A company director preparing to sell a business may face different tax decisions following the Autumn Budget 2026. Meanwhile, sole traders, landlords and employers must consider changes to allowances, reporting requirements and business costs.
Chancellor John Healey delivered the Budget on 28 October 2026, announcing measures affecting personal taxation, business investment, Capital Gains Tax and VAT administration.
However, not every announcement changes the law immediately. Several measures require legislation, while others have commencement dates extending into 2029.
This guide explains the major UK tax changes, who they affect and the practical steps worth considering.
The Autumn Budget 2026 introduces changes affecting business disposals, employment costs, smaller trading activities, savings income and tax administration.
Although the main Corporation Tax rates remain unchanged, several targeted measures could affect future business decisions.
The most significant announcements for business owners include:
The financial impact will depend on business structure, taxable profits, employees, assets and transaction dates.
Business owners should distinguish measures already in effect from those proposed for Finance Bill 2026-27.
The government plans to increase the trading allowance from £1,000 to £3,000 from 6 April 2027. The self-assessment reporting threshold for trading income will also increase to £3,000.
This change could benefit self-assessment individuals earning modest amounts from freelance work, online selling, tutoring and other qualifying trading activities. Importantly, the trading allowance relates to gross trading income before expenses. It does not mean every business earning £3,000 in profit automatically qualifies for an exemption.
Consider an individual who earns £2,400 from occasional freelance services during 2027/28.
If the legislation takes effect and the individual qualifies for full trading allowance relief, that income could fall entirely within the £3,000 allowance.
However, taxpayers generally cannot deduct business expenses and claim the trading allowance against the same income.
Those with significant expenses may benefit more from calculating their actual taxable profit.
The existing £1,000 allowance continues to apply during 2026/27. Individuals must also consider other reasons they might need to submit a tax return.
For further guidance on the existing rules, read our article on the £1,000 trading allowance for online sellers.
From 6 April 2027, the government plans to apply higher income tax rates to taxable savings income and property income.
The announced rates are:
The savings rates will apply throughout the UK. The announced property rates will apply in England, Wales and Northern Ireland, with powers available to devolved governments to set their own property income rates.
Landlords may pay more tax on their taxable rental income, even without an increase in rental receipts. For example, an additional two percentage points of tax on £10,000 of taxable property income would increase the relevant tax charge by £200.
The actual increase compared with 2026/27 may differ because the announced 2027/28 rates incorporate changes announced in successive budgets. Landlords should review allowable expenses, property finance costs and any available tax reductions when estimating their liabilities.
No. The personal savings allowance remains relevant.
Under current HMRC guidance, basic-rate taxpayers may receive up to £1,000 of savings interest tax-free. Higher-rate taxpayers have an allowance of £500, while additional-rate taxpayers receive none.
Other reliefs, including the starting rate for savings and tax-free ISA treatment, can also affect the final tax position.
The Business Asset Disposal Relief lifetime limit is set to decrease from £1 million to £500,000 for qualifying disposals made on or after 6 April 2027.
The relief currently provides an 18% capital gains tax rate on qualifying business disposals, subject to eligibility conditions and the available lifetime limit. This reduction could affect directors, shareholders and sole traders considering business sales.
Assume an individual makes a qualifying chargeable gain of £700,000 and has never claimed Business Asset Disposal Relief.
Under the proposed new limit, only £500,000 could qualify for the reduced rate. The remaining £200,000 would be subject to the applicable ordinary capital gains tax rules.
If the ordinary rate on that remaining amount were 24%, the difference between 18% and 24% would represent an additional £12,000. This illustration excludes annual exemptions and other possible adjustments. It also assumes the individual qualifies for relief and that the stated tax rates apply.
Transaction timing requires careful consideration.
HMRC’s policy paper includes provisions addressing certain contracts entered into before 6 April 2027 but completed later, alongside particular share reorganisations.
Consequently, signing a contract before the deadline does not automatically mean the existing lifetime limit applies. Business owners should review the transaction structure, relief conditions and anti-forestalling provisions before making decisions.
The government has announced a new Founders’ Relief offering a 10% capital gains tax rate on up to £10 million of qualifying lifetime gains per individual.
The measure is intended for eligible founders and significant early investors in qualifying high-growth, innovative companies.
The proposed commencement date is 6 April 2027.
However, the detailed eligibility conditions remain subject to a technical consultation, which closes on 30 November 2026.
This matters because Founders’ Relief is not a general replacement for Business Asset Disposal Relief. A business owner cannot assume eligibility simply because they founded a limited company or hold shares.
Proposed conditions concern the individual’s connection with the company, equity ownership, and the company’s growth and innovation characteristics. Until the detailed rules are finalised, business owners should avoid basing transaction decisions solely on the announced 10% rate.
The Autumn Budget maintains the main corporation tax rate at 25% and the small profits rate at 19% for the financial year beginning 1 April 2028.
Under the published rules, marginal relief applies to qualifying companies with profits between £50,000 and £250,000. Associated companies and shorter accounting periods can affect those thresholds. Therefore, there is no general increase to the main corporation tax rate in this budget.
