Published 30 October 2026 | By Accounting On You
The Autumn Budget 2026 was announced on 28 October, bringing changes to wages, tax allowances, sole trader income, property taxation and the way some businesses handle VAT.
But what does it actually mean for you?
At Accounting On You, we've broken down the main announcements affecting UK small businesses, company directors, employers and self-employed individuals, without the complicated jargon.
1. Minimum wage is increasing from April 2027
From 1 April 2027, the National Living Wage for employees aged 21 and over will increase to £13.21 per hour, a 3.9% rise.
The minimum wage for 18 to 20-year-olds will increase to £11.27 per hour.
This is welcome news for employees receiving a pay rise, but it also means higher employment costs for businesses.
For employers, increasing gross wages can mean additional employer National Insurance and pension contributions.
What should businesses do?
Review staff salaries and hourly rates.
Forecast the additional payroll costs from April 2027.
Check that prices, cash flow and profit margins can support increased staffing costs.
Review any commitments to wider salary increases.
2. The personal tax allowance remains frozen
The standard personal allowance remains at £12,570.
That means the amount most people can earn before paying income tax isn't increasing alongside minimum wage.
As wages increase, some employees may pay more income tax even though their earnings have only increased in line with rising costs.
This is sometimes referred to as fiscal drag.
Our CEO's perspective
As a business owner who employs people, this is something I feel quite strongly about.
I'm absolutely in favour of people earning more. I've committed to increasing my own team's salaries in line with minimum wage.
But I also think we need to recognise the costs that come with those decisions.
Businesses aren't just paying higher wages. They're dealing with employer National Insurance, pension contributions and other operating costs.
Meanwhile, frozen tax thresholds mean employees don't necessarily keep all of the additional money they earn.
I think it's important that we have a conversation about supporting both employees and the businesses employing them.
Maria, CEO of Accounting On You
3. Sole traders benefit from a higher trading allowance
From 6 April 2027, the trading allowance increases from £1,000 to £3,000.
This means qualifying individuals can receive up to £3,000 of trading or miscellaneous income without paying income tax on that income.
This could benefit people earning smaller amounts from side businesses, freelance work or occasional trading activities.
However, the allowance is based on qualifying income, not simply profit, and claiming it may not be advantageous if your actual expenses are higher.
Other tax reporting obligations may still apply.
What should sole traders do?
Review whether claiming the trading allowance or deducting actual business expenses would give the better outcome.
4. Business Asset Disposal Relief is being reduced
From 6 April 2027, the lifetime limit for Business Asset Disposal Relief (BADR) will fall from £1 million to £500,000.
BADR provides a reduced Capital Gains Tax rate of 18% on qualifying business disposals.
For business owners considering selling their company, this reduction could increase the tax payable on a future sale.
What should company directors do?
If you're planning to sell or exit your business, seek professional tax advice before making decisions about the timing or structure of a disposal.
5. Landlords face higher property income tax rates
From 6 April 2027, the announced property income tax rates will be:
Basic rate: 24%
Higher rate: 44%
Additional rate: 49%
This could increase personal tax liabilities for landlords receiving taxable rental income.
The impact will depend on individual circumstances, including total income, allowable expenses and the ownership structure of the property.
What should landlords do?
Review projected rental profits and put money aside for potential higher tax bills.
6. Business rates relief is expanding
The Budget includes additional business rates support for qualifying retail, hospitality and leisure businesses in England.
Small Business Rate Relief thresholds are increasing, with further support intended for businesses facing high property costs.
For local businesses in Sheffield, Rotherham and across South Yorkshire, this could make a meaningful difference.
However, the relief available will depend on the premises, rateable value and eligibility conditions.
What should businesses do?
Review your business rates bill and check whether the new arrangements could reduce your liability from April 2027.
7. VAT rules for online marketplaces are changing
From October 2027, online marketplaces will become responsible for collecting VAT on certain sales by UK businesses.
The announced measures cover qualifying sales by UK VAT-registered businesses and other UK businesses meeting the relevant marketplace sales threshold.
This is particularly important for online retailers, e-commerce brands and businesses selling through third-party platforms.
What should e-commerce businesses do?
Review sales by marketplace, VAT registration status and accounting processes ahead of implementation. Further technical guidance will be important.
8. Making Tax Digital continues
Making Tax Digital for Income Tax is continuing, with further taxpayers joining in April 2027.
The government has announced a first-year late-submission penalty easement for the first four quarterly updates of taxpayers joining in April 2027.
Importantly, this does not remove the requirement to submit quarterly updates.
What should sole traders and landlords do?
Check when MTD will apply to you and make sure your bookkeeping and software are ready.
9. Further changes to tax administration
The government has also announced longer-term changes, including electronic VAT invoicing requirements and more regular Income Tax Self Assessment payments from 2029.
These are not immediate changes for most businesses, but they reinforce the importance of keeping accounting records up to date and planning for tax liabilities throughout the year.
So, what should your business do following the Autumn Budget?
Our advice is not to make rushed decisions based on headlines.
Instead:
Review how the announcements affect your particular business.
Update cash flow forecasts for any higher staffing or tax costs.
Check upcoming compliance deadlines.
Plan ahead for changes starting in April 2027.
Speak to your accountant before making major tax or business-structure decisions.
How Accounting On You can help
At Accounting On You, we support limited companies, sole traders, online businesses, personal trainers, online coaches and local businesses with more than just year-end accounts.
Our ongoing support includes bookkeeping, tax planning, management information and finance trackers, helping business owners understand their numbers and plan ahead.
We're based in Sheffield and support businesses throughout the UK.
Want to understand how the Autumn Budget affects your business?
Get in touch with the Accounting On You team to discuss your accounting and tax-planning needs.
Website: www.accountingonyou.com
Official sources
HM Treasury: Budget 2026, published 28 October 2026
HMRC: Budget 2026 Overview of Tax Legislation and Rates
This article summarises government announcements as at 30 October 2026. Some measures remain subject to legislation and further guidance. It is general information and should not be treated as personalised tax advice.