Autumn Budget 2026: what it means for company directors

The Chancellor, John Healey, delivered the Autumn Budget on Wednesday 28 October 2026. For most company directors the headline is reassuring: there is no increase to the rates of Income Tax, National Insurance or VAT, and no change to dividend tax or Corporation Tax rates. The changes that matter are narrower, and most start on 6 April 2027, which leaves time to plan. Every figure below is taken from the Budget 2026 document published by HM Treasury.

What changed, and what did not

Area	What the Budget did	When
Income Tax, National Insurance and VAT rates	No change	–
Dividend tax	No change: 10.75%, 35.75% and 39.35%, with a £500 allowance	–
Corporation Tax	No change: main rate kept at 25%	–
Business Asset Disposal Relief	Lifetime limit cut from £1 million to £500,000	Sales from 6 April 2027
Tax on savings interest	Rates rise to 24%, 44% and 49%	6 April 2027
Tax-free mileage	55p a mile for the first 10,000 miles; 35p above that	55p from 6 April 2026; 35p from 6 April 2027
Trading allowance (tax-free side income)	Raised from £1,000 to £3,000 a year	6 April 2027
Capital allowances	Main writing down allowance cut from 14% to 12%; first-year allowance raised from 40% to 50%	12% from 1 April 2027 for companies; 50% for spending from 1 January 2027
Online marketplaces	Marketplaces collect VAT for UK sellers with over £90,000 of sales on that platform	1 October 2027
Payments on account	Smaller, more regular payments through the year	April 2029 (exact date not yet set)

1. Your pay: salary and dividends

The Budget made no change to how a director's salary or dividends are taxed. The Personal Allowance (the amount of income you can receive tax-free) stays at £12,570, and the higher rate threshold stays at £50,270, as both were already frozen until April 2031. Dividends above the £500 dividend allowance are still taxed at 10.75% in the basic rate band, 35.75% in the higher rate band and 39.35% in the additional rate band.

So for the usual approach of a £12,570 salary topped up with dividends, your personal tax for 2027/28 will be the same as for 2026/27 on the same income. Our director take-home calculator still gives the right answer.

2. Your company: Corporation Tax and employer costs

The Budget keeps the main rate of Corporation Tax capped at 25%, in line with the government's Corporate Tax Roadmap, its commitment to keep the main business taxes stable. No other change to Corporation Tax rates was announced, so the 19% small profits rate for profits up to £50,000, and marginal relief between £50,000 and £250,000, carry on as now. There was also no increase to the rates of National Insurance.

From 1 April 2027, the National Living Wage rises by 3.9% to £13.21 an hour, and the rate for 18 to 20-year-olds rises by 3.9% to £11.27 an hour. If you employ staff on these rates, build the increase into next year's payroll budget.

On equipment, the main rate first-year allowance rises from 40% to 50% for spending from 1 January 2027, and the main writing down allowance (the share of the remaining cost of equipment a business can deduct each year) falls from 14% to 12% from 1 April 2027 for companies. For most limited companies this makes little difference: the Annual Investment Allowance, which lets a company deduct up to £1 million a year of qualifying equipment in full, is unchanged.

3. Selling your company: Business Asset Disposal Relief

This is the biggest change for directors. Business Asset Disposal Relief reduces Capital Gains Tax on selling a qualifying business to 18%, instead of the normal 24% for higher rate taxpayers. The lifetime limit of gains that can get the relief falls from £1 million to £500,000 for sales made from 6 April 2027.

For example, a higher rate taxpayer sells their company for a gain of £800,000, with no relief used before:

Step	Sold before 6 April 2027 (£1 million limit)	Sold from 6 April 2027 (£500,000 limit)
Gain taxed at 18%	All of it: £800,000	Up to the limit: £500,000
Tax at 18%	£800,000 × 18% = £144,000	£500,000 × 18% = £90,000
Gain above the limit	None	£800,000 − £500,000 = £300,000
Tax at 24%	£0	£300,000 × 24% = £72,000
Total tax	£144,000	£90,000 + £72,000 = £162,000

Selling from 6 April 2027 costs £162,000 − £144,000 = £18,000 more. Another way to see it: the £300,000 above the new limit is now taxed at 24% instead of 18%, and £300,000 × (24% − 18%) = £300,000 × 6% = £18,000. For a higher rate taxpayer, the most the change can cost is on the £500,000 between the old and new limits: £500,000 × 6% = £30,000.

These figures leave out the £3,000 tax-free allowance for capital gains. The government says three-quarters of people who claim the relief will still get it on their whole gain. If a sale above £500,000 is already in progress, the timing of completion now matters, so take advice before you agree dates.

The Budget also announced a new Founders' Relief from 6 April 2027: a 10% Capital Gains Tax rate on up to £10 million of lifetime gains for qualifying founders of high-growth, innovative companies. The detail is still being consulted on, and it is aimed at a narrow group of companies, so most owner-managed businesses should plan on Business Asset Disposal Relief.

