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Autumn Budget 2026: what was announced and what does it mean for you?

Thu, 29 Oct 2026 16:11:29 GMT

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.

Dividend tax has changed: what does it mean for company directors?

Sun, 04 Oct 2026 09:24:47 GMT

If you take dividends from your company, the same payment may now leave you with less to spend. Dividend tax rates increased on 6 April 2026, so a salary-and-dividend arrangement that worked last year deserves a fresh look.

For directors who are also shareholders, the practical questions are how much to set aside for tax, whether their income mix still suits them and what the business can afford to distribute.

What Has Changed?

For the 2026/27 tax year, running from 6 April 2026 to 5 April 2027, the dividend tax rates are:

Basic rate: 10.75%, up from 8.75% in 2025/26
Higher rate: 35.75%, up from 33.75%
Additional rate: unchanged at 39.35%

The first two rates have risen by two percentage points. The annual dividend allowance remains £500, and dividend income covered by any available Personal Allowance is still tax-free. These are the current rules confirmed by HMRC , rather than a forecast of possible Budget changes.

The dividend rates apply across the UK. Your other income matters: dividends are added to it when working out which bands apply, and a payment may fall across more than one band.

What Does This Mean for Take-Home Pay?

Consider a director receiving a £12,570 salary and £30,000 in dividends in each tax year, with no other income or reliefs and the full Personal Allowance available. The salary uses the Personal Allowance, and all the dividends fall within the basic-rate band.

After the £500 dividend allowance, £29,500 is subject to dividend tax:

In 2025/26: £29,500 × 8.75% = £2,581.25
In 2026/27: £29,500 × 10.75% = £3,171.25

The same £30,000 dividend therefore leaves £590 less after dividend tax, equivalent to about £49 a month. The rates for both years are available on GOV.UK .

This illustration isolates the dividend tax change. It is not a recommended salary level and excludes the company's Corporation Tax and employer National Insurance costs. Your own result will depend on your income, allowances and circumstances.

Should You Change Your Salary or Pension Contributions?

Review the combined company and personal tax cost before changing how you pay yourself. Salary can reduce taxable company profits, but Income Tax and employee and employer National Insurance may apply. Eligibility for Employment Allowance can also affect the comparison, particularly for single-director companies.

Dividends do not attract National Insurance, but they come from profits available for distribution after allowing for Corporation Tax. Comparing the headline salary and dividend tax rates alone will not show the full cost.

Employer pension contributions may be worth reviewing where retirement saving fits your plans. Tax relief depends on the circumstances, including the business purpose of the remuneration package . Contributions also count towards your pension annual allowance , which can be lower for some people.

Money paid into a pension is subject to access restrictions, so consider your need for income now as well as later. Regulated financial advice may be appropriate alongside tax advice.

When Will the Higher Tax Need Paying?

Keep the tax year separate from the payment date. Your 2025/26 Self Assessment liability still uses that year's dividend rates, even though its balancing payment is normally due on 31 January 2027.

The increased rates apply to 2026/27. Any balancing payment for that year is normally due on 31 January 2028.

Where payments on account apply, the January and July 2027 instalments will usually be based on your previous year's liability. They may therefore leave a shortfall even if your dividends stay the same. A higher first payment on account for the following year may also fall due in January 2028.

Updating your tax reserve now can make that payment easier to manage.

What Should You Review Now?

Before your next dividend, check:

Your expected salary, dividends and other income for the whole tax year
How much cash you need personally, after allowing for tax
The company's available profits, tax liabilities and working-capital needs
Whether pension contributions fit your longer-term plans
Your forecast tax bill and payments already made or due

A healthy bank balance alone does not establish that a dividend is affordable or lawful. Keep accounts current and retain the required dividend minutes and vouchers .

At Radford & Sergeant, we can help you review your income mix , estimate the tax cost and plan withdrawals around your business and personal needs. Contact our Camberley or Reading team to discuss your circumstances.

Information checked on 4 October 2026. This article provides general information, not personalised tax, legal or investment advice. Tax treatment depends on individual circumstances and rules may change.

Autumn Budget 2026: What Should You Review Before 28 October?

Fri, 02 Oct 2026 21:26:43 GMT

The Autumn Budget is approaching, and with it comes the familiar question: should you do anything now? For individuals and small business owners, a useful starting point is to understand your current position and identify the decisions that genuinely need attention.

