Autumn Budget 2026 in Plain English: What Changes for Your Small Business

The Chancellor delivered the Autumn Budget on 28 October 2026. Budgets are full of long words, but most of what matters to a small business comes down to three questions. What will I pay? What can I keep? What do I need to do, and by when?

This guide answers those questions in plain English. You don't need to know anything about tax to follow it. Whenever we use a tax word, we explain it.

Earning a little on the side? You get more room

The trading allowance is how much you can earn from your own small business or side work each year before you need to tell HMRC, the UK tax office. From 6 April 2027 it goes up from £1,000 to £3,000.

One thing catches people out. The limit counts all the money you take in, not the money left after costs.

• Under £3,000 a year: you normally don't need to register or pay tax on this money.
• Over £3,000 a year: you need to register. You can then take off either £3,000 or your real costs, but not both.

What to do: keep a simple record of what you earn, so you know which side of the line you are on.

Employ staff? Your wage bill will go up

The lowest pay you can legally give goes up by 3.9% on 1 April 2027. This is true for every business, whatever its size.

What to do: work out your new wage bill now, and include it in your plans and prices for next year. Update your payroll before 1 April 2027.

Drive for work? More of it is tax-free

When people use their own car or van for work, they can be paid a set amount per mile without paying tax on it. The rate for the first 10,000 miles went up to 55p in April 2026, and the Budget makes that permanent. The rate for miles after that goes up from 25p to 35p from April 2027.

If you are self-employed, ask your accountant how these rates work for you.

On fuel, the 5p cut in fuel duty stays until 1 July 2027. Fuel duty is a tax added to the price of fuel, and it is due to rise after that date, so it is wise to plan for higher fuel costs.

Run a shop, pub or cafe in England? Help with business rates is coming

Business rates are a tax on the building your business uses. Your bill starts from your rateable value, which is a figure the government sets for your property. It is not the same as your rent.

From April 2027, retail, hospitality and leisure businesses in England get more help. It runs for two years, up to 31 March 2029.

Example: a small shop has a rateable value of £16,000. Today that is too high for small business relief. From April 2027, if it qualifies, it pays no business rates at all.

Two things to know. Bills for larger properties are not fully frozen, because they can still rise with inflation. And a few types of shop, such as vape shops, are left out. Pubs, social clubs and most live music venues get a bigger discount, with their relief going up from 15% to 35%.

What to do: look up your rateable value on GOV.UK, then ask your council what you will pay.

Have rent or savings income? Expect to pay more

From April 2027, tax on income from rent and savings goes up by a further 2 percentage points. Added to the rise announced last year, that makes 4 points in total.

The government says 84% of people who pay income tax will not be affected. The amount of savings interest you can earn tax-free, called the Personal Savings Allowance, stays the same: £1,000 for basic rate taxpayers and £500 for higher rate taxpayers.

What to do: if you rent out property, check whether your rent still covers your costs after the extra tax.

Making Tax Digital: check if it's your turn

Making Tax Digital means keeping your tax records in approved software and sending HMRC a short update four times a year. It is going ahead as planned.

• Who joins on 6 April 2027: self-employed people and landlords whose income was over £30,000 in the 2025/26 tax year. This means income before costs.
• A soft start: if you start in April 2027, you won't get late penalties on your first four updates.
• Already using it since April 2026? Penalty points for late updates begin in April 2027.

What to do: check your 2025/26 income, and choose your software well before the deadline.

Bigger changes coming in 2029

Smaller, more regular tax payments

Many self-employed people pay their tax bill in advance, in two large amounts each January and July. These are called payments on account. From April 2029, they will become smaller payments made more often, and will be taken automatically by default, for example by Direct Debit.

Your tax return deadline stays at 31 January. More details are due in 2027, and new HMRC tools to help you estimate your tax and pay early are planned from 2028.

Direct Debit for VAT and PAYE

From April 2029, most businesses must set up a Direct Debit with HMRC for VAT and PAYE, the tax taken from staff pay. You can still pay your own way first. HMRC will use the Direct Debit to collect anything left unpaid, so make sure the money is in your account.

Parental pay for the self-employed

From April 2029, self-employed fathers, partners and adopters in Great Britain will be able to get parental pay for the first time. Reports put it at two weeks, worth up to £194 a week. The government expects it to help over 150,000 parents a year.

Thinking of selling or starting a business?

When you sell a business for more than you paid, the profit is taxed. This is called Capital Gains Tax. Two reliefs that lower this tax change on 6 April 2027.

• Business Asset Disposal Relief: the lifetime limit is cut in half, from £1 million of profit to £500,000. The rate stays at 18%.
• Founders' Relief (new): a 10% rate on up to £10 million of profit for qualifying founders of high-growth companies. You must hold at least 25% of the company for five years, among other rules. The rules are still being consulted on until 30 November 2026.

There is also new help for people starting out. A Young Entrepreneurs Allowance pilot will help with living costs in a business's first year, and a scale-up programme for businesses led by women is backed by £100 million from the British Business Bank. The government also plans to cut red tape, which it says could save businesses almost £800 million a year.

Your dates at a glance

Five things to do this week

1. Add up what you earned from any side work, to see where you stand against the £3,000 limit.
2. Work out your wage bill using the new hourly rates.
3. Look up your rateable value if you have business premises in England.
4. Check your 2025/26 income to see if Making Tax Digital applies from April 2027.
5. Speak to your accountant if you rent out property or plan to sell your business.

Frequently asked questions

When do most of these changes start?

Most start in April 2027. The changes to payments on account, Direct Debits and self-employed parental pay start in April 2029.

Is the £3,000 limit based on my profit?

No. It is based on all the money you take in, before you take off any costs.

Do the business rates changes apply everywhere in the UK?

No. They apply to England only. Scotland, Wales and Northern Ireland have their own rules.

Do I need to set up a Direct Debit for VAT now?

No. The rule starts in April 2029.

Are all of these changes final?

Not yet. Some still need to become law, and some are still being consulted on, so the details could change.

Keep your numbers in one place

Changes like these are easier to handle when you can see your real figures quickly. If your sales, stock and costs are spread across different apps, even a simple question like "what will this cost me next year?" can take hours to answer.

That is the problem SorviAI is built for. Finance, Inventory, Worklink, repairs and storefront run on one platform, so your numbers are in one place when the rules change.

This guide gives general information based on the Budget as announced on 28 October 2026. It is not tax advice, so please speak to an accountant about your own situation. Read the full details in the Budget 2026 document on GOV.UK.