Autumn Budget 2026: Richard Riley examines what the Chancellor’s announcements mean for businesses, landlords, entrepreneurs and savers.
Chancellor John Healey delivered his first Budget on 28 October, and if I were to sum it up in a few words, they would be: steady as she goes.
It reminded me of an exchange between Ed Balls and George Osborne across the despatch box, when Balls responded to George Osbourne’s budget at the time with ‘steady as she goes, what ship does he think he is steering? The Titanic!’
The comparison seems rather appropriate given the challenges facing the UK economy today.
With the ongoing cost-of-living crisis, significant national debt, mounting interest payments and the ever-watchful bond markets, John Healey has inherited a difficult balancing act.
He could have pulled some of the major tax levers available to him, increasing the headline rates of Income Tax, National Insurance, VAT, Capital Gains Tax or Dividend Tax. Instead, he opted for a relatively cautious approach, seeking stability rather than wholesale change.
However, as is so often the case with Budgets, the devil is in the detail.
While the headline announcements may have offered some reassurance, there are several significant changes that will affect particular groups of taxpayers, especially landlords, business owners and entrepreneurs.
Some welcome relief for households
The Chancellor announced a number of measures aimed at easing the pressure on household finances.
These include changes designed to reduce energy costs, the removal of household gas standing charges, continued support on fuel duty and temporary reductions in tariffs on certain imported consumer goods.
So, if you happen to be particularly fond of marmalade or gherkins, there may be some welcome news!
More importantly, the Government has also announced measures to prevent pensioners whose income is limited to the full new State Pension from being drawn into paying small amounts of Income Tax simply because their State Pension increases beyond the frozen Personal Allowance.
A new Pension Tax Allowance will apply from April 2027, providing some reassurance to pensioners who would otherwise find themselves paying tax on relatively modest retirement incomes.
However, beyond these measures, there are several announcements that deserve closer attention.
Landlords face another increase in taxation
It has certainly not been an easy few years for residential landlords.
Between the introduction of the Renters’ Rights Act, increasing regulatory requirements and the rollout of Making Tax Digital, property owners are already facing considerable additional responsibilities.
Now the Chancellor has announced a further two percentage point increase in Income Tax on property income from April 2027.
For landlords paying tax at the basic, higher or additional rates, this will mean more of their rental profits being taken in tax.
For those with mortgaged properties, rising maintenance costs or relatively modest rental yields, the additional burden could be significant.
I suspect this latest announcement will prompt many landlords to reconsider their position, particularly those who became landlords by circumstance rather than through a deliberate investment strategy.
These so-called ‘accidental landlords’ may decide that the increasing administrative and tax burden simply makes letting their property less attractive.
The potential consequence is that more property owners could choose to sell, reducing the availability of rental accommodation at a time when the housing market is already under considerable pressure.
My advice to landlords: Before making any decisions, review your property’s profitability, the impact of the increased tax rates and the potential Capital Gains Tax implications of a sale. Selling is not necessarily the best solution, but understanding your options is essential.
Making Tax Digital: Is quarterly tax payment on the horizon?
Making Tax Digital (MTD) represents one of the biggest changes to the administration of Income Tax in recent years.
Self-employed individuals and landlords with qualifying income exceeding £50,000 have been required to use MTD for Income Tax from April 2026, with the threshold reducing to £30,000 from April 2027 and £20,000 from April 2028.
For those affected, this means maintaining digital records and submitting quarterly updates to HMRC, rather than relying solely on the traditional annual Self Assessment process.
I have long suspected that quarterly reporting was a precursor to the Government moving towards more frequent tax payments.
And this Budget appears to confirm that direction of travel.
The Chancellor has announced plans to reform the existing Self Assessment Payments on Account system from April 2029, requiring affected taxpayers to make smaller, more regular payments towards their tax liabilities throughout the year.
The precise arrangements are still to be developed, but the intention is clear: the Government wants tax payments to be brought closer to the point at which income is earned.
There may be advantages to spreading tax payments more evenly across the year, particularly from a cash-flow planning perspective. However, for many small business owners and landlords, this will represent another significant adjustment.
