The Chancellor, John Healey, delivered his first Budget on 28 October 2026. There were no increases to the headline rates of Income Tax, National Insurance or VAT. Instead there was a long list of smaller measures, and several of them will affect landlords, savers, business owners and employers from April 2027.
Here is a summary of the changes most relevant to our clients, and what you may want to review before they take effect.
What Has Changed for Income Tax?
The main rates are unchanged, and the Personal Allowance (£12,570) and higher-rate threshold (£50,270) stay frozen until April 2031. As incomes rise, more of them will continue to be taxed at higher rates.
The main changes are:
- Savings and property income: Last year’s Budget had already announced a 2-point rise from April 2027. This Budget adds a further 2 points, so from 6 April 2027 the rates will be 24% (basic), 44% (higher) and 49% (additional). The savings rates apply UK-wide; the property income rates apply in England, Wales and Northern Ireland.
- Trading Allowance: This triples from £1,000 to £3,000 from 6 April 2027, which helps people with small side incomes.
- Pensioners: A new Pension Tax Allowance from 6 April 2027 means pensioners whose total income does not exceed the full new State Pension will pay no Income Tax. The allowance tapers away for incomes just above that level.
- Dividends: There are no further changes beyond the increases that took effect in April 2026. Our dividend tax article
covers those.
What Does This Mean for Landlords?
Take a basic-rate landlord with £10,000 of taxable rental profit:
- 2026/27: £10,000 × 20% = £2,000
- 2027/28 under last year’s plans: £10,000 × 22% = £2,200
- 2027/28 as now announced: £10,000 × 24% = £2,400
That is £400 a year more than today. For higher-rate landlords the rise is the same 4 points, from 40% to 44%. If you hold property personally, it may be worth reviewing your ownership structure, finance costs and expected profits before April 2027.
What Has Changed for Business Owners?
- Business Asset Disposal Relief: The lifetime limit falls from £1 million to £500,000 for disposals from 6 April 2027. A higher-rate taxpayer selling a business with a £1 million qualifying gain would pay about £30,000 more in Capital Gains Tax.
- Founders’ Relief: A new relief from 6 April 2027 will apply a 10% Capital Gains Tax rate to up to £10 million of lifetime gains for qualifying founders. The eligibility conditions are still under consultation.
- Capital allowances: Full expensing for companies continues. The main-rate first-year allowance rises from 40% to 50% from 1 January 2027, and the main-rate writing-down allowance falls from 14% to 12% from April 2027.
- Share schemes: Expanded Enterprise Management Incentives (EMI) limits are already in force from 6 April 2026. Company options of up to £6 million are allowed (up from £3 million), in companies with gross assets of up to £120 million and fewer than 500 employees.
- Business rates (England): From April 2027, 100% small business rate relief for retail, hospitality and leisure businesses will apply to properties with a rateable value of up to £18,000, up from £12,000. The tapered relief limit rises from £15,000 to £21,000.
If you are thinking about selling your business or shares, timing matters. A disposal before 6 April 2027 may still benefit from the current £1 million limit. Please speak to us before you agree terms.
What Does It Mean for Employers?
- Minimum wage: From 1 April 2027 the National Living Wage (age 21 and over) rises 3.9% to £13.21 an hour, and the rate for 18 to 20-year-olds rises to £11.27.
- Employer National Insurance: No change. It stays at 15% on earnings above £5,000 a year.
- Mileage allowance payments: The 55p rate for the first 10,000 business miles is unchanged. From April 2027, the rate above 10,000 miles rises from 25p to 35p.
Is There Anything New on Making Tax Digital?
Sole traders and landlords who join Making Tax Digital for Income Tax from April 2027 (those with qualifying income over £30,000) will now get the same first-year “soft landing” as this year’s group. No penalty points will be given for late quarterly updates in 2027/28. Certain groups of taxpayers will also be exempt until further notice.
The timetable itself is unchanged. If you joined in April 2026, the soft landing ends after this tax year, so penalty points for late quarterly updates apply from 6 April 2027.
What Else Was Announced?
- The planned cut to the Cash ISA allowance has been scrapped, so the full £20,000 allowance remains for all ages.
- From October 2027, online marketplaces will collect VAT on sales by UK businesses with sales above £90,000 per platform.
- Households in council tax bands A to D in England will receive a one-off £100 energy payment from January 2027.
- The 0% VAT rate on household electricity is extended to July 2027, and the 5p fuel duty cut also continues until July 2027.
- From April 2029, Self Assessment taxpayers who make payments on account will make more regular in-year payments towards their final tax bill.
What Should You Review Now?
Before April 2027, check:
- Your expected rental and savings income for 2027/28, and whether your tax reserves need increasing
- The timing of any planned business sale or share disposal
- Your plans for buying equipment and other capital expenditure
- Payroll costs for staff on or near the minimum wage
- Whether you need to be ready for Making Tax Digital from April 2027
At Radford & Sergeant, we can help you work out what the Budget means for your own position and plan around the changes. Contact our Camberley or Reading team
to discuss your circumstances.
Information checked on 29 October 2026. This article provides general information, not personalised tax, legal or investment advice. Many Budget measures still need to pass through Parliament or are subject to consultation, so the details may change. Tax treatment depends on individual circumstances.
