Introduction to the Autumn Budget 2026

Following the usual speculation and anticipation surrounding the first Budget of Andy Burham’s Government, the Autumn Budget 2026 has been announced against the backdrop of another challenging economic period. Sweeping reforms had already been ruled out, with the focus instead on targeted measures designed to balance the need for economic growth amid continued borrowing pressures and geopolitical uncertainty.

With increases to income tax and NIC for workers as well as VAT all being ruled out, the Chancellor once again turned his attention to rental and savings income. From 6 April 2027, the rates of tax applying to savings and rental income will increase by a further two percentage points, rising to 24%, 44% and 49% for basic, higher and additional rate taxpayers respectively. This follows the equivalent increase announced in Budget 2025. Dividend tax rates, however, remain unchanged at 10.75%, 35.75% and 39.35%, while personal tax thresholds will remain frozen until April 2031, continuing the effects of fiscal drag.

The proposal last year to cut the cash ISA allowance down from £20,000 to £12,000 for those under 65 has been abandoned, meaning the allowance will remain aligned with the Stocks and Shares ISA at £20,000. The Government also announced plans for a new "Starter ISA" aimed at encouraging first-time investors.

Pensions escaped the more significant reforms this time around, although the Chancellor committed to introducing a new “Pension Tax Allowance", designed to ensure those with solely state pension income, did not become liable to income tax. This measure comes as the full state pension is due to exceed the personal allowance for the first time.

For business owners and entrepreneurs, the Chancellor announced a tripling of the trading allowance, rising to £3,000, as well as a new “Young Entrepreneurs Allowance”, aimed at supporting early-stage founders. At the other end of the scale, a new “Founders’ Relief” is being introduced from 6 April 2027, providing a 10% rate of capital gains tax on up to £10m of qualifying lifetime gains. This new relief will be examined closely, particularly its interaction with Business Asset Disposal Relief, which has had its lifetime limit reduced once again from £1,000,000 to £500,000.

The Chancellor confirmed the retention of full expensing, along with an increase to the main rate first-year allowances to 50% from 1 January 2027. This is partly offset by a reduction in the main pool writing-down allowances to 12%, from April 2027.

The high street received targeted support with a reduction in business rates from 55% to 35% for social clubs, pubs, and live music venues from 1 April 2027. The threshold for Small Business Rate Relief was also increased from £12,000 to £18,000 to help with smaller firms, although adult gaming centres and vape shops are specifically excluded from business rates relief. Machine Games Duty will rise to 25% for higher stakes machines.

The banking sector will also face a higher tax burden, with the bank surcharge increasing by three percentage points from January 2027 for a temporary period of 15 months.

Finally, business mileage at the main rate was maintained at 55p for the first 10,000 miles, with the rate thereafter increasing from 25p to 35p from 6 April 2027.

For full details, see our Budget summary here.