- Corporation Tax stays at 25%, with the 19% small profits rate unchanged
- The BADR lifetime limit halves to £500,000 from 6 April 2027
- Most business changes start in April 2027, so you’ve got time to plan
The autumn budget impact on business owners this year is targeted, not sweeping: Corporation Tax, income tax, National Insurance, VAT and dividend tax rates all stay put. The changes land in reliefs, allowances and reporting, and a limited company accountant can map each one to your numbers.
This guide covers every Autumn Budget 2026 measure that affects UK companies, with the dates.
What did the Autumn Budget 2026 change for business owners?
Chancellor John Healey delivered the Budget on 28 October 2026. HM Treasury’s Budget summary says it rejects broad-based tax rises, so the changes sit in reliefs, wages and how tax is reported and paid.
Here are the measures most likely to touch a UK company, with start dates from the Budget 2026 overview of tax legislation and rates.
| Measure | Who it affects | When it starts |
|---|---|---|
| Corporation Tax held at 25% main rate and 19% small profits rate | Limited companies | Confirmed to 31 March 2029 |
| Main rate first-year allowance rises from 40% to 50% | Businesses buying plant and machinery | 1 January 2027 |
| National Living Wage rises to £13.21 an hour | Employers | 1 April 2027 |
| Main rate writing-down allowance falls to 12% | Businesses with main pool balances | 1 April 2027 (6 April for income tax) |
| Small Business Rates Relief threshold rises to £18,000 | Retail, hospitality and leisure in England | 1 April 2027 |
| Business Asset Disposal Relief lifetime limit cut to £500,000 | Owners selling a business | 6 April 2027 |
| Founders’ Relief: 10% CGT on up to £10m of gains | Founders of high-growth companies | 6 April 2027 |
| Company cars, vans, fuel and medical benefits move onto payroll | Employers providing benefits | 6 April 2027 |
| Trading allowance rises from £1,000 to £3,000 | Sole traders and side businesses | 6 April 2027 |
| Online marketplaces collect VAT on UK sellers’ sales | Businesses selling through marketplaces | October 2027 |
| E-invoicing and Direct Debit for VAT and PAYE | VAT-registered businesses and employers | April 2029 |
How does the Budget affect limited company directors?
For most directors, the day-to-day tax position barely moves. The bigger story is what didn’t change, and where frozen thresholds keep pushing your bill up quietly.
Corporation Tax rates stay the same
The main rate stays at 25% and the small profits rate at 19%, now confirmed for the financial year starting 1 April 2028. The government also restated its Corporate Tax Roadmap commitments, so you can plan investment on today’s Corporation Tax rate.
Dividend tax rates don’t change
No change to dividend tax was announced, so the rates stay at 10.75% basic, 35.75% higher and 39.35% additional. Our guide to tax on dividends shows how those bands apply to your drawings.
Income tax thresholds remain frozen until April 2031, and most National Insurance thresholds stay frozen until 2030-31. That freeze is why it’s worth reviewing how you pay yourself from a limited company each year.
Savings and property income tax rises again
From 6 April 2027, income tax on savings and property income rises to 24% basic, 44% higher and 49% additional. That hits directors who hold cash savings or rental property personally, outside the company.
Profit extraction rules are being rewritten
The government will modernise the rules on company distributions to stop complex arrangements that extract profits at lower tax rates. Draft legislation follows in 2027, with the changes taking effect from April 2028.
What changes for founders planning to sell their business?
This is the area with the most movement. One relief gets smaller, and a new one arrives for a narrower group of founders.
The business asset disposal relief limit halves
The lifetime limit for business asset disposal relief falls from £1m to £500,000 for disposals on or after 6 April 2027. BADR gives an 18% Capital Gains Tax rate instead of the 24% higher rate, so the maximum saving drops from £60,000 to £30,000.
Here’s how that plays out on a £1m qualifying gain (ignoring the annual exempt amount):
- Sale before 6 April 2027: the full £1m is taxed at 18%, giving a bill of £180,000.
