Chancellor John Healey delivered his first Budget on 28 October 2026. He kept headline business taxes where they were and targeted relief at the high street, energy-intensive manufacturers and fast-growing founders. For most other businesses, the changes that matter most are higher wages, a smaller exit relief and new rules on when tax is paid.

The Budget comes after a summer of change in government, and against a backdrop of higher energy prices and borrowing costs. The government calls it a “breathing space” Budget. It rejects broad tax rises: there’s no increase to corporation tax, income tax, employer National Insurance or VAT.

The relief is targeted, and so are the costs:

Who gains: around 70,000 more retail, hospitality and leisure businesses in England will pay no business rates from April 2027, and eligible energy-intensive manufacturers get cheaper electricity.
Who pays more: employers face a 3.9% rise in the National Living Wage. Owners selling a business lose half of their Business Asset Disposal Relief. Landlords and savers pay more income tax from April 2027.

Several of the biggest changes don’t alter how much tax you pay, but when you pay it. Those land in April 2029 and are worth planning for now.

The measures below are announcements. Most still need to pass through Parliament in Finance Bill 2026-27, and some, including Founders’ Relief, are still being consulted on.

Overview of the measures for business

Business rates relief for retail, hospitality and leisure in England
National Living Wage up 3.9% to £13.21 an hour
No change to corporation tax, income tax, employer National Insurance or VAT rates
50% first-year allowance, and the writing-down allowance cut to 12%
A proposed Founders’ Relief: 10% capital gains tax on up to £10m of gains
Business Asset Disposal Relief lifetime limit halved to £500,000
Property and savings income tax up a further 2 percentage points
EMI2 share option limit doubled to £120,000
£5bn more capacity for the British Business Bank, including £6.5bn more Growth Guarantee Scheme lending
Electricity discounts for energy-intensive manufacturers
Fuel duty, red diesel and HGV road tax cuts extended to July 2027
Online marketplaces to collect VAT for UK sellers from October 2027
Trading allowance tripled to £3,000
Tax payment timing changes from April 2029

Business rates relief for the high street

From 1 April 2027, retail, hospitality and leisure (RHL) properties in England get more generous Small Business Rate Relief:

Full relief applies up to a rateable value of £18,000, up from £12,000.
Tapered relief runs up to £21,000, up from £15,000.

The government expects around 70,000 more businesses to pay no rates at all, including about 3,500 pubs, 3,900 restaurants, 2,200 cafés and 1,700 hairdressers and beauty businesses.

Pubs, social clubs and live music venues see their relief rise from 15% to 35%. Venues with a rateable value of £1m or more keep 15% relief.

Other RHL properties have their bills frozen in real terms for two years. This caps any increase at inflation. It isn’t a cut.

These measures apply in England only. Vape shops and adult gaming centres are excluded. Use our business rate calculator to check your position.

National Living Wage and employer National Insurance

From 1 April 2027, the National Living Wage rises 3.9% to £13.21 an hour for workers aged 21 and over:

Aged 18 to 20: the rate rises to £11.27.
Aged 16 to 17 and apprentices: the rate rises to £8.31.

The government says a full-time worker on the National Living Wage will earn £910 more a year.

Employer National Insurance isn’t changed by this Budget. However, the April 2025 increase stays and the thresholds remain frozen, so any pay rise feeds straight into a higher NI bill. Mandatory payrolling of company cars, vans, fuel and medical benefits starts on 6 April 2027.

Corporation tax and capital allowances

The main rate of corporation tax stays at 25%, and the small profits rate at 19%. Both are confirmed up to the financial year starting 1 April 2028. Full expensing and the Annual Investment Allowance continue.

The main-rate first-year allowance rises from 40% to 50% for spending from 1 January 2027. This mainly helps businesses and assets that full expensing doesn’t cover.

In return, the main writing-down allowance falls from 14% to 12% from April 2027, so relief on existing asset pools arrives more slowly. If you’re planning to buy equipment or vehicles, it’s worth timing the purchase and the asset finance together.

