Autumn Budget 2026: How the new tax rules affect you

The Chancellor's Autumn Budget 2026 included a number of tax measures that could affect individuals, investors, landlords and business owners in the years ahead. From higher tax rates on savings and property income to reforms affecting business disposals and VAT administration, the announcements signal the Government's future tax direction.

While many of the measures will not take effect immediately, some remain subject to legislation and consultation. Understanding the proposed changes now can help you prepare ahead of implementation.

Key tax changes announced in the Autumn Budget 2026

No further increases to income tax or dividend tax rates

Main income tax and dividend tax rates will remain unchanged for 2027/28. Separate increases apply to savings and property income.

Trading allowance increased to £3,000

From 6 April 2027, the annual trading allowance will rise from £1,000 to £3,000, benefiting individuals with small trading activities or side businesses.

Business Asset Disposal Relief threshold reduced

From 6 April 2027, the lifetime limit for Business Asset Disposal Relief (BADR) will fall from £1 million to £500,000. Qualifying gains within the available limit will continue to be taxed at 18%.

Founders' Relief introduced

For qualifying share disposals made on or after 6 April 2027, founders and significant early investors in high-growth, innovative UK companies may benefit from a 10% tax rate on lifetime gains of up to £10 million.

Proposed qualifying conditions include the size of the founding stake, the length of share ownership, at least five continuous years of UK tax residency before disposal, company turnover and employee growth, and research and development expenditure. Further guidance is expected.

Savings income tax rates to increase

From 6 April 2027, savings income tax rates will rise to:

• 24% for basic-rate taxpayers
• 44% for higher-rate taxpayers
• 49% for additional-rate taxpayers

Personal savings allowances will remain unchanged at £1,000, £500 and nil, respectively. Those earning interest on savings may wish to review their tax arrangements.

Property income tax rates rising

From 6 April 2027, property income tax rates across England, Wales and Northern Ireland will rise to 24% for basic-rate taxpayers, 44% for higher-rate taxpayers and 49% for additional-rate taxpayers.

Mansion tax threshold unchanged

The mansion tax threshold will remain at £2 million. From April 2028, it will apply to residential properties in England valued at £2 million or more, based on 2026 valuations, in addition to council tax.

Changes to Payments on Account

From April 2029, Self-Assessment taxpayers who make Payments on Account will move to smaller, more regular payments during the tax year in which income is earned.

Payment frequency is yet to be confirmed. The change could affect cash flow and budgeting.

Online marketplaces to collect VAT

From October 2027, online marketplaces will be responsible for collecting VAT on relevant sales by UK businesses that are VAT registered or exceed the £90,000 annual sales threshold on an individual platform.

The changes will exclude personal sales, second-hand goods and business-to-business transactions. Businesses selling through online marketplaces should review their VAT processes ahead of implementation.

What should you do now?

The most significant changes for many taxpayers are likely to be the higher rates on savings and property income, together with the reduction in the Business Asset Disposal Relief lifetime limit. Although these measures are not due to take effect immediately, early planning may create opportunities that are no longer available once the new rules come into force.

Depending on your circumstances, the proposed changes may affect:

• How you structure savings and investments
• The tax efficiency of rental property income
• Business exit planning
• Self-Assessment cash-flow management
• VAT compliance obligations

Looking for the bigger picture?

This article focuses on the tax measures announced in the Budget. For a broader overview of the Chancellor's statement and other key announcements, read our companion article: Autumn Budget 2026: What you need to know.

To discuss how the Autumn Budget 2026 could affect your financial position, contact our SME accounting team on +44 (0) 20 7759 7553 or email [email protected].