Budget 2026, published on 28 October 2026, leaves the headline rates of income tax, National Insurance and VAT unchanged, and the personal allowance stays at £12,570 for 2027/28. The main tax rise falls on income from assets: from 6 April 2027 savings and property income will be taxed at 24%, 44% and 49%. The Budget also reduces the Business Asset Disposal Relief lifetime limit to £500,000 and raises the trading allowance to £3,000.
This summary sets out what changes and from when, using the Budget document and HMRC's Overview of Tax Legislation and Rates (OOTLAR). None of it is law yet. Most measures will be in Finance Bill 2026-27, and others will follow in secondary legislation, so treat each one as announced until it is enacted. For pre-Budget expectations, see our Budget preview.
Changes for individuals
| Measure | Change | From |
|---|---|---|
| Savings income rates | Basic 24%, higher 44%, additional 49% (20%, 40% and 45% in 2026/27); applies UK-wide | 6 April 2027 |
| Property income rates | Basic 24%, higher 44%, additional 49%; England, Wales and Northern Ireland | 6 April 2027 |
| Personal allowance and bands | £12,570; basic rate band £37,700; additional rate from £125,140, all unchanged | 2027/28 |
| Dividend rates | Unchanged at 10.75%, 35.75% and 39.35% | 2027/28 |
| Trading allowance | Up from £1,000 to £3,000, with the Self Assessment reporting threshold rising to match | 6 April 2027 |
| Pension Tax Allowance | Pensioners whose total income is no more than the full new State Pension pay no income tax (announced at Budget 2025) | 6 April 2027 to 5 April 2030 |
| Cash ISA limit | Stays at £20,000 and will not be reduced | No change |
| Lifetime ISA | Withdrawal charge cut to 20% for purchases above the property price cap | 29 October 2026 |
Budget 2025 had already raised savings and property rates by two points from April 2027. This Budget adds two more points from the same date. The government says 84% of income tax payers are unaffected. Scotland and Wales can set their own property income rates.
Worked example: a basic-rate landlord
Sam earns a salary of £30,000 and makes a rental profit of £10,000. All of it falls within the basic rate band. In 2026/27, Sam pays 20% on the rental profit, which is £2,000. In 2027/28, the property basic rate of 24% applies, so the same profit costs £2,400. A higher-rate landlord would pay £4,400 instead of £4,000. Our landlord tax calculator shows the effect on your own figures.
The Pension Tax Allowance is worth 20% of the gap between the full new State Pension and the personal allowance. For incomes above the full new State Pension, it is withdrawn at £1 for every £3 of extra income. How the trading allowance works now is explained in our trading allowance guide.
Changes for businesses and employers
| Measure | Change | From |
|---|---|---|
| Main rate first-year allowance | 40% to 50% | Expenditure on or after 1 January 2027 |
| Main rate writing-down allowance | Cut to 12% | 1 April 2027 (CT), 6 April 2027 (IT) |
| Corporation Tax | 25% main rate and 19% small profits rate kept for FY2028 | 1 April 2028 |
| Business Asset Disposal Relief | Lifetime limit cut from £1 million to £500,000 (the 18% rate is unchanged) | Disposals from 6 April 2027 |
| Founders' Relief (new) | 10% CGT on up to £10 million of lifetime gains for qualifying founders | 6 April 2027 |
| CSOP, renamed EMI2 | Option limit doubled to £120,000; exercise period extended to 15 years | 6 April 2027 |
| Bank surcharge | 3% to 6% for 15 months | 1 January 2027 to 31 March 2028 |
| Mileage rates | Rate above 10,000 miles up from 25p to 35p | 6 April 2027 |
| National Living Wage | Up 3.9% to £13.21 an hour | 1 April 2027 |
| Payrolling benefits | Mandatory for cars, vans, fuel and medical benefits; most other benefits follow | 6 April 2027; others 6 April 2028 |
| VAT on online marketplaces | Platforms collect VAT for UK VAT-registered sellers and other UK businesses selling £90,000+ a year per platform | October 2027 |
For small companies, the key change is to capital allowances. Full expensing is unchanged. The main-pool writing-down rate falls from 14% to 12%, which slows relief on main-pool spending that does not qualify for full expensing or the first-year allowance. The first-year allowance itself rises to 50%. Business owners planning a sale should note that the BADR limit falls to £500,000. A contract exchanged before 6 April 2027 can be covered by special provisions, so the timing of a sale now matters. Our article on capital gains tax changes sets out the current rates. Employers with company cars should plan for payrolling now, as explained in our P11D guide.
In England, business rates bills for qualifying retail, hospitality and leisure properties will be frozen in real terms for 2027/28 and 2028/29, so none faces an above-inflation increase. Pub relief will rise from 15% to 35% from 1 April 2027.
Changes to how tax is collected
- Payments on account. From April 2029, Self Assessment taxpayers who make payments on account will pay smaller amounts more often during the year;
- Direct debit. Businesses must set up a direct debit for VAT and PAYE liabilities from April 2029;
- E-invoicing. VAT invoices must be issued in a specified electronic format from 1 April 2029;
- Making Tax Digital. People joining MTD for income tax in April 2027 will not get late-submission penalty points for their first four quarterly updates of 2027/28;
- Employment expenses. The £2,500 threshold that sends expense claims through Self Assessment will be removed from 6 April 2028.
Announced, legislated or already in force?
Most items above will be in Finance Bill 2026-27 and have no legal force until it receives Royal Assent. The new National Insurance figures for 2027/28 will be set in secondary legislation in early 2027: the Lower Earnings Limit will be £6,916 and the Class 3 rate £19.05 a week, and the other thresholds stay frozen until 2030/31.
A few measures take effect from Budget day itself, once they are enacted. Pension and lump sum death benefits that would otherwise be tax-free, paid on or after 28 October 2026, no longer become taxable just because they are paid more than two years after the scheme administrator learned of the death. New inheritance tax rules on liabilities in trust arrangements apply to deaths and other chargeable events from the same date. Other measures are only proposals at this stage, including the distributions framework (draft legislation in 2027, in force from April 2028) and the new ISA incentive.
If the higher property and savings rates or the lower BADR limit affect your plans, take advice before April 2027. Our tax planning team can model the changes for individuals and owner-managed businesses, and our accountants for landlords can review how your portfolio is held.