Budget 2026: the key headlines for you and your business

The Budget delivered on 28 October 2026 included measures affecting personal finances, business investment, employment costs and succession planning. While many changes arrive from April 2027, others extend into 2029 and beyond. At Larking Gowen, we’ve brought together the main headlines to help you understand the announcements and their potential implications.

Personal tax: frozen thresholds and higher rates

Income tax thresholds and bands remain frozen until April 2031. As earnings increase, more income may therefore fall into higher tax bands. From April 2027, property and savings income tax rates rise to 24%, 44% and 49%. Dividend rates remain at 10.75%, 35.75% and 39.35% respectively.

The proposed cash ISA restriction will not proceed: the £20,000 ISA allowance continues to apply across cash and stocks and shares ISAs.

A new Pensions Tax Allowance will prevent people whose income consists solely of the State Pension from paying income tax on it through to 2029/30, even if it exceeds the standard Personal Allowance.

Employers: payroll, benefits and share schemes

The Employers’ National Insurance threshold remains at £5,000 and the Upper Earnings Limit at £50,270 until 2031. The Lower Earnings Limit and Small Profits Threshold increase by 3.5%.

From April 2027, company car benefit charges rise by one percentage point for 2027/28; van and private fuel benefits increase with inflation, and four benefit types move to mandatory payrolling.

Tax-free mileage allowances become 55p for the first 10,000 miles and 35p thereafter.

Company Share Ownership Plans will have a £120,000 individual option limit and a 15-year exercise period. Enterprise Management Incentive options granted from 6 April 2027 will be reported through end-of-year returns rather than separate notifications.

Businesses: investment reliefs and digital reporting

From April 2027, the trading allowance increases from £1,000 to £3,000

Capital allowances change in stages. First Year Allowances for eligible plant increase from 40% to 50% from January 2027. From April, main-rate Writing Down Allowances fall from 14% to 12%, while the 100% First Year Allowance for qualifying zero-emission cars and electric vehicle charging points ends.

Also business rates relief thresholds for most retail and leisure businesses rise from £12,000 to £18,000. 
Making Tax Digital for Income Tax extends to people with self-employed and property income of £30,000, alongside the end of first-year filing penalty easements.

Capital taxes: pensions and business disposals

From April 2027, unused pension funds will generally form part of an individual’s estate for Inheritance Tax.

The Capital Gains Tax lifetime limit for Business Asset Disposal Relief will halve from £1 million to £500,000.

Both announcements are significant for those considering retirement, business succession or a future sale.

Proposed Founders’ Relief would introduce a 10% rate on certain disposals, with a £10 million lifetime limit on chargeable gains. Details remain subject to consultation.

Changes to holdover relief for assets including goodwill could also allow greater deferral of gains when qualifying business assets are gifted.

VAT: changes now and further ahead

The domestic energy VAT zero rate is extended to July 2027.

From April 2027, the reverse charge on business services purchased from abroad will apply only where the UK purchaser is VAT-registered.

Large taxi firms are expected to account for VAT on full passenger fares from 2 January 2028, regardless of contractual arrangements.

Looking ahead, all low-value import consignments become subject to customs duties from October 2028. All VAT invoices will need to be electronic from April 2029, marking another important change in business administration.

Motoring and pension salary sacrifice

Fuel duty remains frozen, with the temporary 5p reduction extended to July 2027.

A mileage-based e-Vehicle Excise Duty will apply to electric and hybrid cars from April 2028.

Company car tax rates have been announced through to 2030/31, with incentives for electric vehicle purchases maintained.

From April 2029, pension salary sacrifice amounts exceeding £2,000 will attract National Insurance Contributions as if paid as cash salary. This is a longer-term change for employers and employees using these arrangements.

Property and household finances

A High Value Council Tax Surcharge starts in April 2028 for properties valued above £2 million in 2026. Proposed annual charges range from £2,500 for properties above £2 million to £7,500 for those above £5 million.

The National Living Wage and State Pension increase by 3.9% from April 2027.

Households in Council Tax bands A to D will receive a £100 energy payment from January 2027.

Plan 2 Student Loan repayment thresholds remain frozen until April 2030.

Other measures to note

The temporary repatriation facility tax rate rises from 12% to 15%.

Banks’ Corporation Tax surcharge increases from 3% to 6% for 15 months from January 2027, and Machine Games Duty rises for larger-stake machines from April 2027.

Company distribution reforms and employment income treatment for image rights follow in April 2028.

Mandatory in-year self-employment tax payments are intended from April 2029.

What does the Budget mean for you?

With changes phased across several years, the impact will depend on your circumstances. Frozen thresholds and higher property and savings tax rates are important personal tax headlines; businesses face changes to investment reliefs, payroll and digital reporting.

At Larking Gowen, we’re here to help you understand what these announcements mean for your finances, business and future plans.

Get in touch with your usual Larking Gowen expert, or you can contact us using the options below:

• Call us on 0330 024 0888
• Submit an enquiry here
• Use our live chat service

Chris Maher | Partner in our Private Client Trust and Probate team | Norwich, Norfolk