The Budget in five numbers

The Chancellor delivered the Budget at 12.30pm on Wednesday 28 October 2026. We read the Treasury documents rather than the speech. This is the full version of our Budget special, with the rates for next year, worked examples in pounds and the document every figure comes from.

The rates for 2027 to 2028 on one page

Annex A of the overview of tax legislation and rates sets out every rate and allowance for the tax year that starts on 6 April 2027. These are the ones an owner managed business works with, today’s figure beside next year’s.

Income tax and national insurance

Rates in percent. Source, Annex A, rates and allowances.

Companies, employers and capital

Highlighted rows changed in this Budget. Sources, Annex A, measures 1.5, 1.32, 1.33 and 1.42 of the overview, and section 4.5 of the Budget document.

If you work for yourself

The first £3,000 of trading income is yours tax free from 6 April 2027, three times today’s £1,000, and the Self Assessment reporting threshold moves to £3,000 with it (measure 1.5). A side business that takes £2,800 in a year has nothing to declare from then, where today £1,800 of it is taxable, which is £360 of income tax for a basic rate taxpayer.

For a full time sole trader the rates do not move. On £40,000 of profit in 2027 to 2028 the income tax is £5,486 and class 4 national insurance is £1,646, exactly as this year, because the personal allowance, the bands and the 6 percent class 4 rate are all unchanged.

Mileage is where the money is. The 55p rate for the first 10,000 business miles is now permanent and every mile above that is worth 35p from 6 April 2027 instead of 25p (measure 2.7).

55p for the first 10,000 miles, then 25p today and 35p from 6 April 2027.

Anyone who joins Making Tax Digital for Income Tax in April 2027 has a first year with no penalty points on late quarterly updates (measure 2.37 and 2.36), and from April 2029 Self Assessment payments on account move to smaller, more regular payments through the year, with an option to pay through PAYE (measure 2.31).

If you run a company and pay yourself in salary and dividends

The plan you use today still works for 2027 to 2028. Corporation tax stays at 19 percent up to £50,000 of profit and 25 percent above £250,000, the dividend allowance stays at £500, and dividend rates stay at 10.75, 35.75 and 39.35 percent.

No other income. The first £500 of dividends is covered by the dividend allowance.

Equipment, vans and machinery up to £1 million a year are still deducted in full in the year they are bought. A company that spends £60,000 on kit takes £60,000 off its profit in that year, worth £11,400 of corporation tax at 19 percent or £15,000 at 25 percent. Above the £1 million, the main rate first year allowance rises from 40 to 50 percent for spending from 1 January 2027 (measure 1.42).

Research and development claims made from 1 April 2027 no longer need the claim notification form (measure 1.47). Share schemes get simpler too. The company share option plan limit rises to £120,000 from 6 April 2027 and EMI options granted from that date are reported on the year end return instead of within 92 days (measures 1.6 and 1.7).

Changes to how company distributions are taxed will be consulted on first, with draft legislation in 2027 and nothing starting before April 2028 (measure 2.15).

If you employ people

Employer’s national insurance stays at 15 percent above £5,000 a year and the employment allowance stays at £10,500. The National Living Wage rises 3.9 percent to £13.21 an hour from 1 April 2027, and the rate for 18 to 20 year olds to £11.27 (Budget 2026, section 4.5).

For five such employees the extra cost is £5,606 a year, £4,875 of pay and £731 of employer national insurance. Employer NI for the five comes to £15,570, and for a business that qualifies the employment allowance covers £10,500 of it.

Mileage paid to staff at 35p a mile above 10,000 miles is free of tax and national insurance from 6 April 2027. From the same date cars, vans, fuel and private medical cover are reported through payroll rather than on P11D forms (measure 1.24), so the year end benefits form goes for most small employers.