The government proposes two changes to capital allowances:
These measures concern qualifying expenditure, not every business purchase.
For companies investing in equipment or machinery, the timing of expenditure and choice of available allowance may influence tax relief.
The Annual Investment Allowance and full expensing rules should also be considered where available.
The budget proposes removing the requirement for an R&D Claim Notification Form for claims made on or after 1 April 2027.
HMRC also plans to simplify the Additional Information Form from autumn 2027. Removing the notification form would not eliminate the need to substantiate qualifying R&D expenditure or submit the required claim information. Companies should continue maintaining technical project records, cost calculations and supporting evidence.
The Budget proposes extending VAT online marketplace liability rules to certain UK business sellers from October 2027.
Under the announced approach, online marketplaces will become responsible for collecting VAT on relevant sales by UK VAT-registered businesses.
The rules will also cover certain UK businesses meeting a minimum annual sales threshold of £90,000 on an individual platform. Personal sales, second-hand goods and business-to-business transactions are excluded from the announced extension.
Retailers using marketplaces should distinguish between the platform’s new VAT collection responsibilities and their own wider VAT obligations.
A business selling through several platforms may need to review:
The platform-specific £90,000 figure should not be confused with the general VAT registration test, even though both currently use that amount.
Further implementation details will be set through secondary legislation.
The government has published an implementation roadmap for mandatory VAT e-invoicing from 1 April 2029.
VAT-registered businesses will generally need to issue and receive qualifying VAT invoices electronically in a structured format, unless an exemption applies. The requirements concern electronic data exchange, not simply emailing PDF invoices. The government has selected Peppol as the core interoperability framework.
However, the final technical standards, detailed requirements and exemptions are still being developed. Businesses can begin reviewing their invoicing systems without assuming that their existing software will automatically satisfy the eventual rules.
Employers should prepare for higher statutory wage rates and changes to the reporting of taxable employee benefits.
The government has accepted the Low Pay Commission’s recommendations for a 3.9% increase across the principal minimum wage rates.
The correct apprentice rate depends on age and the year of apprenticeship.
Employers should review employee ages, working hours, payroll settings and salary budgets ahead of the April implementation. For an employee aged 21 or over working 37.5 paid hours weekly, the 50p hourly increase represents £18.75 more in gross weekly wages. Employer National Insurance and pension contributions could add further costs.
Mandatory payrolling of benefits in kind will be introduced in stages.
The announced timetable brings company cars, vans, associated fuel benefits and medical benefits into mandatory payrolling from 6 April 2027. Most remaining taxable benefits will follow from 6 April 2028, with exceptions for employment-related loans and employer-provided living accommodation.
Employers should review benefit records, employee communications and payroll software before the relevant commencement dates.
The Budget increases business rates relief for eligible retail, hospitality and leisure properties in England from April 2027.
The government will raise the Small Business Rate Relief thresholds for qualifying properties in these sectors:
Eligibility depends on the property’s classification and applicable conditions. These thresholds are not universal relief limits for every commercial property.
Pubs, social clubs and all but the largest live music venues will also receive additional relief, taking the announced total to 35% for 2027/28 and 2028/29.
Eligible retail, hospitality and leisure properties will receive protection limiting certain bill increases to CPI inflation during those years.
However, increases caused by property improvements or the withdrawal of other reliefs may be treated differently. Businesses should check their rateable value and local authority billing information before estimating savings.
The Autumn Budget introduces a further penalty easement for taxpayers joining Making Tax Digital for Income Tax in April 2027.
Qualifying sole traders and landlords with more than £30,000 of relevant gross income in 2025/26 are scheduled to join from 6 April 2027, subject to exemptions. The Budget confirms that this group will not receive late submission penalty points for their first four quarterly updates covering 2027/28.
The easement does not remove the obligation to submit quarterly updates. Taxpayers must still maintain digital records and complete their annual tax return.
Those already required to use MTD from April 2026 should continue meeting their existing obligations.
For further information, read the guide to Making Tax Digital for Income Tax 2026.
From April 2029, the government intends to require taxpayers already making self-assessment payments on account to make smaller, more regular payments during the tax year.
The proposed system will bring payments closer to the period in which income is earned.
The detailed payment arrangements remain subject to further development and legislation. Businesses should not change their current payment schedules until the new requirements take effect. The Budget also proposes Direct Debit instructions for VAT and PAYE liabilities from April 2029, subject to exceptions. Other payment methods will remain available before specified cut-off dates.
Businesses should identify the announcements affecting their operations before changing tax arrangements or financial plans.
A practical review should cover:
Professional advice may be particularly valuable where several changes interact.
For example, a director selling a company could need to consider business disposal relief, employment income, share schemes and the tax treatment of transaction proceeds. The most appropriate decision depends on the facts of the transaction and the legislation in force.
The Autumn Budget brings different tax considerations for directors, employers, landlords and growing businesses. Reviewing their financial impact early can support better decisions about business investment, tax liabilities and future reporting requirements.
Apex Accountants provides tax services for individuals and businesses, including tax planning, corporation tax, VAT and capital gains tax advice.
For guidance specific to your circumstances, contact us today!.
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