HM Treasury has confirmed that the Budget will take place on Wednesday 28 October 2026. The Office for Budget Responsibility will publish its economic and fiscal forecast alongside it. The specific tax measures announced on the day remain to be seen.

What Is Worth Reviewing?

Start with the figures you already have. If you run a business, bring your bookkeeping up to date and review your expected profit, tax payments and cash commitments. For your personal finances, gather details of income, savings, pension contributions and any significant transactions you are considering.

A clear picture makes it easier to assess an announcement’s real effect on you. It also helps avoid decisions driven by a headline that may not apply to your circumstances.

Income, Dividends and Your Household Budget

For company owners, salary, dividends and pension contributions should be considered together. For individuals, the interaction between earnings, savings and other income can be just as important as a headline tax rate.

Questions worth discussing include:

How much income are you likely to receive this tax year?
Have your circumstances changed since your last tax review?
Are you setting aside enough for your expected tax bill?

Before bringing income forward or changing how you take money from your company, check the wider tax and cash-flow consequences. A sensible arrangement for one person may not suit another.

Pensions and Longer-Term Plans

Pensions often attract attention before a Budget. If you are considering a contribution, retirement or a withdrawal, review the decision against your existing plans, available allowances and need for access to money.

Avoid making an irreversible decision solely because of speculation about possible changes. Tax planning and the suitability of a pension or investment are separate considerations; regulated financial advice may be needed alongside advice on the tax position.

Business Costs, Employment and Investment

Payroll, borrowing and overheads all affect the amount a business can afford to invest. A practical pre-Budget review should look at your expected staffing costs, planned equipment purchases and working-capital needs.

Test your forecast against a few possibilities, such as a higher wage bill, slower customer payments or increased finance costs. This is useful preparation even if the Budget makes no change to the taxes most relevant to you.

Employment-law changes may also follow a separate timetable. A Budget headline alone will not tell you when a new workplace obligation takes effect, so check the relevant legislation and commencement date before changing your processes.

Inflation and the Cost of Living

The economic outlook matters to household budgets and business pricing. The OBR’s forecast will provide updated context, but a forecast is not a guarantee of what your own costs will do.

Review contracts coming up for renewal, borrowing arrangements and regular spending. For businesses, compare changes in costs with your margins and pricing. For households, consider how much flexibility remains after essential outgoings and planned tax payments.

How Should You Read Budget Announcements?

When a measure is announced, ask four questions:

Is it a confirmed change, a proposal or a consultation?
Who does it apply to?
When does it take effect?
Are there conditions or transitional rules?

An announcement, draft legislation and a rule already in force are different stages. The detail and start date can matter as much as the headline.

A Practical Next Step

Make a short list of decisions you expect to take over the coming months, such as recruiting, investing in equipment, drawing money from your company or retiring. Discuss any genuinely time-sensitive decision before acting, rather than assuming it should either be rushed through or postponed until Budget day.

At Radford & Sergeant, we can help you review your tax position and business finances, understand how confirmed changes affect you and plan the next step with confidence. Contact our Camberley or Reading team to discuss your circumstances.

Information checked on 2 October 2026. This article provides general information, not personalised tax, legal or investment advice. Tax treatment depends on individual circumstances and rules may change.

Making Tax Digital for Income Tax Self Assessment (MTD for ITSA): Everything You Need to Know

Wed, 01 Nov 2023 13:44:39 GMT

The UK’s tax system has undergone significant changes in recent years, driven by a vision to become one of the most digitally advanced tax systems globally. One of the flagship initiatives to realise this vision is ‘Making Tax Digital’ (MTD). While many businesses are already familiar with MTD for VAT, it’s time to shed light on Making Tax Digital for Income Tax Self Assessment (MTD for ITSA). Here’s what you need to know.

What is MTD for ITSA?

MTD for ITSA is an extension of the MTD initiative, aiming to make the process of income tax submissions more accurate and timely. By leveraging digital records and online submissions, HMRC intends to streamline the reporting process, reduce errors, and facilitate a more continuous reporting mechanism.

From When Will It Operate?

The MTD for ITSA initiative will come into full swing from April 2026. It’s crucial for businesses, landlords, and self-employed individuals to be aware of this date to ensure compliance.

Who Will It Affect?

MTD for ITSA will impact:

Self-employed businesses and landlords with an annual business or property income above £50,000. This threshold takes into consideration total combined income if you are both self-employed and a landlord. From April 2027, this threshold will be reduced to £30,000 and, from April 2028, to £20,000.