- Sale on or after 6 April 2027: £500,000 at 18% plus £500,000 at 24%, giving a bill of £210,000.
Our guide to Business Asset Disposal Relief explains the qualifying conditions.
What is founders’ relief?
Founders’ relief is a new 10% Capital Gains Tax rate on up to £10m of lifetime gains for founders and early investors in high-growth, innovative companies. It applies to qualifying share disposals from 6 April 2027.
The detailed qualifying rules are out for technical consultation until 30 November 2026, as set out in HMRC’s Budget 2026 tax policy overview. The government will then add the relief to Finance Bill 2026-27.
Which relief will apply to your exit?
Most owners of smaller companies will still rely on business asset disposal relief. Founders’ relief targets scale-ups, so check the final rules before you plan an exit around it.
What’s in the Budget for growing companies?
Several measures make it easier to invest, hire and claim support as you scale. None of them are headline-grabbing, but they add up for an ambitious company.
Capital allowances shift
The main rate first-year allowance rises from 40% to 50% for spending from 1 January 2027. The main rate writing-down allowance falls from 14% to 12% from 1 April 2027 for companies.
Companies can still use full expensing and the £1m Annual Investment Allowance on most new plant and machinery. The lower writing-down rate mainly slows relief on assets already in your main pool.
Share option schemes get more generous
From 6 April 2027, the Company Share Option Plan (CSOP) and Enterprise Management Incentives (EMI) both improve:
- The CSOP individual option limit doubles from £60,000 to £120,000.
- The CSOP exercise period extends to 15 years.
- CSOP and EMI limits no longer count against each other.
- The EMI exercise window after a disqualifying event extends to 180 days.
- EMI grants are reported through the end-of-year return instead of a separate notification.
R&D claims get simpler
The Claim Notification Form is scrapped for R&D claims made on or after 1 April 2027. The Additional Information Form will be simplified from autumn 2027, which cuts admin if you’re claiming R&D tax credits.
Hiring talent gets easier
The government will legislate so non-compete clauses don’t block hiring at startups and scaling firms, with detail due in early 2027. It’s also widening the High Potential Individual visa and changing skilled worker salary rules.
What do employers need to know?
If you run payroll, three changes need action before April 2027. Wages rise, benefits move onto payroll and mileage rates change.
The national living wage rises to £13.21
The national living wage goes up 3.9% to £13.21 an hour from 1 April 2027. That’s about £910 a year more for a full-time worker, so build it into your cost forecasts and payroll for limited companies.
Benefits in kind move onto payroll
Employers must payroll company cars, vans, car and van fuel and medical benefits through RTI from 6 April 2027. Most other benefits follow from 6 April 2028, except employment-related loans and living accommodation.
That replaces end-of-year P11D forms for those benefits. Separately, company car tax rates rise by 1 percentage point in 2030-31.
National Insurance thresholds and mileage rates
The Lower Earnings Limit rises to £6,916 for 2027-28, while the other National Insurance thresholds stay frozen until 2030-31. Employer rates are unchanged.
Approved mileage rates for business miles above 10,000 a year rise from 25p to 35p from 6 April 2027. The government has also made the higher rate for the first 10,000 miles permanent.
Which VAT and reporting changes are coming?
These start later, but they’ll change your systems. Getting your software ready early avoids a scramble.
Online marketplaces will collect VAT
From October 2027, online marketplaces become responsible for VAT on sales by UK VAT-registered businesses, and other UK businesses selling over £90,000 a year per platform. Business-to-business, second-hand and personal sales are excluded.
If you sell through Amazon, eBay or similar, it’ll change how you reconcile marketplace fees and payouts.
The VAT reverse charge narrows
From April 2027, the reverse charge on services from overseas only applies if the UK customer is VAT-registered. Overseas suppliers will charge UK VAT to businesses that aren’t registered, so check your VAT reverse charge treatment.
