autumn Budget 2026, setting out the government’s latest fiscal plans. While major headline rates for Corporation Tax, Dividend Tax, and Employment Income Tax remain unchanged, several critical shifts in capital reliefs, local rates, employment costs and compliance will directly impact UK business owners.
Below, we break down the key announcements businesses need to know and the strategic steps you should consider next.
Business rates & high street support
For physical businesses, particularly in retail, hospitality and leisure, the Budget delivers notable relief:
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Small Business Rates Relief (SBRR): The eligibility threshold is increasing from £12,000 to £18,000. This change is set to lift around 70,000 high-street properties out of business rates entirely.
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Sector-Specific Cuts: Pubs, social clubs, and live music venues benefit from a 20% cut in business rates.
If you operate a physical venue or small commercial property, review your rateable value to check if you now fall under the expanded threshold or qualify for sector cuts.
Capital gains & exit planning: BADR limit halved
One of the biggest announcements for business founders planning an exit relates to Business Asset Disposal Relief (BADR):
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Lifetime Limit Reduction: The lifetime limit for BADR will be halved from £1,000,000 to £500,000 (effective from 6 April 2027).
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CGT Rate: While the reduced BADR rate itself remains at 18%, company owners selling their business above £500,000 will face higher overall Capital Gains Tax (CGT) liabilities on any surplus.If you are planning a company sale, management buyout, or succession exit over the next 12 to 24 months, timing and structuring are now crucial. Re-evaluating your valuation and exit timeline before April 2027 could save significant tax exposure.
Wage & mileage overhead costs
Employer operational budgets will see immediate adjustments in payroll and staff expenses:
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National Living Wage: Increases by 3.9% to £13.20 per hour, driving up baseline payroll costs.
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Business Mileage Rate: In welcome news for mobile workforce teams, the tax-free mileage rate for business miles driven over 10,000 miles per year increases from 25p to 35p per mile.Update your payroll systems early for the wage increases and review your business expense policies to reflect the higher approved mileage rate.
Sole traders, micro-businesses & start-ups
Micro-businesses and early stage entrepreneurs receive boost measures aimed at easing startup costs:
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Trading Allowance Tripled: The tax-free trading allowance for sole traders and side-hustles triples from £1,000 to £3,000 per tax year.
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Young Entrepreneurs Allowance: A new government scheme launched to support young founders by covering up to a year of living expenses during the startup phase.Devolution, local taxes & anti-avoidance
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Local Tourist Tax Powers: Metro mayors will gain powers to introduce overnight visitor levies (tourist tax), which could impact local accommodation and hospitality providers depending on regional implementation.
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HMRC Compliance & VAT: HMRC is receiving additional funding to target tax gap non-compliance, with specific focus on online marketplace sellers violating VAT regulations.
Key Highlights for Landlords
2% Hike on property income tax rates (From April 2027)
Property-Specific Tax Surcharge: Individual landlords paying tax via Self Assessment will see property income tax rates rise by 2 percentage points across all main income tax bands.
The New Rates:
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Basic Rate: Increases from 20% to 22%
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Higher Rate: Increases from 40% to 42% (or 44% under specific regional proposals)
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Additional Rate: Increases from 45% to 47% (or 49% under specific regional proposals)
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Company Exemption: This tax increase applies only to personal property income, not to rental profits held inside limited company structures (which continue to fall under Corporation Tax rates).
Action plan for business owners
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Review exit plans: Schedule a tax consultation if you plan to sell shares or assets exceeding £500k to model the impact of the BADR change.
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Audit property rates: Check your rateable values against the new £18,000 SBRR threshold.
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Adjust 2027 operating budgets: Factor in the £13.20/hr National Living Wage and revised mileage expense rates.
Every business structure is different. Whether you need help modelling your exit tax strategy, navigating business rates, or managing payroll updates, we’re here to help. Contact us today.