Autumn Budget 2026 – What does it mean for UK businesses?

The Autumn Budget was delivered earlier today (28 October) by the Chancellor of the Exchequer, John Healey, the first major fiscal event since the new Prime Minister, Andy Burnham, took office.

The Chancellor honoured Labour’s 2024 manifesto commitments not to increase income tax, employee National Insurance, or VAT rates. Instead, he turned his focus on bank tax, Business Asset Disposal Relief, and business rates.

The Chancellor rolled out small measures, rather than sweeping changes, as businesses continue to endure rising operating costs and shocks to energy prices.

Here’s a summary of the key Autumn Budget measures that impact company directors and UK businesses.

A summary of the Autumn Budget 2026 for UK company directors

Tax and savings

• National Living Wage and National Minimum Wage –
  National Living Wage to increase to £13.21 an hour from April 2027
  National Minimum Wage for 18 – 20-year-olds to increase to £11.27
• Small Business Rates Relief - Business rates threshold to increase to £18,000 from £12,000 for retail, hospitality, and leisure businesses from April 2027. This is in addition to the 20% business rates cut for pubs
• Business Asset Disposal Relief (BADR) – The lifetime limit for Business Asset Disposal Relief on qualifying gains cut to £500,000 from £1 million from April 2027

Business Asset Disposal Relief (formerly Entrepreneurs’ Relief) is a tax relief business owners can claim (if eligible) when they sell or close their business, often via a Members’ Voluntary Liquidation (solvent liquidation). It reduces the rate of Capital Gains Tax on the sale or disposal of qualifying assets, and there is a lifetime limit on qualifying gains

• Founders’ relief – A new relief in Capital Gains Tax, founders’ relief, to offer a 10% rate on lifetime gains, up to £10 million for the most successful founders from April 2027
• Online marketplaces to account for VAT on goods sold by large UK sellers - Online marketplaces must collect and pay VAT to HMRC on behalf of large UK sellers to level the playing field between online marketplaces and high street shops. Online marketplaces currently do this on behalf of most overseas sellers
• Bank tax – Banks to pay an additional three percentage points on the bank surcharge from January 2027 for 15 months, up from 3% to 6%
• Fuel duty – Fuel duty freeze extended to July 2027
• Alcohol duty - £10 million in alcohol duty relief for pubs and hospitality businesses 
• Tax-free cash ISA limit – The limit will remain at £20,000
• First Time Buyer ISA – To replace Lifetime ISA (LISA)
• ‘Your First home’ scheme – The programme gives first-time buyers a 20% equity loan to buy a new-build home, interest-free for a limited period, and requires a minimum 2.5% deposit
• Self-employed paternity leave - Parental pay extended to self-employed fathers

Energy

• Gas bills - Gas standing charges scrapped for households from next year
• Electricity bills - VAT on electricity bills suspended until July 2027 (extended from 31 March 2027)
• Council tax – £100 energy payment for households in tax bands A to D
• Mileage rates – Tax-free mileage rates to increase

Sectors

Food – Tariffs to be removed from everyday products, such as beans and chocolate

Gambling - Machine game duty to increase from 20% to 25% for higher stakes machines, except pubs and seaside arcades

Vape shops - Vape shops and adult gaming centres will be excluded from certain business rates reliefs

Housing - All land sold for social housing will be VAT-free

Construction - No major changes to building regulation will be allowed, except where health and safety is concerned. Biodiversity regulations to be removed for brownfield sites