4. Your savings, mileage and share schemes

Savings interest. If you hold cash savings personally, outside an ISA, the tax on the interest rises from 6 April 2027. Budget 2025 had already added 2 percentage points from that date, and this Budget adds 2 more, so 20%, 40% and 45% become 24%, 44% and 49%. For example, a higher rate taxpayer earning £10,000 of interest, with the £500 Personal Savings Allowance (the interest a higher rate taxpayer can earn tax-free):

• Interest taxed: £10,000 − £500 = £9,500.
• In 2026/27: £9,500 × 40% = £3,800.
• From 2027/28: £9,500 × 44% = £4,180, which is £4,180 − £3,800 = £380 more.

The cash ISA limit stays at £20,000, so using your ISA allowance each year is worth more than before. Income Tax rates on property income in England, Wales and Northern Ireland rise to the same 24%, 44% and 49% from 6 April 2027.

Mileage. If you use your own car for business, the tax-free amount your company can pay you rises from 45p to 55p a mile for the first 10,000 miles, backdated to 6 April 2026, and from 25p to 35p a mile above 10,000 miles from 6 April 2027. For a director driving 12,000 business miles:

• Old rates: 10,000 × 45p = £4,500, plus 2,000 × 25p = £500, a total of £4,500 + £500 = £5,000.
• 2026/27: 10,000 × 55p = £5,500, plus 2,000 × 25p = £500, a total of £5,500 + £500 = £6,000.
• 2027/28: 10,000 × 55p = £5,500, plus 2,000 × 35p = £700, a total of £5,500 + £700 = £6,200.

That is up to £6,200 − £5,000 = £1,200 more a year paid tax-free, and the company can deduct it from its profits. Because the 55p rate is backdated, check whether this year's mileage claims so far used the old 45p rate.

Share options for staff. The Company Share Option Plan, renamed EMI2, doubles its limit from £60,000 to £120,000 of options per employee from 6 April 2027, and can now be used alongside EMI in full.

5. Side income: the £3,000 trading allowance

The trading allowance lets you earn a small amount of self-employed or casual income each year without paying tax on it, such as selling things you make, freelance work or hiring out equipment. From 6 April 2027 it triples from £1,000 to £3,000 a year. If your side income is £3,000 or less before any costs, it is tax-free. If it is more, you can deduct the £3,000 instead of your actual costs, whichever gives the lower bill.

For example, a higher rate taxpayer earns £2,800 a year from a side business with no costs to deduct:

• Now, with the £1,000 allowance: £2,800 − £1,000 = £1,800 taxed at 40%, so £1,800 × 40% = £720 of tax.
• From 2027/28, with the £3,000 allowance: £2,800 is below £3,000, so £0 of tax.

One important limit: you cannot use the allowance in a tax year if you have any trading income from a company you, or someone connected to you, owns or controls. So it does not cover money paid to you by your own limited company. It is for genuine side income from other customers.

6. Business rates and VAT

For retail, hospitality and leisure properties in England, the Small Business Rates Relief thresholds rise from 1 April 2027: properties with a rateable value up to £18,000 (from £12,000) pay no business rates, with tapered relief up to £21,000 (from £15,000). Bills for qualifying properties in these sectors are frozen in real terms for 2027/28 and 2028/29.

From 1 October 2027, online marketplaces will collect the VAT on sales by UK businesses that sell more than £90,000 through that marketplace. From 1 April 2027, overseas businesses selling services to UK businesses that are not VAT registered will have to charge UK VAT.

Everything else announced

• Pensions: from Budget day, 28 October 2026, pension and lump sum death benefits are no longer taxable just because they are paid more than two years after the member's death. A new Pension Tax Allowance from 6 April 2027 means pensioners whose income is no more than the full new State Pension will not pay Income Tax because of State Pension rises.
• ISAs: the cash ISA limit stays at £20,000. A new First Time Buyer ISA will replace the Lifetime ISA for new savers from 6 April 2029, and from 29 October 2026 the Lifetime ISA withdrawal charge falls from 25% to 20% for first-time buyers purchasing above the £450,000 price cap.
• Company cars: the company car tax percentages for 2030/31 rise by 1 percentage point from 6 April 2030, including from 9% to 10% for zero-emission cars. Mandatory payrolling of company cars, vans, fuel and medical benefits now starts on 6 April 2027, with other benefits from 6 April 2028.
• Company distributions: the tax rules on distributions, such as share buybacks and demergers, will be reformed from April 2028 (exact date not yet set), with draft rules published for consultation in 2027.
• Shares: a new Securities Transfer Tax replaces Stamp Duty and Stamp Duty Reserve Tax on shares from late 2027 (exact date not yet set).
• Research and development: the R&D Claim Notification Form is removed from 1 April 2027, and the Additional Information Form is simplified from autumn 2027.
• Employment expenses: from 6 April 2028, the £2,500 limit above which employees must use Self Assessment to claim tax relief on unreimbursed work expenses is removed, so they can claim through PAYE (the system that taxes wages). The government estimates this helps around 160,000 employees.
• Direct debits for VAT and PAYE: from April 2029 (exact date not yet set), businesses will have to pay VAT and PAYE through a direct debit set up with HMRC.
• VAT e-invoicing: VAT invoices must be issued in a set electronic format from 1 April 2029, with full technical details due by April 2028.
• Bank Corporation Tax Surcharge: rises from 3% to 6% from 1 January 2027 to 31 March 2028. This affects banks only.

