Autumn Budget 2026 · 28 October 2026
Autumn Budget 2026: what it means for limited company directors and small businesses
The headline is stability. No change to tax on salary or dividends, and Corporation Tax stays where it is. But there are changes that matter if you sell online, employ staff or are thinking about selling your business.
Priyan Patel ACCA
Founder, Growth Ledger
At a glance
The Autumn Budget 2026 in two lists
What stays the same
- Income tax, employee National Insurance and VAT rates
- Tax on salary and dividends, so the way most directors pay themselves stays the same
- Corporation Tax at 25%, and 19% for smaller profits
- Full expensing and the Annual Investment Allowance
- Capital Gains Tax rates
What is changing
- Amazon, eBay, TikTok Shop and other marketplaces will collect VAT on behalf of their sellers
- Business Asset Disposal Relief lifetime limit halves to £500,000 from April 2027
- National Living Wage and National Minimum Wage up 3.9%
- HMRC gets more funding and stronger powers to collect overdue tax
- Higher mileage rate rises from 25p to 35p a mile
Key numbers
The figures directors are asking about
25%
Main Corporation Tax rate
Unchanged
10.75%
Basic rate dividend tax
Unchanged
£500k
BADR lifetime limit
Down from £1m, April 2027
3.9%
Minimum wage increase
About £13.20 an hour for over-21s
£90k
Marketplace VAT threshold
Reported, detail to follow
35p
Mileage above 10,000 miles
Up from 25p
Directors
Dividend tax and director pay: no change
The biggest relief for directors is what the Autumn Budget 2026 did not do. There had been speculation about further rises to dividend tax, but the Chancellor confirmed no change to tax on dividend or employment income.
The dividend rates that took effect in April 2026, 10.75% at the basic rate and 35.75% at the higher rate, stay in place. Income tax thresholds remain frozen until April 2031, so more of your income drifts into higher bands each year as pay rises.
For most directors, a low salary topped up with dividends is still the most tax-efficient way to take money out of the company. Our guide to salary vs dividends for directors explains how the mix works. The right answer still depends on your profits, other income and family position, so check it each year rather than repeating last year's plan.
Online sellers
VAT on online marketplaces: the big change for sellers
Amazon, eBay, TikTok Shop, Etsy and other online marketplaces will take the VAT out of your sales before they pay you, and hand it to HMRC themselves. Early reports point to October 2027, for sellers over £90,000. The biggest effect is on your cash flow: today the VAT passes through your bank account and sits there for weeks before your return is due. After the change, it never arrives.
Worked example
A seller with £36,000 a month of marketplace sales, including VAT
Today
After the change
VAT inside your monthly sales
Today: £6,000, paid out to you with the rest of your payout
After: £6,000, kept back by the platform before you are paid
When the VAT leaves your account
Today: Once a quarter, about five weeks after the quarter ends
After: It never reaches your account
Most VAT in your account at once
Today: Up to £24,000 (three months plus the month to pay)
After: £0
What it means for your business
Less cash in the bank
Most sellers use the VAT sitting in their account to pay for stock and ads between returns, often without realising it. That buffer goes.
Stock may need funding another way
With smaller payouts, a big reorder could mean using an overdraft or platform lending, or buying smaller and more often.
You could end up waiting for HMRC
If the platform takes the VAT on your sales but you still pay VAT on stock and fees, your return could show a refund, and you wait for HMRC to pay it.
Selling less than £90,000 a year? Based on what has been reported so far, nothing changes for you. HMRC has not yet published the detail, and we will update this page when it does.
Sell on Amazon, eBay, TikTok Shop or Shopify? See how we handle marketplace payouts and VAT.
Selling your business
Business Asset Disposal Relief cut to £500,000
Business Asset Disposal Relief, formerly Entrepreneurs' Relief, lets owners pay 18% Capital Gains Tax when they sell a qualifying business. From April 2027 the lifetime limit halves from £1 million of gains to £500,000. Gains above the limit are taxed at normal Capital Gains Tax rates, 24% for higher rate taxpayers.
The government says three in four claimants will not be affected. Capital Gains Tax rates themselves were not increased, and the Chancellor rejected calls to align them with income tax.
There is also a new Founders' Relief: a 10% Capital Gains Tax rate on up to £10 million of lifetime gains for founders of high-growth companies. The qualifying conditions are subject to consultation.
Up to £30,000 more tax on a £1m gain
If a sale is possible in the next 18 months, speak to us now. Timing a disposal before April 2027 could make a material difference.
Employers
Minimum wage and employment costs
The National Living Wage for workers aged 21 and over rises 3.9%, from £12.71 to around £13.20 an hour. The rate for 18 to 20 year olds rises from £10.85 to around £11.27. Increases normally take effect from April.
Build the rise into your forecasts now, and remember that a pay rise also increases employer National Insurance and auto-enrolment pension contributions.
Also in the Budget
Other changes for small businesses
Corporation Tax and capital allowances
Rates are unchanged, and full expensing and the Annual Investment Allowance stay. The main first-year allowance rises from 40% to 50% and the main writing-down allowance falls from 14% to 12%. Most small companies are already covered by the Annual Investment Allowance, so day to day little changes.
Business rates
Small Business Rate Relief for retail, hospitality and leisure now covers rateable values up to £18,000, up from £12,000, taking around 70,000 businesses out of rates. Other businesses see rates frozen in real terms for two years.
Mileage rates
The 55p rate for the first 10,000 business miles stays, and the rate above 10,000 miles rises from 25p to 35p. Good news for directors who cover high mileage in their own car.
Trading allowance
The amount of side income you can earn before declaring it triples from £1,000 to £3,000, helping people test a new venture before setting up properly.
