Autumn Budget: What's Changed, What's Coming and What It Means For You
WTT Legal

In Partnership with WTT Group

The Chancellor, John Healey, delivered his first Autumn Budget on 28 October 2026, setting out a package of measures under the promise of “Breathing Space now, Hope for the Future.”


With households and businesses continuing to face rising costs, the Chancellor focused on providing some immediate financial support while introducing a number of longer-term tax changes.


For individuals, employers and businesses across the recruitment sector, there are several important announcements to be aware of. From changes to Income Tax and National Insurance to pensions, business investment and Inheritance Tax, the Budget brings a mixture of opportunities and additional considerations.


We've teamed up with WTT Group to highlight the key announcements and explain what they could mean for you.


1. Personal Tax: Frozen Thresholds and Higher Tax Rates

One of the biggest takeaways from the Budget is the continued freeze on several personal tax thresholds until 5 April 2031.


The Personal Allowance will remain at £12,570, while the higher rate threshold stays at £50,270 and the additional rate threshold at £125,140.


With thresholds remaining unchanged, individuals may find themselves paying more tax as their earnings increase over time.


Higher taxes on property and savings income

From 6 April 2027, Income Tax rates on property and savings income will increase.

The new rates will be:

  • Basic rate: 24%
  • Higher rate: 44%
  • Additional rate: 49%


These changes will be particularly relevant to landlords and individuals receiving interest from savings.

Dividend tax rates will also increase from April 2027, with the Dividend Allowance remaining at £500.


The new dividend rates will be 10.75% for basic rate taxpayers, 35.75% for higher rate taxpayers and 39.35% for additional rate taxpayers.


A boost to the Trading Allowance

There is some positive news for individuals with smaller amounts of additional income.


From 6 April 2027, the Trading Allowance will increase from £1,000 to £3,000. The Self Assessment reporting threshold for trading income will increase to the same level.


Changes to ISAs

The government has confirmed that the annual Cash ISA allowance will remain at £20,000 for savers aged 18 and over.


A new First-Time Buyer ISA is also planned for April 2029, replacing the Lifetime ISA for new savers. It will offer a 25% bonus on the final account balance, up to a maximum of £20,000, towards the purchase of a first home costing up to £450,000.


Existing Lifetime ISA holders will be able to continue using their accounts under the current rules.


2. Pensions: Important Changes for Savers and Retirees

Pensions featured prominently in the Budget, with changes affecting both pension contributions and how pension wealth is treated on death.


New Pension Tax Allowance

From 6 April 2027, a Pension Tax Allowance will be introduced for three tax years, covering 2027/28 to 2029/30.

The measure is designed to ensure pensioners whose total income is up to the value of the full new State Pension do not pay Income Tax.

The full allowance will effectively be based on the new State Pension value of £13,037, with the allowance reducing as income increases.


Unused pension funds brought into Inheritance Tax

One of the more significant announcements is the decision to bring unused pension funds and certain pension death benefits into an individual's estate for Inheritance Tax purposes. This change will take effect from 6 April 2027.


Previously, unused pension funds could often sit outside an individual's estate for Inheritance Tax purposes. Under the new rules, this could result in a significantly higher tax bill for some families.


WTT Group highlights an example in its briefing: an individual with a £400,000 pension fund and a £1 million estate could see their Inheritance Tax bill increase from £270,000 to £430,000 under the new rules. This makes reviewing pension arrangements and wider estate planning increasingly important.


3. Employment: National Minimum Wage and Salary Sacrifice Changes

Employers will need to prepare for several changes to payroll, employee benefits and pension arrangements.


National Minimum Wage increases

From 1 April 2027, the National Living Wage and National Minimum Wage will increase.

The new hourly rates will be: Age groupHourly rateAged 21 and over£13.21Aged 18–20£11.27Aged 16–17£8.31Apprentices£8.31


Employers should factor these increases into their payroll budgets and workforce planning.


Salary sacrifice pension changes

From April 2029, the National Insurance exemption on employee pension contributions made through salary sacrifice will be capped at £2,000 per year.


Contributions above this amount will be subject to employer and employee National Insurance Contributions.


Importantly, pension contributions will continue to be exempt from Income Tax, subject to the usual limits, and employer pension contributions will remain free of NICs.


Employers offering salary sacrifice arrangements should begin considering the potential impact on their payroll processes and employee benefits.


Changes to employee benefits

Mandatory payrolling of benefits in kind will be introduced in phases.


From April 2027, this will cover company cars, car fuel, vans, van fuel and employer-provided medical benefits.


Most other benefits in kind will move to mandatory payrolling from April 2028, although loans and accommodation will remain voluntary.


Mileage allowance increases

There is also some positive news for employees using their own vehicles for business travel.


The mileage rate for the first 10,000 business miles increased from 45p to 55p from 6 April 2026.

