Autumn Budget 2026: what it means for tradespeople and small businesses
The headline tax rates stay the same, but mileage, the trading allowance, capital allowances, landlord tax and the minimum wage all change. Here is what the 28 October Budget means for you.
The Chancellor delivered the Autumn Budget on Wednesday 28 October 2026. There is no rise in the headline rates of income tax, National Insurance or VAT, and the main rate of corporation tax stays capped at 25%. Underneath that, several changes matter to tradespeople, small companies and landlords. Unless stated otherwise, the changes below start in April 2027.
If you use your own van or car for work
- 55p a mile is now permanent. The tax-free mileage rate of 55p for the first 10,000 business miles in a car or van, introduced temporarily in April 2026, stays.
- Higher rate above 10,000 miles. The rate for miles over 10,000 rises from 25p to 35p from 6 April 2027.
- Fuel duty. The current fuel duty cut and freeze are extended to 1 July 2027.
If you claim mileage rather than actual van costs, a simple mileage log is now worth more than ever. See our guide to what tradespeople can claim.
Buying vans, tools and equipment
- First-year allowance up to 50%. For main rate plant and machinery bought on or after 1 January 2027, the first-year allowance rises from 40% to 50%.
- Writing-down allowance down to 12%. The main rate falls by two points to 12%, from 1 April 2027 for companies and 6 April 2027 for the self-employed.
- Full expensing for companies is maintained.
The timing of a larger purchase around January and April 2027 can change how quickly you get tax relief on it. Talk to us before you buy.
Sole traders and side income
- Trading allowance triples. From 6 April 2027 the trading allowance rises from £1,000 to £3,000, so small amounts of trading income up to that level will be covered by the allowance.
- Making Tax Digital. People with qualifying income over £30,000 join Making Tax Digital for Income Tax in April 2027. They will not receive penalty points for late submission of their first four quarterly updates in 2027/28. The government is also deferring the start for several other taxpayer groups until further notice.
If you are joining in April 2027, the penalty holiday gives you breathing space, but the updates still have to be done. See our Making Tax Digital service.
Landlords and savers
From 6 April 2027, income tax on property income will be 24% at the basic rate, 44% at the higher rate and 49% at the additional rate in England, Wales and Northern Ireland. The same rates will apply to savings income across the UK. That is two points higher than the 22%, 42% and 47% previously set for April 2027.
| Rate band | Property and savings income from 6 April 2027 |
|---|---|
| Basic rate | 24% |
| Higher rate | 44% |
| Additional rate | 49% |
If you let property, now is a good time to review whether personal ownership or a company still suits you.
Selling your business
The lifetime limit for Business Asset Disposal Relief, which gives a lower rate of capital gains tax when you sell a qualifying business, halves from £1 million to £500,000 from 6 April 2027. If a sale is on the horizon, the timing now matters more.
If you employ staff
The government accepted the Low Pay Commission's recommendations in full. From 1 April 2027:
| Rate | From 1 April 2027 |
|---|---|
| National Living Wage (21 and over) | £13.21 an hour |
| 18 to 20 year olds | £11.27 an hour |
| 16 and 17 year olds and eligible apprentices | £8.31 an hour |
| Accommodation offset | £11.53 a day |
Each rate rises by 3.9%. The government will also require at least 3% of the workforce on large government construction and infrastructure projects to be apprentices.
VAT and invoicing
The government has set out a roadmap towards requiring VAT e-invoicing from April 2029, with full policy and technical details promised by April 2028. Nothing changes yet, but if you still raise invoices by hand, moving to bookkeeping software now will make the switch painless.
Shops, cafés and other premises
Business rates for retail, hospitality and leisure properties are frozen so that no property in those sectors faces a real-terms increase.
The economy
The Office for Budget Responsibility expects growth of about 1¼% in 2026, slowing to 1% in 2027. It forecasts inflation peaking at around 3.8% in early 2027 and returning to the 2% target by the middle of 2028, and unemployment peaking at just above 5% in spring 2027.
What to do now
- Keep a proper mileage log if you drive your own vehicle for work.
- Plan any large equipment or van purchases with us before January 2027.
- Landlords: review your 2027/28 tax position and ownership structure.
- Employers: budget for the April 2027 wage rates in your quotes and payroll.
- Thinking of selling your business? Talk to us before April 2027.
Sources: HM Treasury, Budget 2026, and the Office for Budget Responsibility, Economic and Fiscal Outlook, October 2026. If you would like to know exactly how the Budget affects you, get in touch or call us on 01604 356987.
This article is a general guide based on the rules as we understand them at the date of publication. It is not advice for your specific circumstances. Please speak to us before acting on anything in it.
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Tell us a little about your business and we will come back to you within one working day with how we can help and what it will cost. Or speak directly to Craig, our senior partner, on 07949 534119.