The Autumn Budget on 28 October 2026 left the headline rates of income tax, National Insurance, VAT and corporation tax unchanged. For owners of established businesses, the changes that matter are elsewhere: a lower Business Asset Disposal Relief limit from April 2027, a proposed new Founders' Relief, a bigger first-year allowance for equipment, a higher National Living Wage, and a series of changes to how HMRC collects tax over the next few years. Here is a summary of what was announced and the questions worth taking to your advisers.
Please note: this article is general information, not tax, legal, financial or investment advice. It is based on the Budget documents the government published on 28 October 2026. Many measures still need legislation, some are only proposals under consultation, and the details can change. Your own position depends on your circumstances, so take advice from a qualified professional before acting on anything here.
Selling your business: the Business Asset Disposal Relief limit is halved
Business Asset Disposal Relief lets qualifying owners pay a lower rate of capital gains tax when they sell all or part of their business. The lifetime limit falls from £1 million to £500,000 for disposals made on or after 6 April 2027. The government says there will be special provisions for contracts entered into before that date that complete afterwards.
The relief gives an 18% rate on qualifying gains, where the higher main rate of capital gains tax is 24%. As a simple illustration of the arithmetic, not a forecast for any individual, that six-point difference on the £500,000 that will no longer qualify comes to up to £30,000 of extra tax. If a sale is on your horizon, the timing of exchange and completion now matters, so involve your advisers early rather than in the final weeks of a deal.
A proposed Founders' Relief, still under consultation
The government is consulting on a new Founders' Relief, with the consultation closing on 30 November 2026. As proposed, it would give a 10% capital gains tax rate on up to £10 million of lifetime gains for disposals from 6 April 2027, with that limit reduced by any Business Asset Disposal Relief or Investors' Relief claimed from 6 April 2027.
The proposed conditions are demanding. As proposed, the founder must have held at least 25% of the ordinary share capital when the trade, or preparation for it, began, held the shares for at least five tax years, and been UK resident for five continuous tax years. The company must be a trading company with turnover of at least £10 million and at least 15 full-time equivalent employees, and must meet two of three tests: 25% compound growth in turnover, 25% growth in employees, or at least £1.5 million spent on research and development. Some sectors would be excluded. This is a proposal, not law. It would be unwise to plan a sale around it until the final rules are published.
Investing in equipment: a bigger first-year allowance
For qualifying main-rate plant and machinery expenditure incurred on or after 1 January 2027, the first-year allowance rises from 40% to 50%. As with the current 40% allowance, it is open to sole traders and partnerships as well as companies, and second-hand assets and cars do not qualify. Full expensing continues for companies. Separately, the main rate of writing-down allowance falls from 14% to 12% from 1 April 2027 for corporation tax and 6 April 2027 for income tax.
If you are planning a significant equipment purchase, ask your accountant how the timing fits with your year end and which allowance applies. Corporation tax stays at 25% for the main rate and 19% for the small profits rate.
People costs: wages, National Insurance and benefits
From April 2027, the National Living Wage for workers aged 21 and over rises by 3.9% to £13.21 an hour. The rate for 18 to 20 year olds rises to £11.27, and the rate for 16 and 17 year olds and apprentices to £8.31. The government accepted the Low Pay Commission's recommendations in full. If your pay structure keeps a gap between entry-level roles and supervisors, budget for the knock-on effect as well as the headline rise.
As previously announced, most National Insurance limits and thresholds stay at their 2026 to 2027 levels until the 2030 to 2031 tax year.
Mandatory payrolling of benefits in kind starts with company cars and vans, fuel and medical benefits from 6 April 2027, with most other benefits following from 6 April 2028. If your business still reports benefits on P11D forms, check that your payroll provider and processes will be ready.
From 6 April 2027, the approved mileage rate for business miles above 10,000 in a tax year rises from 25p to 35p a mile.
Pensions, savings and property income
As already legislated, most unused pension funds and death benefits will come within the scope of inheritance tax from 6 April 2027. Owners who have treated their pension as wealth that passes outside their estate may want to review their wills and succession plans with an adviser before then.
From 6 April 2027, the separate income tax rates on savings income and property income rise to 24%, 44% and 49% at the basic, higher and additional rates. The savings rates apply across the UK. The property rates apply in England and Northern Ireland, while Scotland and Wales set their own. This matters if you hold property or significant cash savings personally rather than through a company.
Business rates in England
From April 2027, the Budget raises the small business rate relief threshold, and the government says a further 70,000 retail, hospitality and leisure businesses will pay no business rates. For two years, no property in those sectors faces an above-inflation increase, and pubs, music venues and social clubs get an extra 20% reduction. Business rates are devolved, so these changes apply in England. What you pay depends on your own property's rateable value, so check your bill and your local council's guidance.
How HMRC collects tax is changing
Several administrative changes are on the way. None of them changes how much tax you owe, but each will need time, systems or a change of habit.
Directors: for qualifying offences under HMRC's security deposit rules committed on or after 1 April 2027, a court will be able to disqualify a director for up to five years following a conviction.
Errors: from 1 April 2028, a new general duty applies to correct, or tell HMRC about, errors once you become aware of them. Errors left uncorrected can be treated as deliberate for penalty purposes.
Making Tax Digital: for income tax self assessment, there will be no late-submission penalty points for quarterly updates in the 2027 to 2028 tax year. The updates still need to be filed.
Payments: the government plans to require a Direct Debit instruction for VAT and PAYE liabilities from April 2029, with some exceptions. More regular in-year payments on account for self assessment are also planned from April 2029.
Invoicing: VAT e-invoicing is due to become mandatory from April 2029, with HMRC to publish an implementation roadmap.
Debt collection: HMRC is expected to gain powers to recover lower-value tax debts directly from bank accounts from the 2029 to 2030 tax year, aimed at people who repeatedly fail to engage. This needs a future Finance Bill.
Online sales: online marketplaces will collect VAT on sales by UK VAT-registered sellers, and by other UK sellers above a threshold expected to be £90,000 a year per platform. The start date, expected to be October 2027, and the threshold will be set in regulations.
What to do now
If you might sell in the next few years, ask your advisers how the Business Asset Disposal Relief change affects your timing, and keep an eye on the Founders' Relief consultation without relying on it.
If you plan to invest in equipment, check whether buying before or after 1 January 2027 changes the allowance you can claim.
Update your budget for April 2027 pay rates now, including the effect on roles paid just above the National Living Wage.
Ask your payroll provider about payrolling benefits from April 2027.
Review your wills, pensions and succession plans in light of the April 2027 inheritance tax change.
Put the 2028 and 2029 administrative changes on your finance team's plan so they do not arrive as a surprise.
Budgets create decisions, and decisions are easier to make well when you can test them against other owners who are weighing the same things. That is what a Growth Board is for: a confidential table of experienced business owners from non-competing sectors.
Disclaimer
This article is general information about announcements made in the Autumn Budget on 28 October 2026. It is not tax, legal, financial or investment advice and should not be relied on as such. Measures may change during consultation and before they become law, and how they apply depends on your circumstances. IGNITE Academy is not a firm of accountants, tax advisers or financial advisers. Please take advice from a suitably qualified professional before making any decision.
Sources
Budget 2026: Overview of Tax Legislation and Rates, GOV.UK
Budget 2026 document, HM Treasury (PDF)
Capital Gains Tax: introduction of a Founders' Relief, GOV.UK
Low Pay Commission recommendations take the National Living Wage to £13.21, GOV.UK