E-invoicing and Direct Debit from April 2029
VAT invoices will need to be issued and received in a prescribed electronic format from April 2029. From the same date, you’ll need a Direct Debit instruction in place for VAT and PAYE return liabilities.
A consultation on digital reporting runs until 20 January 2027. It builds on Making Tax Digital for VAT, so compatible software matters.
HMRC gets new correction powers
From 1 April 2028, you’ll have a legal duty to correct inaccurate returns once you spot an error. HMRC can also issue a Customer Correction Notice asking you to check and fix your figures.
What changes for retail, hospitality and leisure businesses?
In England, the Small Business Rates Relief threshold for retail, hospitality and leisure properties rises from £12,000 to £18,000 from April 2027. The government says that takes around 70,000 more businesses out of business rates.
All retail, hospitality and leisure properties also get a two-year real-terms freeze on their bills. Vape shops and adult gaming centres lose access to certain reliefs, and Scotland, Wales and Northern Ireland set their own rules.
What changes for sole traders and side businesses?
Limited companies aren’t affected here, but founders running a side business alongside their company should take note.
The trading allowance triples
The trading allowance rises from £1,000 to £3,000 from 6 April 2027. If your trading income stays under £3,000, you won’t need to report it through Self Assessment.
Making Tax Digital penalty easement
Making Tax Digital for Income Tax extends to self-employed people and landlords with income over £30,000 from April 2027. Those joining then won’t get late submission penalty points for quarterly updates in 2027-28.
What should you do before April 2027?
Most measures start in five months, which gives you time to plan for growth rather than react:
- Model your 2027-28 salary and dividend mix against the frozen thresholds.
- If an exit is on the horizon, review your timing against the business asset disposal relief cut.
- Check whether founders’ relief could apply and respond to the consultation by 30 November 2026.
- Budget for the £13.21 national living wage from 1 April 2027.
- Set up payroll to handle company car, van, fuel and medical benefits from 6 April 2027.
- Time large equipment purchases around the 50% first-year allowance and the lower writing-down rate.
- If you sell on marketplaces, prepare your VAT reconciliation for October 2027.
How Sleek helps with the autumn budget impact on business owners
Sleek gives every client a named, qualified accountant who looks at your numbers, not just the headlines. We model the Autumn Budget 2026 changes against your salary, dividends, payroll and exit plans, and reply to your questions the same day.
Every Sleek UK accounting plan covers a business asset disposal relief claim on request. You get bookkeeping, payroll, VAT and Corporation Tax in one relationship, so nothing falls between providers.
Plan your Budget changes with a Sleek accountant.
FAQs on autumn budget impact on business owners
Did the Budget change the VAT registration threshold?
No. No change was announced, so the VAT threshold stays at £90,000 of taxable turnover.
Can I keep the £1m BADR limit if I agree a sale before 6 April 2027?
Possibly. Special rules apply to contracts entered into before 6 April 2027 that haven’t completed by then, so take advice on the timing of your exchange and completion.
Will Corporation Tax filing change after the Budget?
Amended Company Tax Returns must be filed online from 1 April 2028. HMRC has also opened a call for evidence on modernising Corporation Tax filing, including the use of AI and automation.
How will Self Assessment payments on account change?
From April 2029, taxpayers who make payments on account will pay more regularly during the year. Payments will be automated, and you’ll be able to pay through PAYE, which affects your director’s tax return planning.
Can my company pay a sponsored worker's visa costs tax-free?
Yes. From 28 October 2026, an employer’s payment of the certificate of sponsorship fee and the Immigration Skills Charge is exempt from income tax for the worker.
Are business travel subsistence rates changing?
Yes, from 6 April 2028. The benchmark scale rates rise to £20 for trips over 5 hours, £60 over 10 hours and £75 over 24 hours, and overseas rates move to a simpler tiered system.
Do the higher property income tax rates apply to property held in a limited company?
No. The 24%, 44% and 49% property rates are income tax rates for individuals, so companies keep paying Corporation Tax on rental profits. Our guide to buying property through a limited company covers the trade-offs.
