The Chancellor delivered the Autumn Budget on 28 October 2026, setting out a number of tax and spending measures that will affect UK businesses and individuals over the next few years. The Government describes the Budget as supporting families and businesses while avoiding broad-based tax rises, but beneath the headlines there are some significant tax and compliance changes to prepare for.
For owner-managed businesses in particular, the Budget contains a mixture of increased costs, reduced tax reliefs and new compliance requirements alongside a handful of more positive measures.
At Welf Accountants, we have picked out the changes we think matter most to business owners, directors, landlords and individuals.
Autumn Budget 2026 at a glance
Among the key measures are:
the Business Asset Disposal Relief lifetime limit reducing to £500,000 from 6 April 2027
higher rates of tax on property and savings income
the National Living Wage increasing to £13.21 per hour
the main-pool writing-down allowance reducing to 12%
business mileage rates increasing
the trading allowance increasing from £1,000 to £3,000
changes to the taxation of company distributions
mandatory payrolling of certain benefits
future mandatory VAT e-invoicing
changes to the self-assessment payments on account system.
Some of these measures will not take effect immediately. However, for business owners in particular, decisions made during the next few months could have longer-term tax consequences.
Business Asset Disposal Relief changes
One of the most significant announcements for business owners considering selling their company is a reduction in the lifetime limit for Business Asset Disposal Relief (BADR).
From 6 April 2027, the lifetime limit will reduce from £1 million to £500,000.
BADR can reduce the Capital Gains Tax payable when qualifying business owners dispose of all or part of their business. Reducing the lifetime limit therefore has potentially significant consequences for entrepreneurs planning an exit.
For anyone contemplating a business sale, succession or restructuring, timing could now become an important part of the tax planning conversation.
Rather than rushing a transaction purely for tax reasons, business owners should review their circumstances early enough to understand whether the April 2027 change materially affects their plans.
Higher tax on property and savings income
Landlords and savers are also affected.
From 6 April 2027, the rates applying to property and savings income will be 24% for basic-rate taxpayers, 44% for higher-rate taxpayers and 49% for additional-rate taxpayers.
This means individuals with significant rental property portfolios or savings income should review the way their investments are structured.
For landlords, however, tax should never be considered in isolation. Moving property between personal and corporate ownership can itself trigger tax and other costs, so any restructuring needs to be considered carefully.
For savers, making effective use of available tax-efficient wrappers becomes increasingly important. The Budget confirmed that the cash ISA limit will remain at £20,000 from April 2027.
National Living Wage rises to £13.21
Employment costs continue to be an important issue for smaller businesses.
The National Living Wage will increase to £13.21 per hour from 1 April 2027.
For employers, the impact is wider than simply increasing the hourly wage.
Higher salaries can also feed through into employer National Insurance contributions, pension contributions and other employment-related costs.
Businesses with significant numbers of employees at or around the minimum wage should therefore incorporate the increase into their 2027 payroll and cash-flow forecasts.
Capital allowances: writing-down allowance reduces
Another potentially important change concerns capital allowances.
The main-pool writing-down allowance will reduce to 12%.
Many smaller companies will continue to obtain immediate relief on qualifying expenditure through the Annual Investment Allowance, so the change may not have an immediate effect on every business.
However, companies with existing capital allowance pools carried forward could see tax relief being obtained more slowly.
This makes the timing of significant investment in plant and machinery an area worth reviewing as part of tax planning.
Higher business mileage rates
There is some welcome news for employees, directors and the self-employed who use their own vehicles for business journeys.
The tax-free or tax-deductible mileage rate for cars and vans was increased to 55p per mile for the first 10,000 qualifying business miles on 6th April 2026. The higher-mileage rate is also increasing to 35p per mile from 6 April 2027.
For businesses which reimburse employees or directors for business mileage, this is a useful opportunity to review existing expense policies.
Trading allowance increases to £3,000
The Income Tax Trading Allowance will increase from £1,000 to £3,000 from 6 April 2027.
This will be particularly relevant to individuals earning relatively small amounts through freelance work, online selling and other side businesses.
