Autumn Budget 2026: 25 Key Business Tax and Legislative Changes You Need to Know

The Autumn Budget 2026 introduces several important changes that could affect businesses, employers, entrepreneurs and self-employed individuals across the UK.

From business rates relief and mileage allowances to capital gains tax, VAT, research and development incentives and new reporting requirements, the announcements include measures that businesses should start preparing for.

Some of these policies had been announced previously, but have now been confirmed as part of the Autumn Budget.

Here are 25 important business-related changes, grouped by topic, that UK businesses should be aware of.

Business Rates and Financial Support

1. Increased Business Rates Relief for Pubs and Entertainment Venues

Pubs, social clubs and live music venues will benefit from an increase in business rates relief from 15% to 35%. The change will take effect from 1 April 2027, providing additional support to eligible businesses.

2. Higher Thresholds for Small Business Rate Relief

Retail, hospitality and leisure businesses will benefit from higher valuation thresholds for Small Business Rate Relief from 1 April 2027. The threshold for 100% relief will increase from £12,000 to £18,000, while the tapered relief threshold will rise from £15,000 to £21,000.

3. Transitional Support for Businesses Facing Higher Rates

A new transitional support package will help businesses manage changes to their business rates. This includes a two-year real-terms freeze on bills for retail, hospitality and leisure businesses and a one-year extension of the 2023 Supporting Small Business scheme. The measures will be partly funded by extending the Transitional Relief Supplement for two years from April 2027.

4. Greater Business Rates Powers for Mayoral Authorities

From April 2027, Mayoral Strategic Authorities will receive a share of business rates income and future growth. This will give local authorities greater financial flexibility to support regional development.

5. Removal of Business Rates Relief for Certain Businesses

Vape shops and Adult Gaming Centres will lose their existing business rates relief from 1 April 2027.

Tax Allowances and Business Expenses

6. Increase in the Trading Allowance

The Income Tax Trading Allowance will increase from £1,000 to £3,000 from 6 April 2027. This will provide additional tax-free income allowance for individuals earning money from small trading activities.

7. Higher Mileage Allowance Rates

The tax-free and tax-deductible mileage rate for cars and vans will increase to 55p per mile for the first 10,000 business miles from 6 April 2026. The higher mileage rate for additional business miles will increase from 25p to 35p from 6 April 2027.

8. Changes to Employment Expenses Claims

The £2,500 threshold for employment expenses claims through Self Assessment will be removed from 6 April 2028, simplifying the process for employees claiming eligible work-related expenses.

9. Changes to Property Income Tax Rates

Income tax rates on property income will increase by two percentage points across the basic, higher and additional rate bands from 6 April 2027. Landlords and property investors should review how this could affect their future tax liabilities.

Capital Gains Tax and Business Ownership

10. Reduction in Business Asset Disposal Relief Lifetime Limit

The lifetime limit for Business Asset Disposal Relief (BADR) will be reduced to £500,000 from 6 April 2027. Business owners planning to sell or dispose of qualifying business assets should consider the potential impact on their tax planning.

11. New Capital Gains Tax Relief for Business Founders

A new Capital Gains Tax relief will be introduced for qualifying founders of innovative, high-growth companies from 6 April 2027. The measure aims to support entrepreneurship and encourage investment in growing businesses.

12. Modernisation of the Distributions Framework

The rules governing company distributions will be updated from 6 April 2028. Companies and shareholders should keep an eye on the revised framework and assess whether it affects their existing arrangements.

Corporation Tax, Investment and Business Growth

13. Changes to Capital Allowances

The main rate of writing-down allowances will reduce to 12% from April 2027. However, the main rate First Year Allowance will increase to 50% from 1 January 2027, changing the timing and amount of tax relief available on qualifying business investments.

14. Abolition of Advance Corporation Tax

Advance Corporation Tax (ACT) will be abolished from 1 April 2031 as part of the planned changes to the corporation tax framework.

15. Changes to Foreign Permanent Establishment Exemption

The foreign permanent establishment exemption will become mandatory for accounting periods beginning on or after 1 January 2027. This will prevent businesses from using foreign branch losses to reduce their UK Corporation Tax liabilities.

16. Additional Funding Through the British Business Bank

The British Business Bank will expand its Growth Guarantee Scheme to support an additional £6.5 billion of SME lending across the current Parliament. This is intended to improve access to finance for small and medium-sized businesses.

Research, Development and Employee Incentives

17. Simplification of R&D Tax Relief Claims

Businesses claiming Research and Development tax relief will benefit from changes to the claims process. The Claim Notification Form will be removed from 1 April 2027, while the Additional Information Form will be simplified from Autumn 2027.

18. Improvements to Enterprise Management Incentives (EMI2)

Changes to the Enterprise Management Incentives scheme will increase the individual share option limit to £120,000 and extend the exercise period to 15 years from 6 April 2027. The interaction with the EMI option limit will also be removed, providing eligible businesses with greater flexibility when offering share incentives to employees.

VAT, PAYE and Digital Compliance

19. Mandatory Electronic Invoicing

HMRC will require VAT invoices to be issued in a specified electronic format from 1 April 2029. Businesses should start reviewing their accounting systems and invoicing processes to prepare for the new requirements.

20. Direct Debit Requirements for VAT and PAYE

Businesses will be required to use direct debit arrangements for VAT return liabilities from 1 April 2029 and PAYE return liabilities from 6 April 2029. Employers and businesses should consider how these changes will affect their payment processes.

21. Greater HMRC Powers to Recover Tax Debts

From July 2029, HMRC will be able to recover certain lower-value tax debts directly from the bank accounts of taxpayers who can afford to pay but repeatedly fail to settle their liabilities.

22. Changes to Online Marketplace Liability

The rules governing online marketplace liability will be extended to UK businesses, subject to a minimum annual sales threshold of £90,000 per platform. The changes will take effect from 1 October 2027.

Transport and Other Sector-Specific Changes

23. Extension of the Fuel Duty Cut

The temporary 5p-per-litre fuel duty reduction will be extended, with the planned Retail Prices Index (RPI) increase deferred until 1 July 2027. This will provide continued support to businesses that depend on vehicles for their operations.

24. Reduced Vehicle Excise Duty for Heavy Goods Vehicles

Heavy Goods Vehicles (HGVs) will benefit from a reduced Vehicle Excise Duty rate of £1 for 12 months from 1 July 2026, providing temporary relief for eligible vehicle operators.

25. VAT Treatment of Temporary Medical Staffing

The government will amend Group 7 of Schedule 9 to the VAT Act 1994 to restore the VAT treatment of medical deputies to its previously intended position. This change is particularly relevant to businesses and organisations involved in temporary medical staffing.

What Should Businesses Do Next?

The Autumn Budget 2026 includes changes that will take effect over several years. While some measures provide opportunities for tax savings and financial support, others will require businesses to review their accounting systems, compliance procedures and tax planning strategies.

Business owners should pay particular attention to changes affecting business rates, capital allowances, property income, VAT invoicing and HMRC payment requirements.

Planning ahead and seeking appropriate professional advice can help businesses understand their obligations, make informed financial decisions and prepare for the upcoming changes.