HMRC enforcement
HMRC is getting more funding and stronger powers to collect overdue tax. If you have unfiled returns or tax outstanding, putting it right voluntarily is always treated better than being found out.
Self Assessment payments
From 2029, Self Assessment moves to smaller, more regular payments instead of two large payments on account. This sits alongside the rollout of Making Tax Digital for Income Tax.
Reporting your income quarterly soon? Read our guide to Making Tax Digital for Income Tax.
For you personally
What the Autumn Budget 2026 means for you and your household
Beyond the business: pensions, energy support, savings and the rest of the changes that land in your own bank account.
Pensions
- If the full new State Pension is your only income, you will pay no income tax on it for the rest of this parliament.
- Unused pension pots still come into your estate for Inheritance Tax from April 2027, as already planned. Worth reviewing your will and pension nominations.
Energy bills
- A £100 Household Energy Payment for around 20 million homes in council tax bands A to D this winter, paid straight into bank accounts.
- The VAT cut on household electricity is extended to July, worth about £50 off the price cap.
- Gas standing charges are scrapped from next year. They average £108 a year.
Savings and ISAs
- The cash ISA limit stays at £20,000 a year. The planned cut has been dropped.
- Tax on savings and property income rises by 2 percentage points from April 2027, as already planned. Holding savings in an ISA matters more.
- A new Starter ISA is planned for first-time investors.
Buying a home
- The Lifetime ISA is being replaced by a new First Time Buyer ISA.
- A government-backed first-time buyer scheme with £4.7bn of lending starts in the spring.
Driving
- The 5p fuel duty cut is extended to July.
- If you claim business mileage, the rate above 10,000 miles a year rises from 25p to 35p.
Family and carers
- Self-employed fathers and partners become eligible for paid parental leave for the first time.
- The Carer's Allowance earnings cliff edge is removed, so earning slightly over the limit no longer means losing the whole allowance.
- Income tax thresholds stay frozen until April 2031, so pay rises pull more income into higher bands.
Key dates
When the changes land
28 October 2026
Autumn Budget delivered. No change to dividend, salary or Corporation Tax rates.
Winter 2026/27
£100 Household Energy Payment for homes in council tax bands A to D.
April 2027
Business Asset Disposal Relief limit falls to £500,000. Minimum wage rises take effect. Property and savings income tax up 2 points. Unused pensions come into Inheritance Tax.
July 2027
The extended 5p fuel duty cut and the VAT cut on household electricity are due to end.
October 2027
Reported start date for Amazon, eBay, TikTok Shop and other marketplaces collecting VAT for UK sellers. HMRC detail still to be published.
2029
Self Assessment moves to smaller, more regular payments.
What to do next
Three groups who should act now
For most owner-managed businesses, the Autumn Budget 2026 does not demand immediate action. These are the exceptions.
Marketplace sellers
Look at how your VAT and cash flow will change once platforms collect VAT for you, and make sure your settlement records are clean by channel.
Owners planning a sale
If a sale is possible in the next 18 months, talk to us now. Completing before April 2027 could save up to £30,000 in Capital Gains Tax.
Employers
Budget for the minimum wage rise and the knock-on employer National Insurance and pension costs from April.
Questions
Autumn Budget 2026 FAQs
When was the Autumn Budget 2026?
Chancellor John Healey delivered the Autumn Budget on Wednesday 28 October 2026. The Office for Budget Responsibility published its forecast the same day.
Did dividend tax change in the Autumn Budget 2026?
No. The Chancellor confirmed there is no change to tax on dividends or employment income. The rates that took effect in April 2026, 10.75% at the basic rate and 35.75% at the higher rate, stay in place.
Is Corporation Tax going up?
No. Corporation Tax stays at 25% for profits over £250,000 and 19% for profits under £50,000, with marginal relief in between. Full expensing and the Annual Investment Allowance are kept.
What happened to Business Asset Disposal Relief?
The lifetime limit falls from £1 million of gains to £500,000 from April 2027. Gains within the limit are still taxed at 18%. Gains above it are taxed at normal Capital Gains Tax rates, 24% for higher rate taxpayers. On a gain of £1 million or more, that is up to £30,000 of extra tax.
Will Amazon, eBay and TikTok Shop collect VAT for me?
The Chancellor announced that online marketplaces, including Amazon, eBay, TikTok Shop, Etsy, Temu and Shein, will become responsible for collecting VAT on behalf of UK sellers. They will keep the VAT back from your payouts, so less cash reaches your bank and you lose the VAT you currently hold between returns. Reports point to a start date of October 2027 and a £90,000 sales threshold, but HMRC has not yet published the detail. We will update this page when it does.
What did the Autumn Budget 2026 mean for pensions?
Pensioners whose only income is the full new State Pension will pay no income tax on it for the rest of this parliament. Unused pension pots still come into estates for Inheritance Tax from April 2027, as already planned.
Will I get the £100 energy payment?
The £100 Household Energy Payment goes to around 20 million households in council tax bands A to D this winter and is paid into bank accounts. The VAT cut on household electricity is also extended to July, and gas standing charges are scrapped from next year.
What is the new National Living Wage?
The National Living Wage for workers aged 21 and over rises 3.9%, from £12.71 to around £13.20 an hour. The rate for 18 to 20 year olds rises from £10.85 to around £11.27. Increases normally take effect from April.
Do I need to do anything now?
For most owner-managed businesses, no. The exceptions are marketplace sellers, owners who may sell their business before April 2027, and employers budgeting for next year. If you are in one of those groups, it is worth a conversation now.
What does the Budget mean for your business?
Talk to a dedicated accountant about your numbers. One fixed monthly fee, tax efficiencies flagged in-year.