October 28, 2026

Autumn Budget 2026: key announcements

The Autumn Budget 2026 included measures affecting individuals, families, employers and businesses across the UK.

Our tax team has reviewed the announcements and summarised some of the key points below. You can download our full summary for a more detailed overview.

Download the full Autumn Budget summary

Key announcements

Income tax and employment

There were no changes to the rates of Income Tax on employment and pension income, or to dividend tax rates. However, the rates applying to property and savings income will increase by 2%.

The National Minimum Wage and National Living Wage will increase by 3.9%, including for workers aged 18 to 20. The government also announced additional funding for apprenticeships, proposed reform of non-compete clauses and paid parental leave for eligible self-employed fathers and partners.

Capital gains tax and support for founders

The lifetime limit for Business Asset Disposal Relief will be reduced from £1 million to £500,000.

A new Founders’ Relief will provide a 10% Capital Gains Tax rate on qualifying lifetime gains of up to £10 million.

Corporate transactions

Changes will be made to the tax rules governing company purchases of their own shares, demergers and the transactions in securities anti-avoidance rules.

Business investment and capital allowances

Full expensing will be retained. The first-year allowance for qualifying main-rate plant and machinery will increase from 40% to 50%, while the main-rate writing-down allowance will reduce from 14% to 12%.

Business rates

For retail, hospitality and leisure businesses, the rateable-value threshold for small business rate relief will increase from £12,000 to £18,000.

Employee rewards and entrepreneurs

The Budget included increased relief for employee share rewards under measures described by the Chancellor as “EMI2”.

The trading allowance will increase from £1,000 to £3,000, although the detailed qualification requirements are still to be confirmed.

Additional support announced for founders includes a young entrepreneurs allowance, a new scale-up programme for female founders and an increase in the British Business Bank’s commitment to funds for women-led businesses to £200 million.

The government will also consult on simplifying Corporation Tax.

Tax administration and compliance

HMRC will receive additional funding for compliance activity and stronger powers to collect overdue tax from people who can afford to pay but have not responded to repeated contact.

Self Assessment payment arrangements will also be reformed, with taxpayers expected to make smaller, more regular payments.

Savings and pensions

The planned reduction to the Cash ISA allowance will not proceed. The annual ISA allowance will remain at £20,000 for people of all ages.

The government will work with the financial services industry on a new Starter ISA intended to encourage first-time investors.

Duties and motoring

The 5p reduction in fuel duty will be extended until July 2027.

The higher mileage rate will increase from 25p to 35p per mile, and the increase to the standard mileage rate will be made permanent.

The Budget also included £10 million of alcohol duty relief for small brewers.

The economy and public finances

The Office for Budget Responsibility forecasts GDP growth of 1.2% in 2026, followed by growth of 1% in 2027. Forecasts from 2028 onwards have been revised upwards.

Borrowing is forecast to fall to 1.8% of GDP by 2030/31, while debt is forecast to reach 81.7% of GDP in 2031/32. Spending on debt interest is forecast to be £14 billion higher this year.

Reactions from our senior tax team

Corporate tax and transactions

“An interesting Budget from a transactions tax perspective, with the reduction in Business Asset Disposal Relief offset by a new Founders’ Relief reintroducing the 10% Capital Gains Tax rate for qualifying disposals. It was also good to hear the announcement of additional employee share scheme relief, described as ‘EMI2’ by the Chancellor.”

Martin Adams, Partner and Head of Tax

Private clients and family businesses

“The 10-year plan is a welcome commitment to greater certainty, giving businesses and families more confidence to invest, grow and plan for the next generation. The surprise announcement of Founders’ Relief at 10% is also a positive signal for enterprise, although the detailed rules, as is always the case, will be key. Changes to the rules on the transfer of family businesses to future generations had been expected, but again the detail will need to be considered.”

Tim Lynch, Private Client Tax Partner

Private businesses

“For private businesses, today’s Budget presents a mixed picture. It includes welcome measures to support investment, entrepreneurship and growth, such as continued capital investment incentives and enhanced support for founders.

“However, increased employment costs and changes to the taxation of non-founder business owners could significantly affect profit extraction, succession and exit planning. Relief on business rates and energy costs may benefit some businesses, while any changes affecting family business transfers will require close attention as details emerge.

“Overall, the Budget continues to encourage investment but makes remuneration, succession and exit planning more important than ever.”

Francesca Hutcheson, Corporate Tax Partner

Family businesses and owner-managers

“Presenting accelerated Self Assessment payments as a way to avoid large bills misses the point. Smaller instalments do not reduce tax. They simply leave less cash in the business. Aligning the self-employed more closely with PAYE overlooks fluctuating profits, while the challenges of Making Tax Digital raise questions about smooth implementation.

“This also feels like another blow to Business Asset Disposal Relief. Although Founders’ Relief may help some, it is no substitute for the typical owner-managed business. Higher tax on property income will concern landlords, while the decision not to increase dividend tax rates is a welcome relief.”

Ben Allman, Partner, Business Services

International tax and investment

“Budget 2026 positions the UK as a destination for global investment, highlighting its position as the second-largest holder of inward foreign direct investment stock in the G7, while committing to Corporation Tax simplification intended to improve certainty and make the UK a better place to invest.

“For multinational groups evaluating the UK against competing jurisdictions, certainty, administrative complexity and the ability to model the long-term tax cost of an investment matter. Ultimately, the UK’s attractiveness depends on how tax, labour costs, incentives, infrastructure and access to finance combine to deliver investment returns.”

Emma Clewes, Corporate Tax Director

Capital allowances

“The Budget has announced an increase in the first-year allowance from 40% to 50% for qualifying main-rate plant and machinery. This is particularly helpful for businesses that cannot benefit from 100% full expensing.

“However, this comes alongside a further reduction in the main-rate writing-down allowance from 14% to 12%, meaning relief for expenditure remaining in the pool will be obtained more slowly.”

Thomas Hill, Corporate Tax Manager

If you would like advice on how the Autumn Budget 2026 changes may affect you, your family or your business, please get in touch with Ballards.

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This article has been prepared for information purposes only. Formal professional advice is strongly recommended before making decisions on the topics discussed in this release. No responsibility for any loss to any person acting, or not acting, as a result of this release can be accepted by us, or any person affiliated with us.

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