Two changes follow in April 2028. Fixed subsistence rates of £20 for a trip over five hours, £60 over ten hours and £75 over twenty four hours replace today’s more complicated scale (measure 2.8), and employees will claim work expenses through PAYE, with the £2,500 Self Assessment threshold removed (measure 2.9).

If you let property

Rent received up to 5 April 2027 is still taxed at 20, 40 and 45 percent, and the £12,570 personal allowance and the £3,000 capital gains exempt amount are untouched. From 6 April 2027 property income has its own rates of 24, 44 and 49 percent (measure 1.2).

Profit after allowable costs, for a landlord whose other income already uses the personal allowance.

Allowable costs, repairs and agents’ fees are deducted at whatever rate applies in the year they fall. Landlords who join Making Tax Digital in April 2027 have the same first year without penalty points on late quarterly updates. A new surcharge on homes worth £2 million or more starts in April 2028 (measure 1.22).

If you are thinking of selling a business

Business asset disposal relief keeps its 18 percent rate, but the lifetime limit halves from £1 million to £500,000 for disposals on or after 6 April 2027, with transitional rules (measure 1.33). Gains above the limit are taxed at the 24 percent higher rate.

The annual exempt amount is left out to keep the figures clean.

A new founders’ relief arrives from 6 April 2027, a 10 percent rate on up to £10 million of lifetime gains for eligible founders and early investors in high growth companies (measure 1.32 and Annex A). The technical consultation closes on 30 November 2026, so who qualifies is still being settled.

Pensions, savings and inheritance

The pensions annual allowance stays at £60,000, the money purchase annual allowance at £10,000 and the lump sum allowance at £268,275. Pensioners whose income is at or below the full new State Pension will not be brought into income tax by the new Pension Tax Allowance from April 2027 (measure 1.4).

The cash ISA limit stays at £20,000, and the Lifetime ISA withdrawal charge for a home above the price cap falls from 25 to 20 percent from 29 October 2026 (measure 2.4).

Inheritance tax nil rate bands stay at £325,000 and £175,000. Unused pensions come into inheritance tax from 6 April 2027 as already legislated, and personal representatives will be able to direct the pension scheme to pay the tax (measure 1.27). The two year rule on pension death benefits is removed for payments from 28 October 2026 (measure 1.18).

What did not change

Income tax rates and bands, national insurance rates, the employment allowance, corporation tax, dividend tax, the £500 dividend allowance, the £3,000 capital gains exempt amount, the £90,000 VAT threshold, the £1 million annual investment allowance and full expensing all stay as they were this morning.

The 5p fuel duty cut is extended to 30 June 2027 with the inflation rise deferred to 1 July 2027 (measure 2.18). Retail, hospitality and leisure properties in England have business rates frozen in real terms for two years from April 2027, and a higher small business rate relief threshold takes around 70,000 more businesses out of business rates altogether (Budget 2026, section 1.2).

Dates for the diary

What to do before April

1. Start a mileage log now. Every business mile above 10,000 is worth 35p from 6 April 2027 instead of 25p, so a 20,000 mile year is worth £1,000 more in claims.
2. Put £13.21 into next year’s payroll forecast and confirm the employment allowance is claimed. The allowance is worth up to £10,500 a year off employer’s national insurance.
3. If a sale of the business is in view, plan the timing before 6 April 2027. On a £1 million gain the difference is £30,000 of tax.
4. Landlords, take stock of costs and repairs for this tax year. Property income moves from 20, 40 and 45 percent to 24, 44 and 49 percent on 6 April 2027.
5. Check what equipment the business needs this year. The £1 million annual investment allowance means it comes off profit in full in the year it is bought.

General information for UK businesses, not advice about your own position. Speak to a qualified adviser before you act.

Sources. Budget 2026, HM Treasury, 28 October 2026. Overview of tax legislation and rates, with the measure numbers quoted above. Annex A, rates and allowances. Budget 2026, breathing space for today, hope for the future. Worked examples are ours, calculated from those rates.

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