Autumn Budget 2026: what it actually means for small businesses and directors
The Chancellor delivered the Autumn Budget on Wednesday 28 October 2026, and it contained around 70 separate measures. Most of the coverage has focused on the big political numbers. This guide does something different: it picks out what actually changes for a small business, a landlord or an owner-managed company in Leeds and West Yorkshire, and when. Over the coming weeks we will publish a detailed post on each of the measures below.
The headline for business owners
If you own a company you might one day sell, the single biggest change is to Business Asset Disposal Relief. The lifetime limit halves from £1 million to £500,000 from 6 April 2027, on top of the rate having already risen from 10% to 18%. A new Founders' Relief offers a 10% rate on up to £10 million of gains, but the conditions are so demanding that very few owner-managed businesses will qualify. We cover both in detail in our BADR and Founders' Relief post.
If you buy equipment, vans or machinery, the main pool writing down allowance drops again to 12% from April 2027. The Annual Investment Allowance stays at £1 million and full expensing continues, so most small businesses will still get full relief up front — but anything that lands in the main pool now takes longer to write off. See capital allowances after the Budget.
For the self-employed and side-hustlers
The trading allowance rises from £1,000 to £3,000 from 6 April 2027. Thousands of people with small side incomes will fall out of self assessment altogether. The Class 2 small profits threshold rises to £7,355, with voluntary Class 2 at £3.80 a week below that to protect state pension entitlement. Class 4 is untouched.
Making Tax Digital rolls on, but with a softening: anyone joining in April 2027 gets a year without late-submission penalty points on quarterly updates. The 2026 cohort will be in the points regime from April 2027. There are also new permanent exemptions. Full detail in MTD penalties and exemptions.
For employers
The National Living Wage goes to £13.21 from 1 April 2027, a 3.9% increase with no extra uplift for younger workers this time. Mandatory payrolling of benefits in kind is confirmed in two stages: cars, vans, fuel and medical benefits from April 2027, everything else bar living accommodation and beneficial loans from April 2028. The 55p mileage rate is now permanent and the over-10,000-mile rate rises to 35p from April 2027. Benchmark subsistence rates jump from April 2028 (£20, £60 and £75 for the three tiers).
For landlords and savers
From 6 April 2027 savings income and property income will be taxed at 4 percentage points above the normal rates: 24%, 44% and 49%. That doubles the 2-point surcharge announced last year. For a higher-rate landlord with £10,000 of net rental profit, that is £400 a year more than today. Our savings and property income post runs through the numbers.
Thresholds and the personal allowance stay frozen to April 2031. The cash ISA cut to £12,000 has been cancelled. A new pension tax allowance for state pensioners arrives in April 2027 — well-meant, but with an effective marginal rate of around 53% in a narrow band.
Tax administration — the slow-burn changes
Three things will change how you pay tax, all from April 2029: self assessment payments on account are replaced by smaller, more regular in-year payments; direct debit becomes the default collection method for PAYE and VAT; and e-invoicing becomes mandatory for VAT-registered businesses dealing with other VAT-registered businesses. HMRC also gets 670 extra compliance staff, a wider power to collect smaller debts directly from bank accounts, and a much bigger flow of third-party data from 2028.
The one piece of unambiguously good news for owner-managed companies is that the proposed transactions with participators reporting regime has been dropped — for now. The paused Companies House profit and loss filing requirement for small and micro companies is also welcome relief; software-only filing from April 2028 still goes ahead, which we covered in our annual accounts filing guide.
What to do now
Two decisions are genuinely time-sensitive. If a business sale is on the horizon, the window before 6 April 2027 matters for BADR — but anti-forestalling rules will catch artificial arrangements, so take advice rather than rushing. If you are planning significant plant or machinery spend, understand whether it will fall under AIA or into the main pool before you commit. Everything else is 2027/28 planning, and we will be building it into our year-end conversations with clients.
If you run a business in Garforth, Leeds or anywhere in West Yorkshire and want to know what the Budget means for your numbers rather than the national ones, book a free call and we will walk through it with you.
This is general information, not advice for your circumstances. If you'd like it applied to your situation, get in touch — the first chat is free.
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