UK Autumn Budget 2026 - top 10 tax takeaways

Here are our top tax takeaways from the UK Budget, delivered by Chancellor John Healey on 28 October 2026:

1. Savings and property income: Following a rise in the rates of dividend tax of 2% on the two lower bands from 2026-27, a similar mooted increase from 6 April 2027 on the rates of tax on savings and property income has been unexpectedly doubled, so that an additional 4% will be payable at all levels. This will make the basic rate 24%, the higher rate 44% and the additional rate 49%. These rates will apply to savings income – primarily interest – across the UK. But the rates of tax on property income are devolved to the Scottish Parliament as part of the partially devolved income tax system.

Legislation is already in place to allow the Scottish Parliament to set its own distinct rate for property income (as opposed to it falling within the rate set for other devolved income); and we will need to await the Scottish Budget (set for 3 December) to see if and to what extent the Scottish Government proposes to replicate this increase. The Scottish rates for such income as part of devolved income tax more generally are already (in most cases) at a higher level than those for taxpayers in the rest of the UK.

2. Founders Relief/BADR: A new founder’s relief, aimed at qualifying shareholders (holding at least 25% for 5 years) in qualifying high growth innovative companies with a significant UK presence (with innovation and turnover conditions) will be introduced from 6 April 2027. An effective CGT rate of 10% will apply on up to £10m of lifetime gains. There will be a short consultation on the details. Bad news for other owner managers and EMI option holders who don’t qualify for the new relief, as business asset disposal relief has been reduced with effect from 6 April 2027 with the effective rate of tax of 18% now applying only on £500k of lifetime gains (reduced from £1m).

3. VAT: A number of VAT announcements of note were made. The most noteworthy are:

Zero rating of land sales to registered providers - This was consulted on earlier in the year and is a welcome measure, albeit it will not be introduced until 1 April 2027 and the draft legislation is not yet in play. The proposed new rules will allow developers to zero rate sales of land to registered providers of social housing without having to structure around golden brick or face potentially irrecoverable VAT charges. Golden brick is cost intensive for developers and can constrain cash flows, bottlenecking the supply of social housing sites to providers. However, the proposals in the consultation document raised questions, chief amongst them was whether zero rating would be restricted to “bare land” or would it include existing buildings for conversion and brownfield sites? Whether or not it is so restricted may have knock-on effects on what land is considered eligible for social housing development in the future.

Online Marketplaces - This will impact business selling goods over online markets such as Ebay or Amazon. From October 2027 the marketplace will be responsible for collecting VAT in respect of traders operating on that platform where the trader is either VAT registered or is making annual sales above a threshold of £90,000. Draft legislation is yet to be published, so the detail is as yet unknown. However, this kind of measure – where the compliance obligations of entity A are passed to entity B further up the chain - is increasingly favoured by the UK government when dealing with “supply chain” taxes like VAT or the construction industry scheme. It is a sibling, in that sense, of the domestic reverse charge as applied to construction – albeit the mechanics will be different. Online market traders will need to ensure that they have their accounting processes updated to account for the change, and also consider the implications on their cash flow (as they will not be able to use VAT collected from sales to pay suppliers who will themselves be charging the VAT).

4. Capital Allowances: Two smallish changes to capital allowances were announced. First, the main pool first year rate was increased from 40% to 50% effective from 1 January 2027. This is the rate of allowances available to non-corporation taxpayers on the acquisition of new or unused main rate pool assets (companies get full expensing). From 1 April 2027 the main rate of writing down allowances will decrease from 14% to 12%.

5. ISAs: A first-time buyers' ISA is being introduced from 6 April 2029 to replace the Lifetime ISA. The government will pay a bonus of up to £20,000 on the purchase of a first home. From midnight 29 October 2026 the withdrawal charge for purchases of properties above the LISA property price cap will be reduced to 20%. The charge for unauthorised withdrawals will remain at 25%. The annual allowance for cash ISAs, due to be cut from 6 April 2027, will remain at £20,000 and an incentive for first time stocks and shares ISA savers is to be explored.

6. Employee Share Schemes: The limit on the value of shares that can be granted under an employee Company Share Option Plan (CSOP) is increasing from £60,000 to £120,000, and the maximum holding period for CSOP options is also increasing from 10 to 15 years. The limits which apply to employees holding options under both a CSOP and an Enterprise Management Incentive (EMI) plan are being removed, meaning eligible employees will be able to receive full entitlements under both schemes. CSOPs will also be rebranded as “EMI 2”, intended as an option for companies that have grown beyond EMI or are not eligible for EMI. These changes follow increases to the eligibility limits for EMI schemes introduced in the 2025 Budget and show a continued trend of government support for employee share schemes.

7. Self-assessment: In a significant but rather delayed change, from April 2029, taxpayers who already make payments on account will make smaller, more regular contributions bill throughout the year, bringing payment closer to when income is earned. This of course brings the payment of tax forward and improves Government cash-flow; but is touted as being “…to help taxpayers budget and plan for their tax obligations, reducing the risk of large, unexpected tax bills and making it less likely that they fall behind on tax due and build up debt”. There is time for further consultation on this change – for example as to the frequency of the new schedule for payments. In a small move in the other direction, there will be a change to make it easier for some employees to claim tax relief on expenses, if that is the only reason that they require to self-assess.

8. Business Rates: From 1 April 2027 the relief for pubs, music venues and social clubs in England is increased from 15% to 35%, and the valuation limit for Small Business Rate Relief for retail hospitality and leisure (RHL) properties will increase from £12,000 to £18,000. For all other RHL properties, rates will be frozen for two years. A General Anti-Avoidance Rule (GAAR) measure for business rates will be introduced, as well as funding for local authorities for anti-avoidance litigation.

Plans for devolution of business rates under the English Fiscal Devolution Roadmap will see 20% of business rates retained by Mayors from April 2027 with 100% of business rates to be retained locally by the end of the decade. New Business Rates Retention Zones for Mayoral Strategic Authorities will be introduced.

These changes only apply to England. Business rates are devolved to the Scottish Parliament, and there is already a 15% relief for general RHL properties and a 40% relief for eligible licensed hospitality premises and music venues in Scotland. It will be interesting to see what changes to business rates are announced in the Scottish Budget on 3 December 2026.

9. Pension tax allowance: Following the increase in state pension above the personal allowance, many taxpayers would be burdened with the need to complete a tax return so that tax could be collected on the excess. A new allowance is being introduced to mitigate that liability, but if pensioners have other sources of income, that allowance will be lost at a rate of £1 for every £3 of income that exceeds the amount of the full state pension.

10. Bank surcharge: To help fund support for household energy bills (particularly the £2.6 billion Household Energy Payment) the government is temporarily increasing the Bank Corporation Tax Surcharge from 3% to 6% for 15 months from 1 January 2027 to 31 March 2028. This time limited period will be legislated for in the Finance Bill 2026-27. The government presents this as one of a small number of targeted revenue raising measures rather than a permanent tax rise and notes it will not be extended past the end date.

For further updates, visit our UK Budget Hub or contact one of our tax experts below, or your usual Brodies contact for more information on how these new developments may impact you or your business.