If you fall into this categoy, you’ll need to follow the MTD for ITSA guidelines from the specified date.

Reporting Obligations

The MTD for ITSA model brings about a new approach to reporting:

Quarterly Reporting: Instead of an annual Self Assessment tax return, you’ll need to submit a summary of your income and expenses every three months.
End of Year Declaration: After the fourth quarterly report, there’s a “finalisation” process. This is essentially your end-of-year declaration where you confirm your income and expenses, claim allowances, and reliefs.
Digital Records: All records relevant to ITSA must be maintained digitally using MTD-compatible software. This means manual or spreadsheet-based record-keeping won’t suffice unless the spreadsheets can integrate with HMRC systems.

How Can Your Accountant Assist?

Now, if this all seems a bit overwhelming, don’t fret. Your accountant is here to guide and assist you through these changes.

Finding the Right Software: With a multitude of software solutions out there, choosing the right one can be daunting. Your accountant can recommend MTD-compatible software tailored to your business type and size, ensuring a seamless transition. Some software is available on mobiles to allow, for instance, capture of receipts and issuing invoices which may give greater ease to running a small business and not just be an administrative burden.

Training and Integration: Once the software is selected, you might need training. Accountants can provide hands-on guidance, ensuring you’re comfortable using the software and making the most of its features.

Ongoing Support: From setting up digital records to submitting quarterly reports, your accountant can manage these tasks, ensuring accuracy and timely submissions.

Staying Compliant: With the expertise and knowledge of the latest updates, your accountant will ensure that you remain compliant, avoiding any potential penalties.

In Conclusion

The move to MTD for ITSA represents a significant shift in how income tax information is reported to HMRC. While it might seem like a massive change, with the right software and the guidance of an experienced accountant, the transition can be smooth and even beneficial in the long run. By embracing digital, businesses can gain better insights into their finances, make informed decisions, and ensure they’re paying the right amount of tax.

If you’re unsure about any aspect of MTD for ITSA, or if you need assistance in preparing for these changes, don’t hesitate to reach out. Together, we can navigate the digital tax future with confidence.

Understanding the UK’s New Tax Year Basis: A Shift for Self-Employed Individuals and Partnerships

Fri, 04 Sep 2020 13:44:39 GMT

Introduction:

In the realm of taxation, changes are constant, ensuring the system’s evolution aligns with modern practices. However, these transformations often lead to complexities before they settle into routine. One such significant shift was introduced in the Autumn Budget of 2021, reforming how trading profits for self-employed individuals and partnerships are taxed. Here’s what you need to know about these changes and how they may affect your tax submissions in the coming years.

Simplified Tax Changes: What’s New?

The UK government, aiming for a more streamlined approach, has altered how business profits are allocated for tax purposes. Previously, profits taxed in any given year were those earned in the accounting period ending that year. Moving forward, from the 2024/25 tax year, the focus will shift to the profits apportioned to the tax year itself, a system now referred to as the “tax year basis.”

Who Will Be Affected?

This modification impacts self-employed individuals and partners in trading partnerships whose financial years do not coincide with the tax year (not ending between 31 March and 5 April). While the changes aim to simplify the tax process, they inadvertently introduce new layers of complexity, especially for those with intricate commercial engagements or international tax considerations.

What Are the Implications?

With the new rules, you might face additional administrative work. HMRC had proposed easing these burdens, but the measures introduced are minimal, offering slight respite. From the 2024/25 tax year, you will need to calculate your taxable profits based on the specific parts of your accounting profits that fall into that tax year. While it seems straightforward, it requires you to potentially file provisional figures if your accounts aren’t finalized by your tax return deadline, necessitating subsequent revisions.

Transition Period: The One-Off Challege

The 2023/24 tax year is a transitional phase, where your taxed profits might be based on an extended period and you might deduct any ‘overlap profits’ from earlier years. However, this adjustment can accelerate how soon some of your income is taxed, impacting how you’re subjected to various income-dependent allowances and tax charges.

Losses and Special Reliefs

If you incur losses during this transitional phase due to these adjustments, there might be special reliefs available, allowing some losses to be set against profits from the past three years.

The Digital Shift: Making Tax Digital (MTD) for Income Tax

These changes aren’t happening in isolation. They’re also paving the way for the ‘Making Tax Digital’ initiative, mandating digital quarterly updates and an annual “End of period statement” to finalize taxable profits. This requirement will phase in for most businesses from April 2026 onwards, depending on their turnover, further integrating the taxation process into the digital age.