From 6 April 2027, the rate for business mileage above 10,000 miles will increase from 25p to 35p.


4. Business Tax: Corporation Tax Remains Stable

For businesses, the Chancellor confirmed that Corporation Tax rates will remain unchanged from April 2027.

The main rates will continue to be:

  • 25% for companies with profits over £250,000.
  • 19% for companies with profits of £50,000 or less.
  • Marginal relief for companies with profits between £50,001 and £250,000.


The government has also committed to capping the main Corporation Tax rate at 25% for the duration of the Parliament.


Changes to capital allowances

Businesses investing in equipment and other qualifying assets should take note of changes to capital allowances.


From 1 January 2027, the First Year Allowance for qualifying main-rate assets will increase from 40% to 50%.


However, the main rate Writing Down Allowance will reduce from 14% to 12% from April 2027. The Annual Investment Allowance will remain at £1 million. For businesses planning significant investment, the timing and nature of expenditure could therefore make a difference to the tax relief available.


5. Capital Gains Tax and Inheritance Tax: Reliefs Tighten

The Budget also introduced changes to several capital tax reliefs, particularly those affecting business owners and individuals planning to pass on wealth.


Business Asset Disposal Relief

The lifetime limit for Business Asset Disposal Relief (BADR) will be reduced from £1 million to £500,000 for qualifying disposals made on or after 6 April 2027.


The rate of Capital Gains Tax for individuals claiming BADR and Investors' Relief will remain at 18% for 2027/28.


For business owners considering a sale or exit, the reduction in the lifetime limit makes reviewing the timing and structure of a potential disposal particularly important.


New Founders' Relief

There is also a proposed new relief for founders and significant early investors in high-growth, innovative UK companies.


Founders' Relief is intended to apply a 10% Capital Gains Tax rate to qualifying share disposals, subject to a lifetime limit of £10 million of gains per individual.


It is expected to apply to qualifying disposals from 6 April 2027, with further detail to follow following consultation.


Agricultural and Business Property Relief

The Budget confirmed that qualifying agricultural and business property will continue to benefit from 100% Inheritance Tax relief up to a combined limit of £2.5 million per person.


Qualifying property above this limit will benefit from 50% relief.


The allowance will be transferable between married couples and civil partners and will remain frozen until 5 April 2031.


6. Other Important Announcements

There were several additional announcements that individuals and businesses should be aware of.


VAT changes

The VAT registration threshold will remain at £90,000, with the deregistration threshold staying at £88,000.

From October 2027, online marketplaces will become responsible for collecting VAT on certain sales made by UK businesses using their platforms.

Mandatory electronic VAT invoicing is also planned from April 2029.


High Value Council Tax Surcharge

From April 2028, residential properties valued at £2 million or more will become liable for an additional High Value Council Tax Surcharge.


Electric Vehicle Excise Duty

From 1 April 2028, Electric Vehicle Excise Duty will apply to battery electric vehicles, plug-in hybrid vehicles and hydrogen fuel cell vehicles.


The announced rates are:

  • 3p per mile for battery electric and hydrogen fuel cell vehicles.
  • 1.5p per mile for plug-in hybrid vehicles.


Key Dates to Put in Your Diary

There are several important implementation dates arising from the Budget

29 October 2026 - Lifetime ISA withdrawal charge reduced from 25% to 20% for qualifying purchases above the property cap.

1 January 2027 - First Year Allowance increases to 50%.

1 April 2027 - National Minimum Wage increases.

6 April 2027 - Higher rates on property and savings income; Business Asset Disposal Relief (BADR) lifetime limit reduced.

6 April 2027 - Unused pension funds brought into Inheritance Tax.

April 2028 - High Value Council Tax Surcharge introduced.

April 2028 - Electric Vehicle Excise Duty introduced.

April 2029 - £2,000 NIC exemption cap introduced on salary-sacrificed pension contributions.

April 2029 - Mandatory VAT e-invoicing introduced.


What Does the Autumn Budget Mean for You?

The Autumn Budget 2026 delivers a combination of immediate support and longer-term tax changes.


While some measures offer welcome relief, including increases to the Trading Allowance and First Year


Allowance, frozen personal tax thresholds and changes to pension and capital tax reliefs will require careful consideration.


For recruitment businesses in particular, changes to the National Minimum Wage, payroll reporting, salary sacrifice and business investment allowances are worth reviewing sooner rather than later.


The key message is to understand which changes affect you, when they take effect and whether there are any planning opportunities ahead of implementation.


Need advice on how the Autumn Budget could affect you or your business?

WTT Group provides specialist tax, legal, accountancy and tax investigation services, with particular expertise in the recruitment sector.

For further information, contact Clarke Bowles, Group Commercial Director, at clarke.bowles@wttgroup.co.uk or visit wttgroup.co.uk.


Access the document here: WTT Group - Autumn Budget


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