The Autumn Budget is one of those important dates in the financial calendar, shaping the tax and economic landscape for the year ahead. While Budget announcements can sometimes feel complex, understanding the key changes can help you make informed decisions and plan ahead with confidence.
Below is a summary of some of the announcements and changes introduced in this year's Budget.
Income Tax
▶ Personal tax threshold freeze remains until 2030/31.
▶ From April 2027 – Additional tax payable on property income and savings income at the basic rate (24% from 20%) and the higher rate (44% from 40%) and additional rate (49% from 45%)
▶ For 2027/28 - Class 1 Lower limit, Class 2 small profit threshold and voluntary class 2 and 3 contributions uprated in line with CPI of 3.5%. No change to other National Insurance Limits and thresholds.
▶ From April 2027 – Annual Cash ISA limits now remains unchanged at £20,000
▶ Mileage rates to stay at 55p for first 10,000 miles and from April 2027 35p per mile above 10,000 miles.
▶ From April 2027 – Trading allowance increasing from £1k to £3k for self-employment
▶ Changes to Company Share Option Scheme (individual option limit increasing from £60k to £120k, so value of share options available to staff doubling)
▶ From 1 April 2027 National minimum wage changes:
•21 and over £13.21 per hour (increase of 3.9%)
•18 – 20 £11.27 per hour (increase of 3.9%)
•Under 18 and apprentices £8.31 per hour (increase of 3.9%)
Business
▶ 100% First Year Allowances on Zero Emission cars, Electric Vehicle Charge point and qualifying plant and machinery extended to 31 March 2027 for Corporation Tax and 5 April 2027 for income tax.
▶ Small Business Rates Relief for Retail, Hospitality and Leisure – eligibility threshold increased form 1 April 2027. Rateable value of £18,000 threshold for 100% relief and the threshold for tapered relief increases to Rateable value of £21,000.
▶ From - New First Year Allowance of 40% for main rate assets will be increased to 50%. This will be relevant for asset purchases in excess of the Annual Investment Allowance.
▶ From 1 April 2027 for Corporation tax and 5 April 2027 for income tax main rate of written down allowances will reduce from 14% to 12%.
▶ No announcement for changes to VAT rates or thresholds.
▶ VAT invoices will be required to be in electronic format from April 2029, full road map for implementation to be announced.
▶ From 1 April 2027 R&D claim notification for no longer required, removing the need for pre-notification to HMRC of intention to claim R&D.
▶ As previously notified from April 2029 employee pension salary sacrifice payments exempt from National Insurance is being capped at £2,000 per year. Any contributions above this will have Employers and Employees NI applied in the usual way.
Capital Gains
▶ From 6 April 2027 Reduction in lifetime limit of Business Asset Disposal Relief from £1,000,000 to £500,000. This will affect business owners looking at disposing of their shares/selling the business.
▶ From 6 April 2027 – Founders’ relief will introduce a 10% Capital Gain Rate on qualifying disposals of shares or securities, subject to a £10million lifetime limit. This is intended to support founders and early investors of high growth companies that make a significant and long-term contribution.
Other Points
▶ More timely payments for self assessment – from April 2029 individuals liable to Payments on Account will be required to pay more of the tax during the year, through direct debit by default. Done via estimating income and tracking how their payments are covering the forecasted tax liability. Further detail to be published on frequency of in year payments, safegurads and flexibility for anyone facing financial difficulty, approach to compliance.
▶ Payment of VAT and PAYE to be required via Direct Debit from April 2029 for businesses. This functionality is already available.
▶ HMRC are being given additional funding to assist with compliance and debt collection partnerships.
▶ From October 2027 Online marketplaces (e.g Amazon, Etsy etc.) will be responsible for collecting VAT on sales by UK registered businesses with a minimum sales threshold of £90,000 – rules will not apply for personal sales, second-hand goods or business to business transactions.
▶ Pensioners with only state pension as their income will not pay income tax on the amount received in excess of the usual personal allowance.
▶ Households in council tax bands A – D will receive £100 directly into their accounts to help with energy bills this winter. 5% VAT cut to electricity extended to July 2027.More timely payments for self assessment – from April 2029 individuals liable to Payments on Account will be required to pay more of the tax during the year, through direct debit by default. Done via estimating income and tracking how their payments are covering the forecasted tax liability. Further detail to be published on frequency of in year payments, safegurads and flexibility for anyone facing financial difficulty, approach to compliance.
