Blog | by Rob Young | November 2026
Autumn Budget 2026: What It Actually Means for Company Directors
Rob Young
The Autumn Budget was announced on Wednesday 28 October 2026 and after weeks of speculation we finally know what actually changed. We held off writing a reaction post until the detail was confirmed because guessing at Budget outcomes helps nobody and we'd rather give you something you can actually plan around. Below is what we believes matters most if you run a limited company or own shares in one: the property and savings income tax rise, the cut to Business Asset Disposal Relief alongside a brand new Founders' Relief and the changes to capital allowances. We've left out the measures that don't affect most of our clients and flagged clearly where something is still only proposed rather than confirmed law.
What actually changed for property and savings income?
From 6 April 2027 income tax rates on property income and savings income rise to 24% at basic rate, 44% at higher rate and 49% at additional rate, up from today's 20%, 40% and 45%. That is a 4 percentage point rise in total, and it is worth explaining why the number is bigger than you may have seen reported elsewhere: Budget 2025 had already penciled in a 2 point rise to 22%, 42% and 47% from the same date and this Budget added a further 2 points on top before that earlier change had even taken effect. The practical result is that nothing changes in two steps and what lands in your April 2027 tax position is the full 4 point jump in one go.
For a director with a buy-to-let or a portfolio of savings sitting outside an ISA, this is worth modelling now rather than in March 2027. If you're a higher rate taxpayer with rental profit, say £20,000 a year, the move from 40% to 44% adds £800 a year in tax on that income alone, and it stacks with whatever else is happening to your personal allowance and wider earnings. The government has also said it will work with the Scottish and Welsh governments on property income rates in line with their existing income tax powers, so if you hold property outside England and Northern Ireland, the rate that eventually applies to you could diverge further.
Selling the business: Business Asset Disposal Relief is being cut in half
If you've been planning to sell your company, or you're already mid-negotiation, this is the change to read twice. Business Asset Disposal Relief lets you tax a lifetime limit of qualifying gains at a reduced rate rather than the standard capital gains rates. That reduced rate is already 18%, having risen in stages from the historic 10% rate over the past couple of years, so don't assume the old 10% figure still applies if you've seen it quoted elsewhere. The part that's genuinely new this Budget is the lifetime limit which currently sits at £1 million, and from 6 April 2027 it is cut to £500,000. Gains above the limit are taxed at the standard higher rate of capital gains tax, currently 24%, so for an owner with a gain comfortably above £500,000, this could mean tens of thousands of pounds more tax on the same sale simply because of when it completes.
There are transitional provisions for certain contracts already agreed before the change and for some share reorganisations, which is exactly the kind of detail worth a conversation with us before you assume either that you're protected or that you're not. If a sale is realistically on the horizon in the next two to three years, it's worth at least running the numbers on completing before 6 April 2027 versus after, because (usually around the point a potential sale starts to feel real rather than theoretical) that's when the maths actually starts to matter.
A new Founders' Relief, but it's not law yet
Alongside the Business Asset Disposal Relief cut, the government announced a new Founders' Relief, also at a 10% capital gains tax rate, with a considerably larger £10 million lifetime limit. It's aimed at genuine company founders rather than every shareholder: to qualify you'll need to have held at least 25% of the company's ordinary share capital from when its trade started (or from when preparations for that trade began), held your shares for at least 5 tax years before you sell, and been UK tax resident for at least 5 continuous tax years before the disposal.
However we want to be straightforward about where this stands as it is an announced policy, not finished legislation. A technical consultation on how the relief will actually work launched on 28 October 2026 (the same day as the Budget) and the detail will be introduced through amendments to the Finance Bill 2026. The broad shape is clear enough to plan around, but the fine print, including exactly how the shareholding and residence tests will be tested in practice, could still move before it becomes law from 6 April 2027. We are currently treating it as something to watch and factor into long-range planning, not something to bank on yet.
What's changing in capital allowances, and what hasn't
If your business buys plant, machinery or equipment, two rates are moving, and they move on different dates. That is where people usually trip up.
The main rate writing down allowance (WDA) falls from 14% to 12%. It starts on 1 April 2027 for limited companies and 6 April 2027 for sole traders. If your accounting period straddles that date, you get a blended rate for the period rather than a clean switch to 12%.
The main rate first year allowance (FYA) goes the other way, rising from 40% to 50% for qualifying plant and machinery expenditure incurred from 1 January 2027. That date is the same for companies and sole traders, and it arrives earlier than the WDA change. Most limited companies buying new main rate assets will still use full expensing (100% relief), so the 50% FYA matters mostly for sole traders, partnerships and leasing businesses. It doesn’t cover second-hand assets, cars or assets leased overseas.
