Business

Corporation Tax
Corporation Tax has been capped at 25% for the duration of parliament.

Capital allowances
From April 2026, the main rate of writing-down allowances on assets has been reduced by 4% to 14%. This will now be reduced by a further 2% to 12%. The new first-year allowance of 40% for main‑rate assets effective from 1 January 2026, will now increase to 50%.

Annual Investment Allowance
The £1 million Annual Investment Allowance (AIA) – which provides 100% tax relief on qualifying expenditure – will continue to be the first relief to consider. Companies may also continue to benefit from 100% full expensing on qualifying expenditure.

Research and Development
R&D red tape is to be cut. The R&D claim notification form will be removed from 1 April 2027. The additional information form will then be simplified from autumn 2027.

Business Asset Disposal Relief (BADR)
From 6th April 2027, the BADR lifetime limit will reduce from £1 million to £500,000.

Founders’ Relief
A new Founders’ Relief is proposed from 6th April 2027, offering a 10% Capital Gains Tax (CGT) rate on up to £10 million of lifetime qualifying gains for founders and significant early investors in high-growth, innovative UK companies.

Young Entrepreneurs Allowance
The Government has announced a new Young Entrepreneurs Allowance, which will be piloted to help young people overcome the financial barriers to starting their own business.

Making Tax Digital for Income Tax – penalties
The first-year penalty easement for taxpayers entering Making Tax Digital (MTD) for Income Tax from April 2026 ends in March 2027, meaning that penalty points can apply to late quarterly updates from 2027/28 onwards.

It was announced today that the same approach will apply to taxpayers with qualifying income over £30,000 when they enter MTD from April 2027, with no late submission penalty points for late quarterly updates during 2027/28.

The easement only applies to the quarterly reports and does not extend to the year-end tax returns, so it remains important for businesses and landlords to meet their filing obligations on time.

Parental Allowance for the self-employed and others
The Government has announced a new Parental Allowance from April 2029, extending financial support to eligible self-employed fathers, partners and adopters in Great Britain.

Trading Allowance
The trading allowance, first introduced at £1,000 in April 2017, will increase to £3,000 from 6th April 2027, providing greater tax relief for individuals with smaller amounts of trading income. Gross trading income below £3,000 can be reported through a simplified service.

Mileage rates
The tax-free and tax-deductible mileage rate for employees and the self-employed using their own cars or vans for business journeys increased from 6th April 2026 from 45p to 55p per mile for the first 10,000 business miles. From 6th April 2027 the mileage rate above 10,000 miles will increase from 25p to 35p per mile.

National Living Wage (NLW) and National Minimum Wage (NMW)
From 1st April 2027, minimum wage rates will rise by 3.9%, with the NLW increasing to £13.21 an hour and the NMW for 18 to 20-year-olds rising to £11.27.

Business rates
Business rates support for smaller businesses in the retail, hospitality and leisure sectors were announced in England from 1st April 2027.

For qualifying properties, the rateable value threshold for 100% Small Business Rates Relief will increase from £12,000 to £18,000, with relief tapering to nil for properties with a rateable value between £18,000 and £21,000, compared with the current £15,000 upper limit. These enhanced thresholds will apply until 31st March 2029.

The Government will also provide an additional 20% business rates relief for pubs, social clubs and all but the largest live music venues in 2027/28 and 2028/29, taking their total relief to 35%. For live music venues with a rateable value of £1 million or more, the relief will remain at 15%.

In addition, eligible retail, hospitality and leisure properties will benefit from a two-year real-terms business rates bill freeze, with increases generally limited to Consumer Price Index (CPI) inflation in 2027/28 and 2028/29.

VAT and online marketplaces
From October 2027, the VAT rules for online marketplaces, first brought in in 2021, will be extended.

Where a business is already VAT registered or has annual sales of more than £90,000 through an individual online marketplace, the marketplace will become responsible for collecting the VAT due on qualifying sales made through its platform.

Company distributions and business restructurings
The Government has announced plans to reform the tax treatment of company distributions, with the aim of providing more consistent tax treatment for similar transactions.

The proposals could affect some common transactions undertaken by owner-managed companies, including business restructuring, although the Government has confirmed its intention to protect genuine commercial transactions, including family successions.

Companies House – Profit and Loss account filing
Ahead of the Budget, the Government announced that existing plans requiring small companies and micro-entities to file their profit and loss (P&L) accounts with Companies House will be ‘paused’. Companies will now to able to continue to file abridged and filleted accounts, while the Government considers ways of simplifying the information businesses provide to Companies House and HMRC.

However, other planned reforms are still going ahead, including the requirement for all companies to file their accounts using commercial software from 1st April 2028. Smaller companies should therefore continue to prepare for the move to software-only filing.

Personal

Higher tax rates for savings income
From 6th April 2027 the tax rates for savings income for all UK taxpayers would be increased by 4% from the proposed 2% increase in the 2025 Budget.

Property income tax rates
Also announced was an increase to property income tax rates from 6th April 2027 again increased to 4% instead of the originally proposed 2%.

The rates applying to savings and property income will now be:

24% for basic rate taxpayers
44% for higher rate taxpayers, and
49% for additional rate taxpayers

Dividend tax rates
As previously announced a 2% increase will apply to dividends received from April 2026 for all UK taxpayers with no increase in the rate for additional rate taxpayers.

The rates of tax on dividends are:

10.75% for basic rate taxpayers
35.75% for higher rate taxpayers, and
39.35% additional rate taxpayers

Self-Assessment Tax Returns – Payments on Account (POAs)
From April 2029, taxpayers who currently make Self-Assessment POAs will move towards smaller, more regular payments throughout the year.

New Pension Tax Allowance
From April 2027, a new Pension Tax Allowance will be introduced for people of State Pension age, helping to ensure those whose only income is the State Pension do not pay tax or need to file a self-assessment tax return simply because it exceeds the Personal Allowance.

For 2027/28, the full new State Pension will rise to £13,036.40, while the Personal Allowance remains at £12,570. The new Pension Tax Allowance will be worth up to £94 and is expected to be applied automatically by HMRC.

Individual Savings Accounts (ISAs)
The Government is reversing the previous policy to reduce the cash ISA limit to £12,000 to all but the over-65s and instead it will remain at £20,000.

A new Starter ISA to encourage first time investors by making stocks and shares investments more accessible will be created, with the start date yet to be confirmed.

Residential energy costs
Standing charges on household gas bills will be abolished from 2027 with electricity standing charges following as soon as possible afterwards. This announcement does not currently extend the removal of standing charges to business energy customers.

The temporary VAT 0% rate on residential electricity will also be extended until 30th June 2027.

Households in council tax bands A-D will receive a £100 rebate this winter, with the date to be announced.

Fuel Duty
The temporary 5p fuel duty cut will be further extended until 30th June 2027.

Alcohol Duty
Alcohol duty set to rise by 4.55% in line with inflation.

And finally…

HMRC Debt Collection Powers Expanded
The Government has confirmed that HMRC will be granted enhanced powers to recover unpaid tax debts directly from bank accounts where taxpayers repeatedly fail to engage or settle outstanding liabilities despite having the means to do so.

While aimed at persistent non-compliance, the changes reinforce the importance of dealing with tax arrears promptly and engaging with HMRC where payment difficulties arise.