Founders’ Relief and Business Asset Disposal Relief

The government proposes a new Founders’ Relief: a 10% capital gains tax rate on up to £10m of lifetime gains, for disposals from 6 April 2027. The conditions are strict:

The founder held at least 25% of the business when it started trading.
They have held the shares for five years and been UK resident for five years.
The business has annual revenue of at least £10m and at least 15 full-time staff.
It meets two of three growth or R&D tests.

HMRC expects only around 600 people a year to qualify. A founder diluted below 25% by later funding rounds isn’t excluded, as proposed. The consultation closes on 30 November 2026, so every rule could still change.

For most owners, the bigger change is to Business Asset Disposal Relief. Its lifetime limit halves from £1m to £500,000 for disposals from 6 April 2027. Gains above that are taxed at the main 24% rate instead of 18%. On a £1m gain, that means paying £30,000 more.

The government says three-quarters of claimants will still get relief on their whole gain. Anti-forestalling rules apply to sales that straddle 6 April 2027, so if you’re planning an exit, speak to a tax adviser now.

There’s no Unicorn Relief, Repeat Entrepreneur Relief or new reinvestment relief in this Budget.

Property and savings income

Income tax on property and savings income rises by a further 2 percentage points from 6 April 2027, on top of the 2 points announced in 2025. Property income rates become 24%, 44% and 49% in England, Wales and Northern Ireland, and the savings rise applies UK-wide. The cash ISA limit stays at £20,000.

From 6 April 2027:

EMI2 (formerly CSOP): the option limit doubles from £60,000 to £120,000 and the exercise period extends to 15 years.
EMI: the window to exercise after a disqualifying event extends from 90 to 180 days.
Trading allowance: triples from £1,000 to £3,000. It’s an alternative to deducting your actual expenses, so it mainly helps microbusinesses with low costs.

R&D tax relief claims also get simpler. The claim notification form is removed from 1 April 2027, but the qualifying rules and credit rates stay the same.

Funding for SMEs through the British Business Bank and National Wealth Fund

The British Business Bank gets £5bn more capacity, taking its total to £30.6bn. Within that:

Growth Guarantee Scheme: expanded to support £6.5bn more SME lending.
Equity: £1.4bn of new commitments to equity funds.
Venture debt: a new £450m product. Its launch date and criteria are yet to be published.
Community lenders: £165m for Community Development Finance Institutions.

The National Wealth Fund also gets £15.4bn of new capital.

None of this is a grant, and businesses can’t apply to the government for it directly. Lending still goes through accredited providers, each making its own credit decision. Equity reaches businesses through fund managers. The Office for Budget Responsibility’s forecasts point to a phased rollout over this Parliament, not an immediate surge.

Energy, fuel and transport

Funding is confirmed for the British Industrial Competitiveness Scheme. More than 10,000 eligible energy-intensive manufacturers in Great Britain will get 20% to 25% off their electricity bills from April 2027, with a back payment for 2026-27. Eligibility depends on your sector and how much electricity you use, so not every manufacturer qualifies.

Three cuts are extended to 1 July 2027:

the 5p fuel duty cut
the 3.7p red diesel cut
the £1 HGV road tax rate

The fuel duty cut is due to reverse on that date, with an RPI rise, so fuel-heavy businesses should budget for higher costs from summer 2027.

From 6 April 2027, the approved mileage rate is 55p for the first 10,000 business miles and 35p after that, up from 25p.

Online marketplace VAT

From 1 October 2027, online marketplaces will collect VAT on sales by UK VAT-registered sellers, and on sales by any UK business selling more than £90,000 a year through that platform. The platform pays the VAT to HMRC, so sellers receive their money net of VAT.

The VAT registration threshold doesn’t change. Personal sales, second-hand goods and business-to-business sales are excluded. Sellers using invoice finance or other working capital facilities should check how lower gross receipts affect them.

