Autumn Budget 2026 – What Does It Mean for You?

The Chancellor, John Healey, delivered the Autumn Budget on 28th October 2026, announcing a number of changes that will affect individuals, small businesses, landlords and company directors.

There's plenty to digest, but don't worry! We've picked out some of the key announcements and explained what they mean in plain English.

1. Income Tax – No Change to the Main Rates

The main Income Tax rates remain unchanged at 20%, 40% and 45% in England, Wales and Northern Ireland. However, landlords and people earning taxable savings interest will see increases from April 2027.

The new tax rates on property and savings income will be:

• Basic rate: 24%

• Higher rate: 44%

• Additional rate: 49%

What does this mean? If you receive rental income or taxable savings interest, you could face a higher tax bill from April 2027.

2. Good News for Sole Traders & Employees – Higher Mileage Allowances

If you use your own car or van for business, there's some welcome news!

The tax-free mileage allowance is increasing:

• First 10,000 business miles: 55p per mile, up from 45p, effective from 6 April 2026.

• Miles above 10,000: 35p per mile, up from 25p, effective from 6 April 2027.

3. Trading Allowance Increasing to £3,000

From April 2027, the Trading Allowance will increase from £1,000 to £3,000.

This is particularly good news for people earning a little extra income from a side business. Those with qualifying trading income of £3,000 or less may no longer need to declare that income to HMRC, provided they have no other reason to register or submit a tax return.

4. Changes for Limited Company Owners

Corporation Tax rates remain unchanged:

• 19% small profits rate

• 25% main rate

However, anyone considering selling their business should be aware that the lifetime limit for Business Asset Disposal Relief will reduce from £1 million to £500,000 from April 2027. This could mean a larger Capital Gains Tax bill when selling a qualifying business.

5. National Minimum Wage Increasing

From April 2027, minimum hourly wage rates will increase to:

• Age 21 and over: £13.21

• Age 18–20: £11.27

• Age 16–17 and eligible apprentices: £8.31

Employers should factor these increases into their payroll costs.

6. Making Tax Digital – A Little Breathing Space!

Making Tax Digital (MTD) for Income Tax continues to be rolled out.

For those required to join from April 2027, HMRC has announced that penalty points won't be issued for late quarterly updates during the 2027/28 tax year.

Quarterly submissions will still be required, but this gives newly affected taxpayers some time to adjust.

7. Changes to Self Assessment Payments

From April 2029, HMRC plans to change how taxpayers who currently make Payments on Account pay their Income Tax.

Instead of the familiar January and July payments, taxpayers will make more regular payments throughout the year. The finer details are still being developed, but this could make tax budgeting easier for some people.

Frequently Asked Questions

1. Will I pay more Income Tax after the Budget?

Not necessarily. The main Income Tax rates haven't changed, although people receiving rental income or taxable savings interest may pay more tax from April 2027.

2. Can I now claim 55p per mile for business travel?

Yes, if you use the approved mileage method and qualify for the allowance. The 55p rate applies to the first 10,000 business miles from 6th April 2026. The higher-mileage rate remains 25p until April 2027.

3. Do I still need to submit a Self Assessment tax return?

Possibly if you have taxable income to declare or if you've received a Notice To File from HMRC! The deadline for submitting your 2025/26 online Self Assessment tax return remains 31st January 2027. The Budget doesn't change that deadline.

4. Has Making Tax Digital been cancelled or delayed?

Sadly not. MTD for Income Tax is continuing, although some groups are exempt and HMRC has announced temporary penalty easements for people joining in April 2027.

5. Do I need to do anything now?

For most people, there's no immediate action needed. However, it's worth understanding how the changes could affect your finances and planning ahead, particularly if you're a landlord, sole trader or business owner.

Need Help Understanding What This Means for You?

Tax changes can be confusing, but they don't have to be!

At Freedom Financials, we help individuals and small businesses understand their tax obligations without all the complicated jargon.

Whether you're self-employed, running a limited company or renting out a property, we're here to help.

Get in touch with Freedom Financials for friendly, straightforward accounting advice.

Written by Esther Guy

Full details of the budget report can be found here - Budget Report 2026