For many growing businesses the allowance will quickly become irrelevant once income exceeds the threshold, but the increase should simplify tax affairs for some smaller traders.
Changes to company distributions
Looking slightly further ahead, the Government plans to modernise the tax framework around company distributions from April 2028.
This is particularly relevant to company shareholders because the rules can interact with:
share buy-backs
capital reductions
family succession
company reorganisations
demergers
extraction of accumulated reserves.
The detailed rules will matter enormously here, so this is an area we will be watching closely as further information emerges.
For owners considering a major reorganisation or extracting substantial accumulated reserves in the next few years, it is worth keeping the forthcoming changes in mind.
Changes to self-assessment payments on account
The Government is also planning changes designed to bring more self-assessment tax payments into the year in which the income is earned.
Full details and timing still need to be confirmed.
However, the direction of travel is important. Business owners, landlords and other self-assessment taxpayers may eventually find themselves paying tax earlier and more regularly.
That could have cash-flow implications, particularly for people accustomed to setting money aside for the traditional January and July payment dates.
Payrolling benefits becomes mandatory
Employers should also start preparing for further changes to payroll reporting.
From 6 April 2027, cars, vans, fuel and medical benefits will have to be reported through payroll rather than dealt with through the traditional year-end P11D process.
Businesses providing taxable benefits should therefore make sure their payroll software, processes and employee records are ready well in advance.
VAT e-invoicing is coming
Another longer-term compliance change is the move towards mandatory VAT e-invoicing from April 2029.
2029 may sound some way off, but businesses currently reviewing bookkeeping systems should bear this future requirement in mind.
For businesses already using cloud accounting platforms and automated bookkeeping processes, the transition may be relatively straightforward. Businesses relying heavily on manual invoices, spreadsheets or older accounting systems are likely to have more work to do.
Business rates: better news for some businesses
There was better news for some businesses operating from physical premises.
From 1 April 2027, Small Business Rate Relief will become more generous for qualifying retail, hospitality and leisure properties in England.
For qualifying properties, the rateable value threshold for 100% relief will increase from £12,000 to £18,000, with tapered relief available up to £21,000.
Pubs, social clubs and qualifying live music venues will also benefit from enhanced relief.
For independent high-street businesses, restaurants, pubs and hospitality operators, this could provide a meaningful saving.
What should business owners do now?
Not every measure requires immediate action.
However, there are several areas where we think planning before 6 April 2027 could be worthwhile.
Consider an early tax planning review if you:
are considering selling your business
expect to realise a significant capital gain
own substantial rental property
receive significant savings income
employ staff at or close to the National Living Wage
are planning significant capital expenditure
provide company cars, vans, fuel or medical benefits
are considering a company reorganisation or share buy-back
make substantial payments on account through self-assessment.
The important point is not necessarily to change anything immediately. It is to understand whether the Budget changes affect you while there is still time to plan.
Our view
For many owner-managed businesses, Autumn Budget 2026 is more significant than the headline announcements might initially suggest.
There are some positives, particularly around mileage rates, the trading allowance and business rates. But these sit alongside reduced BADR, higher taxation of property and savings income, increasing employment costs and further changes to the way businesses report and pay tax. The Government has also signalled further work around company distributions and the timing of self-assessment payments.
For business owners, the recurring theme is planning ahead.
Several important changes begin on or around 6 April 2027, making the months ahead a sensible opportunity to review business structure, remuneration, planned disposals, investment and personal tax affairs.
Speak to Welf about Budget 2026
If you are unsure how the Autumn Budget changes affect you or your business, Welf Accountants can help you understand the practical impact and identify any planning opportunities before the new rules take effect.
Whether you are running an owner-managed business, considering selling your company, managing a property portfolio or simply want to understand what the Budget means for your personal tax position, contact the Welf team today.
This article is intended as general guidance and is based on the Budget 2026 announcements published on 28 October 2026. A number of measures remain subject to legislation, consultation or further detail. Professional advice should be taken before implementing any transaction or tax-planning strategy.