Our verdict on the Autumn Budget is 4 out of 10 - underwhelming, and a missed opportunity to bring real momentum to the economy.
The Chancellor kept the headline rates of income tax, National Insurance, VAT and capital gains tax where they were, but he gave business no real reason to invest or expand, and he has raised the tax bill for landlords, savers and anyone selling a company.
Much of the cost is deferred, with most measures starting in April 2027 or later, and the legislation is still to come, so please treat the detail below as provisional. I have read the official legislation overview and the consultation papers, not just the headlines, and where a point is not clear-cut I say how confident I am. I am also deliberately sceptical wherever a measure means more tax for you.
If you own or plan to sell a business
Business Asset Disposal Relief is halved. The lifetime limit on gains taxed at the reduced 18% rate falls from £1 million to £500,000 for disposals from 6 April 2027. The Chancellor says this makes no difference to three in four claimants, but those are mostly the smaller sales, and the larger sales are where the tax is. For a higher-rate taxpayer with a gain of £1 million, tax rises from £180,000 to £210,000, and the extra £30,000 applies to every larger sale as well. Because the limit is a lifetime one, I expect anyone who has already claimed more than £500,000 to get no further relief (confidence: medium, as the rules are not yet published).
The official legislation overview refers to transitional rules for contracts made before 6 April 2027 that have not completed by then, but gives no detail. When the rate rose in 2024, anti-forestalling rules caught some contracts made before the change date but completed after it, and I would not be surprised to see something similar here. If you are thinking of selling, the safe course is to complete before 6 April 2027, not just to exchange contracts.
Founders' Relief is a lot narrower than it sounds. A new 10% rate of capital gains tax on up to £10 million of lifetime gains looks generous. But the conditions in the consultation (which closes on 30 November 2026) are demanding:
- the founder must have held at least 25% of the company when the trade began, and must have held the shares for five years
- the founder must have been UK resident for five continuous tax years
- the company must have turnover of at least £10 million and at least 15 qualifying full-time employees
- the company must also pass two of three growth tests: 25% annual growth in turnover, 25% annual growth in headcount, or at least £1.5 million of qualifying R&D spend
On those tests a typical owner-managed business will not qualify, and nor will five equal founders holding 20% each, a profitable family company with flat turnover, or a founder who has recently arrived in the UK. Trades on the Enterprise Investment Scheme excluded list, which could include financial services and property, are likely to be out too (confidence: medium). If a company qualifies through R&D spend and HMRC later disallows the claim, the relief would be lost and the tax paid with interest.
The Treasury's own costings show the BADR cut raising about £255 million a year by 2029-30, and Founders' Relief costing about £260 million. Overall that looks like relief moved from owner-managed businesses to a small group of scale-ups, not a tax cut for the sector. The consultation also proposes anti-avoidance rules aimed at artificial restructuring, so please do not restructure to qualify without speaking to me first.
The rules on company distributions will change from April 2028. The government is going ahead with all seven proposals from its consultation, covering share buybacks and capital reductions, demergers, reorganisations such as inserting a new holding company, distributions from non-UK companies, and the anti-avoidance rules on transactions in securities. The Treasury expects to raise about £800 million a year from this by 2029-30, which tells me the routes owners use to take value out of a company as capital, not income, are going to be narrowed. Capital treatment is to be protected for genuine changes of ownership such as family successions. The papers I have read do not say what happens to liquidations, including members' voluntary liquidations, and I would not assume that route stays as it is. If you have a demerger, buyback, reorganisation or liquidation in mind, please tell me before it goes ahead, because completing before April 2028 may give a different result. Confidence: medium to high on the direction, low on the detail until draft legislation appears in 2027.
Capital allowances give with one hand and take with the other. The first-year allowance rises from 40% to 50% for spending from 1 January 2027, but the writing down allowance falls from 14% to 12% from April 2027. Companies buying new equipment will normally claim full expensing, and the £1 million annual investment allowance already covers most smaller businesses, so the higher first-year allowance mainly helps sole traders, partnerships and leasing businesses. The lower writing down allowance applies to existing pools as well, so it is a quiet tax rise for any business with a pool of past spending, particularly one that buys second-hand equipment or cars. The relief is deferred, not lost, but deferral still costs cash, and on the Treasury's costings the package raises about £1.1 billion in 2029-30.
If you are a landlord or saver
Property and savings income will be taxed at up to 49%. From 6 April 2027, tax on property income and savings income rises by a further 2 percentage points, on top of the 2% announced last year. The rates become 24%, 44% and 49%, and dividends and employment income are not affected. The Treasury expects the two changes together to raise about £1 billion a year by 2029-30. For property income the rates apply in England, Wales and Northern Ireland, and the Scottish position is still to be confirmed.
This is the biggest hit in the Budget for landlords and for anyone with significant savings outside an ISA. Together with last year's rise it adds four points in two years, so a landlord with other income in the higher or additional bands will pay 44% or 49% on rent. I have not seen it confirmed whether the credit for mortgage interest changes, so I would treat that as open for now.
