A week on from the Chancellor’s first Budget, businesses, families and advisers are still digesting the announcements and assessing what the changes could mean in practice.
With the Government committed to its manifesto pledge not to raise taxes for working people, the Chancellor faced limited room for manoeuvre. Nevertheless, the Budget contained a number of significant measures, particularly for savers, landlords, business owners and investors.
Attached is our full analysis of Budget 2026.
Our key takeaways for individuals, families and businesses are:
Individuals and families:
- The Personal Allowance remains at £12,570 and basic rate tax band capped at £37,700 so it is likely we will all be paying more Income Tax.
- However, from 6 April 2027 to 6 April 2030, Pensioners with not pay tax on the value of the new state pension (i.e. £13,079 for 2027/28) but only if their total income is £13,319 or less.
- Income Tax on saving income and property income is increasing by a further 2% from 6 April 2027 to 24% for a basic rate taxpayer, 44% for a higher rate taxpayer and 49% for an additional rate taxpayer
- The cash ISA limit of £20,000 is here to stay for everyone, reversing last year’s announcement that the limit would be cut to £12,000 for under 65’s.
- The Capital Gains Tax ‘Business Asset Disposal Relief (BADR)’ threshold reduces to £500k so if you sell your business assets or your company shares after 5 April 2027, you will pay more CGT.
- The government are consulting on a new 10% CGT rate on £10m of qualifying gains realised by founders / early investors who have made a significant long-term contribution to the creation and development of the UK’s most innovative growth companies. We will know more after 30 November 2026, but the conditions look to significantly narrow the scope of the relief when compared with BADR.
- The trading allowance increases to £3,000 from 6 April 2027. The property allowance remains at £1,000, however.
- From April 2029, payments of income tax on account will be more regular.
Businesses:
- If the full expensing regime does not apply, the annual ‘writing down allowance’ which provides relief for plant, machinery and equipment is being reduced to 12% from April 2027 (although the First-Year Allowance increases to 50% from 1 January 2027).
- HMRC are looking more closely at how profits are extracted from companies – draft legislation will be consulted on next year but in the meantime, plan how you extract your profits and make sure your records are in a good order.
- Company car tax, van benefits, and fuel is increasing, but the business mileage allowance for using your own car has increased to 55p and 35p; if your employer pays you less, you can claim tax relief on the difference.
- Favourable changes have been made to Company Share Ownership Plans (CSOP) – to be renamed as ‘EMI2’ – to attract, retain and incentivise your employees.
- The VAT registration limit of £90k remains but online marketplaces will become responsible for collecting VAT.
A budget for working people?
The National Minimum Wage and National Living Wage will increase, alongside announcements on paid parental leave for the self-employed and measures aimed at narrowing the gender pay gap. However, a number of tax changes elsewhere in the Budget mean that not everyone will feel better off.
Now that the detail of the Budget is being reviewed and the implications are becoming clearer, many individuals and business owners will be considering how the changes could affect their long-term plans and tax position.
Has the Budget changed your financial or business planning?
If you would like to discuss how Budget 2026 may affect you, your family or your business, please do not hesitate to get in touch with a member of our team.