When each change starts

Where the Budget gives only a month, the exact day is still to be confirmed.

6 April 2026 (backdated)

• Tax-free mileage for using your own car or van for business rises from 45p to 55p a mile for the first 10,000 miles a year

28 October 2026 (Budget day)

• Pension and lump sum death benefits are no longer taxable just because they are paid more than two years after the person's death

29 October 2026

• The Lifetime ISA withdrawal charge falls from 25% to 20% for first-time buyers whose home costs more than the £450,000 limit

1 January 2027

• Main rate first-year allowance rises from 40% to 50%: businesses can deduct half the cost of qualifying new equipment in the year they buy it
• Bank Corporation Tax Surcharge rises from 3% to 6% until 31 March 2028 (banks only)

1 April 2027

• National Living Wage rises by 3.9% to £13.21 an hour, and the rate for 18 to 20-year-olds to £11.27
• Main writing down allowance (the yearly deduction on the remaining cost of equipment) falls from 14% to 12% for companies
• Small Business Rates Relief for retail, hospitality and leisure properties in England: no business rates up to a rateable value of £18,000 (from £12,000), with tapered relief up to £21,000 (from £15,000)
• Overseas businesses selling services to UK businesses that are not VAT registered must charge UK VAT
• The R&D Claim Notification Form, which companies had to file before claiming research and development tax relief, is removed

6 April 2027

• Business Asset Disposal Relief: the lifetime limit of gains taxed at the reduced 18% Capital Gains Tax rate falls from £1 million to £500,000
• Tax on savings interest and property income rises to 24% (basic rate), 44% (higher rate) and 49% (additional rate)
• Trading allowance (tax-free side income) rises from £1,000 to £3,000 a year, not for income from your own company
• Tax-free mileage above 10,000 miles a year rises from 25p to 35p a mile
• Main writing down allowance falls from 14% to 12% for sole traders and partnerships
• EMI2, the renamed Company Share Option Plan: the limit on tax-advantaged share options per employee doubles from £60,000 to £120,000
• Founders' Relief: a new 10% Capital Gains Tax rate on up to £10 million of lifetime gains, for qualifying founders of high-growth, innovative companies
• Pension Tax Allowance: pensioners whose income is no more than the full new State Pension will not pay Income Tax because of State Pension rises
• Company cars, vans, fuel and medical benefits must be taxed through the company's payroll, known as payrolling benefits

1 October 2027

• Online marketplaces must collect the VAT on sales by UK businesses that sell more than £90,000 a year through that marketplace

Autumn 2027

• The R&D Additional Information Form, which supports a research and development tax relief claim, is simplified

Late 2027

• A new Securities Transfer Tax replaces Stamp Duty and Stamp Duty Reserve Tax on share purchases (exact date not yet set)

6 April 2028

• The £2,500 limit above which employees must use Self Assessment to claim tax relief on unreimbursed work expenses is removed, so they can claim through PAYE
• All other benefits in kind must also be taxed through the company's payroll

April 2028

• Reformed tax rules for company distributions, such as share buybacks and demergers (exact date not yet set)

1 April 2029

• VAT invoices must be issued in a set electronic format (e-invoicing)

April 2029

• Self Assessment payments on account become smaller, more regular payments through the year (exact date not yet set)
• VAT and PAYE must be paid to HMRC by direct debit (exact date not yet set)

6 April 2029

• A new First Time Buyer ISA replaces the Lifetime ISA for new savers

6 April 2030

• Company car tax percentages rise by 1 percentage point, including from 9% to 10% for zero-emission cars

Read our guide to payments on account for how they work today.

What to do before 5 April 2027

• Selling in the next year or two? Work out your expected gain. If it is over £500,000, the timing of the sale could be worth tens of thousands of pounds, as the example above shows.
• Check your mileage claims. Make sure this year's claims use 55p a mile, and correct any already paid at 45p.
• Review personal cash savings. Use your ISA allowance, and consider whether surplus cash is better left in the company or invested.
• Plan this year's dividends as usual. Nothing changed, so plan the rest of the year around the tax bands you are in now.
• Budget for higher wages. If you employ staff on the minimum wage rates, plan for the 3.9% rise from 1 April 2027.

Common questions

Sources: HM Treasury, Budget 2026 (HC 726, 28 October 2026), chapters 2, 3, 4 and 6, and HMRC guidance on GOV.UK for the trading allowance, mileage rates, tax on savings interest, tax on dividends and Business Asset Disposal Relief.