Changes to when you pay tax from 2029

Four reforms change when tax leaves your business without changing the bill:

Self Assessment: taxpayers who make payments on account will move to smaller, more regular in-year payments from April 2029.
VAT and PAYE: a direct debit instruction will be required for return liabilities, from 1 April 2029 for VAT and 6 April 2029 for PAYE.
E-invoicing: VAT invoices must be issued in a specified electronic format from 1 April 2029.
Marketplace VAT: collected at source from October 2027, as above.

If you hold tax money in the business until it’s due, these changes reduce your working capital. A simple monthly transfer into a tax reserve now will make the switch easier.

Looking at the economy

The Office for Budget Responsibility forecasts GDP growth of 1.2% in 2026 and 1.0% in 2027, rising to 1.6% in 2028. It expects inflation to peak at 3.8% in early 2027, before returning to the 2% target in the third quarter of 2028.

Unemployment is forecast to peak at 5.1% in mid-2027, and business investment to fall 0.5% next year. The government meets its stability rule with £15bn of headroom in 2029-30.

At Swoop, we welcome a Budget that holds headline business taxes steady and finally gives the high street meaningful rates relief. But for most SMEs, this is a Budget of rising costs and earlier tax bills. Wages go up again, exit relief is halved, and from 2029 cash leaves the business sooner. Founders’ Relief is a welcome signal, but it reaches only a few hundred people a year. We’d like to see the same ambition for the millions of smaller businesses that keep the economy moving.

Make sense of the Autumn Budget with Swoop

Swoop co-founders Andrea Reynolds and Ciaran Burke joined host Ian Hawkins to break down what the Budget means for business owners, from business rates and wages to Founders’ Relief and the key dates to plan around. Watch the webinar below.

Download the full Budget breakdown

Our Autumn Budget 2026 Business Impact Report covers every measure that affects businesses, who it helps, who it costs and when it starts, checked against the official Budget documents.

Download the report (PDF)

Autumn Budget 2026: frequently asked questions

When does the business rates relief start? On 1 April 2027. Retail, hospitality and leisure properties in England with a rateable value up to £18,000 pay no business rates, with tapered relief up to £21,000.

Has employer National Insurance gone up in the Autumn Budget 2026? No. Employer National Insurance rates and thresholds aren’t changed by this Budget. The April 2025 increase stays and the thresholds remain frozen.

What is the National Living Wage from April 2027? £13.21 an hour for workers aged 21 and over, up 3.9%. The rate for 18 to 20 year olds is £11.27.

Who qualifies for Founders’ Relief? As proposed, founders who held at least 25% of the business when it started trading, have owned the shares for five years and been UK resident for five years. The business must have revenue of at least £10m and at least 15 full-time staff, and meet two of three growth or R&D tests. The rules are under consultation until 30 November 2026.

What is the new Business Asset Disposal Relief limit? £500,000 of lifetime gains for disposals from 6 April 2027, down from £1m. Gains above the limit are taxed at 24%.

Can I apply to the British Business Bank for funding directly? No. British Business Bank lending, including the Growth Guarantee Scheme, goes through accredited providers that make their own credit decisions. Equity is invested through fund managers.

What are the key dates to plan around?

30 November 2026: the Founders’ Relief consultation closes.
1 January 2027: the 50% first-year allowance starts.
1 April 2027: the rates relief and National Living Wage rise take effect.
6 April 2027: the BADR, Founders’ Relief and EMI2 changes take effect.
1 July 2027: the fuel duty cut is due to end.
1 October 2027: marketplace VAT collection starts.
April 2029: the tax payment timing changes begin.

This page explains the Budget and is not tax, legal or financial advice. Measures are subject to legislation and some are still under consultation. Speak to a qualified adviser before acting.

Autumn Budget 2026: what the business rates relief, wage rise and Founders’ Relief mean for your business