What the Chancellor's First Budget Means for You and Your Busines
Chancellor John Healey delivered his first Budget on 28 October 2026. Headline rates of Income Tax, National Insurance, VAT and Corporation Tax are unchanged, but there are significant changes for savers, landlords, business owners and employers. Here are the measures most likely to affect you.
Personal Tax Changes
Property and savings income will be taxed at 24%, 44% and 49% from 2027/28, two points higher than now.
Income Tax thresholds stay frozen until 5 April 2031.
The cash ISA limit stays at £20,000. A new First Time Buyer ISA launches in April 2029, with a 25% bonus on up to £4,000 a year.
From April 2029, Payments on Account will become smaller and more frequent.
Employers
The National Living Wage rises 3.9% to £13.21 an hour from 1 April 2027.
Main National Insurance thresholds stay frozen until 5 April 2031.
The 55p rate for the first 10,000 business miles is now permanent, and the rate above that rises to 35p from April 2027.
Business Owners and Founders
Business Asset Disposal Relief is halved to a £500,000 lifetime limit from 6 April 2027.
A new Founders' Relief offers a 10% Capital Gains Tax rate on up to £10 million of lifetime gains for qualifying founders.
The main rate First Year Allowance rises to 50% from 1 January 2027, while Writing Down Allowances fall to 12%.
EMI2 doubles tax advantaged share option limits to £120,000, with a 15 year exercise period.
The Trading Allowance triples to £3,000.
Energy and VAT
The British Industrial Competitiveness Scheme will cut electricity bills by up to 25% for over 10,000 energy intensive businesses from April 2027.
Online marketplaces will collect VAT on many UK sellers' sales from October 2027.
The 5p fuel duty cut and 0% VAT on domestic electricity are both extended into 2027.
What to do now
Most changes take effect from April 2027. If you are thinking about selling your business, investing in equipment or reviewing your property income, now is the time to plan.
Get in touch with our team to discuss how the Budget affects you: