Tax notes|Budget 2026
Budget 2026: key points at a glance for business owners
The 28 October 2026 Budget halved Business Asset Disposal Relief to £500,000, brought in a new 10% Founders' Relief, and raised tax on property and savings income to 24%, 44% and 49% from April 2027.
By Simon Jacobs
Chartered Tax Adviser (CTA · ACA), SRJ International ·
Simon is a Chartered Tax Adviser (CTA · ACA) and PwC trained, founder of SRJ International. He advises UK business owners on tax, profit extraction and exit. Read his full profile →
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I'm sure you were all as excited as I was about the Budget that just took place.
The Budget today lands hardest on business owners planning to sell, landlords, savers, and anyone paying tax through Self Assessment. Most changes are effective 6th April 2027, and here are the key points and numbers.
Business owners and founders
The lifetime limit on Business Asset Disposal Relief is being cut from £1,000,000 to £500,000 for disposals made on or after 6 April 2027. If you're planning to sell, that date is now the one to watch.
Selling your business? Read what the BADR cut means for you →
- BADR - lifetime limit is cut from £1m to £500,000
- New Founders' Relief - 10% CGT rate on lifetime gains of up to £10m for business founders
- EMI 2 - new share scheme for private companies to give key staff equity tax-efficiently
- Young entrepreneurs allowance - covers a year of living costs for young founders while they develop their businesses.
- Capital allowances - main-rate first-year allowance rises from 40% to 50%, and the main writing-down allowance falls from 14% to 12%.
- Online marketplaces will now be required to account for VAT on third-party sales.
- Business rates relief threshold rises from £12k to £18k
Personal
From April 2027, property income is taxed at 24%, 44% and 49%, and savings income at the same rates. If you have a rental property or savings, this one hits you directly.
- Property income and savings - rates up by a further 2% to 24%, 44% and 49% from April 2027.
- Cash ISAs - kept at £20k with the £12k limit being scrapped (or at least postponed).
- New Starter ISA for first-time investors.
- Regular self assessment payments rather than one at the end of the year from 2029.
- Mileage rates - 55p rate for the first 10,000 business miles is locked in and the rate above 10,000 miles rises from 25p to 35p.
- State Pension - From 2030 will rise by the higher of inflation or 2.5%
- Paternity leave - self-employed fathers will now be entitled to it
- Trading allowance increases from £1,000 to £3,000
Everything else
The National Living Wage goes up to £13.21 an hour, and the 18-20 rate to £11.27. If you employ staff, your wage bill goes up with it.
Source: HM Treasury on X
- HMRC get new powers to collect tax
- National minimum and living wages increase by 3.9%
- 5p fuel duty freeze continuing until July 2027
- New overnight visitor levy to be issued by mayors
The key numbers
The main rate first-year allowance goes up to 50% for spending from 1 January 2027, and the main writing-down allowance drops to 12%. Here's everything side by side, with the date each change starts.
| Measure | Before | After | From |
|---|---|---|---|
| Business Asset Disposal Relief lifetime limit | £1,000,000 | £500,000 | Disposals on or after 6 April 2027 |
| Property income tax rates | 22%, 42%, 47% (already announced) | 24%, 44%, 49% | 6 April 2027 |
| Savings income tax rates | 22%, 42%, 47% (already announced) | 24%, 44%, 49% | 6 April 2027 |
| Trading allowance | £1,000 | £3,000 | 6 April 2027 |
| Approved mileage rate above 10,000 business miles | 25p | 35p | 6 April 2027 |
| Main rate first-year allowance | 40% | 50% | Spending on or after 1 January 2027 |
| Main rate writing-down allowance | 14% | 12% | April 2027 |
| Cash ISA limit (over 18s) | £20,000 | £20,000 | Kept from April 2027 |
| Fuel duty 5p cut | Ends 1 January 2027 | Ends 30 June 2027 | Extended |
| Self Assessment payments on account | Twice a year | More regular in-year payments | April 2029 |
Source: HM Treasury, Budget 2026 Overview of Tax Legislation and Rates
Your questions answered
If you make payments on account, you'll be paying towards your tax bill more regularly from April 2029. These are the questions I'm getting most today.
What did the 2026 Budget do to Business Asset Disposal Relief?
It halved the lifetime limit from £1 million to £500,000 of qualifying gains, for disposals made on or after 6 April 2027. The 18% rate on gains within the limit is unchanged. Earlier BADR claims count towards the lifetime limit, and there are special rules for contracts signed before 6 April 2027 that complete after it.
What is the new Founders' Relief?
A new capital gains tax relief announced in the 28 October 2026 Budget, giving a 10% rate on up to £10 million of lifetime gains for qualifying founders, for share disposals from 6 April 2027. It is aimed at founders of high-growth companies and is under consultation until 30 November 2026, so the qualifying conditions are not final.
What are the new tax rates on property and savings income?
From 6 April 2027, property income is taxed at 24% (basic rate), 44% (higher rate) and 49% (additional rate), and savings income at the same rates in England, Wales and Northern Ireland. That is a further 2 percentage points on top of the increase already announced.
Is the trading allowance going up?
Yes. The trading allowance rises from £1,000 to £3,000 from 6 April 2027, and the Self Assessment reporting threshold for trading income moves to £3,000 with it.
Will Self Assessment payments become monthly?
From April 2029, people who make payments on account will make more regular in-year payments, with an option to pay through PAYE. The exact frequency has not been confirmed.
What happened to mileage rates?
The 55p per mile rate for the first 10,000 business miles stays, and the rate for business miles above 10,000 rises from 25p to 35p from 6 April 2027.
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