The Treasury says 84% of taxpayers are unaffected, but that counts only the direct effect, and the Office for Budget Responsibility thinks it more likely than not that rents will rise, so tenants may end up paying too. The change strengthens the case for looking again at how property is held, since companies pay 25% corporation tax. But moving property into a company can trigger capital gains tax and stamp duty land tax, can affect mortgage terms, and leaves profits taxed again as dividends when they are taken out, so it will rarely be a straightforward answer. I would run the numbers for each case before anyone acts.
ISAs matter more than before. The planned cut to the cash ISA limit has been dropped, so the overall £20,000 limit stays. With savings income now taxed at up to 49%, using the allowance every year is the most practical response, and couples should review who holds the savings.
Inheritance tax rates are unchanged, but the detail is less friendly than the headline. From 28 October 2026 the rules on deducting liabilities from trust property are tightened, and I expect them to stop trustees reducing the tax by deducting loans funded, directly or indirectly, from a beneficiary's own estate (confidence: medium). The change on pension lump sum death benefits reaches back to payments made from 6 April 2024, which is retrospective, so if a member of your family has received a large pension lump sum since then, please tell me. The big item for estate planning is still the one already announced: unused pension funds come into the estate from 6 April 2027, so if your planning assumes your pension sits outside your estate, it is worth reviewing now.
If you employ people or buy from overseas
Wages go up again. From 1 April 2027 the National Living Wage rises by 3.9% to £13.21 an hour, with the other minimum wage rates rising by the same percentage. Employer National Insurance stays at 15% above the threshold, so for an employer not already covered by the Employment Allowance, each extra £1 of pay costs about £1.15. Established employers get no offsetting relief, so please allow for this when you set next year's budget.
Overseas suppliers will charge you VAT. From April 2027 the reverse charge on services bought from abroad will apply only to VAT-registered UK businesses, so overseas suppliers will have to charge UK VAT to businesses that are not registered. A company that is not VAT-registered, such as a holding company or a small consultancy, cannot recover that VAT, so on software, cloud services or advice bought from abroad the 20% becomes a permanent cost where none arises today. The Treasury expects only about £75 million a year from this, so it is small in total, but for an affected company it is a flat 20% on every such invoice. Confidence: medium, as the detailed rules are not yet published.
What HMRC will be doing
I spent years on the other side, and more funding for HMRC means more checks. The Treasury is counting on about £2 billion a year from closing the tax gap by 2029-30, rising to over £3 billion by 2031-32, and that money has to come from more enquiries, more information requests and more penalties. The practical points are these:
- From April 2029 businesses will have to pay VAT and PAYE by direct debit, so HMRC will take the money and it must be in the account on the due date.
- From July 2029 HMRC will be able to recover lower-value tax debts in instalments directly from the bank accounts of people and companies that can afford to pay but repeatedly fail to. The safeguards are not yet fixed and this is a measure that worries me.
- From 1 April 2028 there will be a duty to correct errors, and HMRC's information powers are widened, including notices to crypto service providers. For clients with offshore income, crypto or complicated affairs, that means more data for HMRC and fewer places to hide.
- From April 2029 self assessment payments on account move to smaller, more regular instalments. I would not assume this helps: the total tax does not change, only the timing, and it suits people with steady PAYE income better than the self-employed, landlords or anyone with irregular income. Confidence: medium to low, as the design is not final.
The simplest protection is to respond to every HMRC letter promptly. If you have an overdue liability, a letter you have not dealt with, or a suspicion that a past return contains an error, please get in touch now. A correction made voluntarily is treated far better than one HMRC finds.
What to do now
Nothing here needs a panic, because almost everything starts in April 2027 or later. But a few things are worth doing early:
- If you may sell a business, work out whether you can complete before 6 April 2027, and please do not rely on exchanging contracts alone.
- If you let property or hold significant savings outside an ISA, we should look at how the extra tax affects you and whether using ISAs, or changing who holds the income, helps.
- If you are planning a demerger, buyback, reorganisation or liquidation, please tell me before it goes ahead.
- If you founded or invested early in a fast-growing UK company, we should check whether Founders' Relief could apply to you.
- If you buy services from overseas through a company that is not VAT-registered, work out roughly what you spend, because from April 2027 it will carry 20% VAT.
We will be in touch over the next couple of weeks with the clients we think will be most affected, so that we can look at what to do before April 2027. If you already know that one of these changes will affect you, please get in touch through the contact page or at rob@rmhoconsulting.com and let me know what you are concerned about.
Best wishes,
Rob Osborne BA CTA
Director, RMHO Consulting Limited
www.rmhoconsulting.com
Last updated 28 October 2026. This article is general information based on the announcements made on 28 October 2026. The detailed legislation has not yet been published, so the position may change, and it is not advice on your own circumstances.