The £1 million Annual Investment Allowance (AIA) is unchanged. It gives 100% relief on qualifying spend in the year it’s incurred, whatever happens to the rates above, so it remains the first place to look for most equipment purchases. It doesn’t cover cars. Companies buying new main rate assets should also check full expensing.
The headline rate of corporation tax didn’t move. It stays at 25% for profits above £250,000 and 19% for profits of £50,000 or less, with marginal relief in between. Those thresholds are divided between associated companies. There was a lot of search interest before the Budget in whether the rate would change, so to be clear: it didn’t.
Two things worth a quick mention while we're here
The HMRC mileage rate for the first 10,000 business miles has actually been 55p per mile, up from the long-standing 45p, since 6 April 2026, so if you're still reimbursing or claiming at the old 45p rate seven months into the tax year, it's worth checking your payroll or expenses process is using the current figure. What is genuinely new from this Budget is that the 55p rate has now been made permanent, and the lower rate that applies above 10,000 business miles is rising too, from 25p to 35p per mile, from 6 April 2027.
The National Living Wage is also rising again, to £13.21 an hour from April 2027, a 3.9% increase, with the 18 to 20 rate moving to £11.27. We've covered what that means for employers in a separate post, since the planning involved (payroll budgets, pricing, rota decisions) deserves its own space rather than a paragraph here.
A quick comparison of the headline changes
| Change | Before | From 6 April 2027 | Who it affects |
|---|---|---|---|
| Property & savings income tax (basic/higher/additional) | 20% / 40% / 45% | 24% / 44% / 49% | Directors with rental income or taxable savings outside an ISA |
| Business Asset Disposal Relief lifetime limit (rate stays 18%) | £1,000,000 | £500,000 | Owners selling a qualifying business or shares |
| Founders' Relief lifetime limit (new, proposed) | Doesn't exist yet | £10,000,000 at 10% | Founders meeting the 25% shareholding, 5-year hold and 5-year residence tests |
| Main rate writing down allowance | 14% | 12% | Businesses with plant & machinery on the main pool |
| Main rate first year allowance (from 1 Jan 2027) | 40% | 50% | Businesses buying qualifying plant & machinery |
| Mileage rate above 10,000 business miles | 25p | 35p | Anyone claiming mileage for business travel |
What should you actually do about this?
None of this needs a decision from you today, but a few things are genuinely worth a conversation with us before the new tax year. If you're a director with rental property or significant savings outside an ISA, it's worth modelling the full 4 percentage point rise into your 2027/28 budgeting now rather than when the bill arrives. If a sale of your business is realistically possible in the next two to three years, the Business Asset Disposal Relief cut (and the still-developing Founders' Relief) changes the maths on timing enough that it belongs on the agenda at your next catch-up with us. And if you're planning equipment purchases, the Annual Investment Allowance is still almost always the right place to start, regardless of what's happening to the rates either side of it.
These conversations fall squarely inside the regular work we already do for our clients: this is exactly the kind of planning our quarterly catch-up calls are for, as part of your regular fixed monthly fee, not a separate add-on service. If you'd like to talk through what any of this means for your specific situation, get in touch via our website and we'll get a call booked in.
Frequently Asked Questions.
It's announced government policy with a clear proposed start date of 6 April 2027, but it isn't law yet. A technical consultation launched on Budget day and the detail will be finalised through the Finance Bill 2026, so some of the conditions could still change before then.
I'm planning to sell my company in the next year. Does the Business Asset Disposal Relief cut affect me?
Possibly, depending on your gain and completion date. The lifetime limit drops from £1 million to £500,000 from 6 April 2027, with some transitional protection for contracts already agreed. If a sale is realistically on the table, talk to us about timing before you assume either way.
The Annual Investment Allowance lets most businesses claim 100% tax relief on qualifying plant and machinery spend, up to £1 million a year, in the year it's incurred. It wasn't changed at this Budget and remains the first allowance to check before worrying about writing down or first year allowance rates.
Need help working out what this means for you?
Every business is affected by a Budget differently depending on what you own, what you're planning and how your income is structured. If you'd like us to run through what these changes mean for your specific circumstances, whether that's a property portfolio, a possible business sale, or an equipment purchase you've been planning, get in touch via our website and we'll book in a call. If energy costs are also on your mind going into the new year, we can also introduce you to a trusted broker partner who reviews business gas and electricity bills for free, looking for savings.
Author
Rob Young
Rob is Managing Director at LYA, supporting ambitious businesses to scale with confidence through clear planning and proactive financial insight.
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