It also reinforces the importance of maintaining accurate, up-to-date financial records.
My advice: If you are self-employed or receive rental income and have not yet prepared for MTD, now is the time to act. The earlier you establish suitable systems, the easier the transition will be.
ISAs: A reversal on cash savings and changes for first-time buyers
One unexpected announcement was the Chancellor’s decision to reverse the previously proposed reduction in the annual Cash ISA allowance.
His predecessor had announced plans to reduce the Cash ISA limit to £12,000 from April 2027, with the intention of encouraging more savers to invest in stocks and shares.
However, John Healey has now scrapped that proposal, meaning the existing £20,000 annual ISA allowance will remain available for cash savings.
This will undoubtedly be welcome news for savers who prefer the security and accessibility of cash deposits.
Whether the financial services industry will be quite so pleased is another matter, having spent considerable time preparing for a change that will no longer happen!
The Chancellor had made it clear that he did not want Budget measures leaked or floated in the press ahead of his statement. On that front, he certainly appears to have kept his word.
What about the Lifetime ISA?
There are also important changes ahead for those saving towards their first home.
The Government has announced that the Lifetime ISA will be replaced for new savers by a First Time Buyer ISA from April 2029.
The new scheme will retain a 25% Government bonus on eligible contributions of up to £4,000 a year, with qualifying property purchases subject to a £450,000 price cap.
Importantly, existing Lifetime ISA holders will be able to continue contributing to and using their accounts under the current rules.
There is also a welcome relaxation for existing Lifetime ISA holders looking to purchase their first home above the current £450,000 property threshold. From 29 October 2026, a reduced 20% withdrawal charge will apply to qualifying purchases above this limit, rather than the previous 25% charge.
The changes will be particularly relevant to younger savers planning their first property purchase, although anyone currently using a Lifetime ISA for longer-term retirement planning should consider how the proposals may affect their future savings strategy.
Entrepreneurs’ Relief: A significant blow for business owners
Of all the Budget announcements, the changes to Business Asset Disposal Relief are perhaps among the most concerning for owners of small and medium-sized businesses.
I have always believed that anyone starting a business should give some thought to their eventual exit strategy.
Whether you plan to sell your business, retire or pass it on, understanding the tax implications of that decision is an essential part of financial planning.
Business Asset Disposal Relief (BADR), formerly known as Entrepreneurs’ Relief, has historically provided business owners with a reduced rate of Capital Gains Tax when selling a qualifying business.
Originally, the relief applied to up to £10 million of qualifying lifetime gains, but that threshold was subsequently reduced to £1 million.
We have also seen the rate of Capital Gains Tax payable under the relief increase from 10% to 14%, and then to 18% in the current tax year.
Now, the Chancellor has announced a further restriction.
From 6 April 2027, the lifetime limit for gains qualifying for Business Asset Disposal Relief will fall from £1 million to just £500,000.
This means that qualifying gains within the reduced allowance will continue to benefit from the 18% rate, while gains above the limit will generally be subject to the standard Capital Gains Tax rate of 24%.
For an entrepreneur who has spent years building a successful business, the difference could be substantial.
It is important to recognise that these limits relate to qualifying capital gains rather than the total sale price of a business.
Nevertheless, I consider this another disappointing development for SME owners who have taken considerable personal and financial risks to establish their businesses.
A new 10% Founders’ Relief, but who will qualify?
There was, however, a potentially positive announcement for certain entrepreneurs.
The Chancellor has proposed a new Founders’ Relief, offering a 10% Capital Gains Tax rate on up to £10 million of qualifying lifetime gains for eligible founders of high-growth, innovative businesses.
The relief is intended to come into effect from 6 April 2027.
On the face of it, this is a welcome incentive for entrepreneurs building innovative companies with significant growth potential.
However, the important question is which businesses will actually qualify.
A technical consultation has been launched to establish the detailed eligibility criteria, and the relief is expected to be subject to specific ownership, residency and qualifying-period conditions.
It appears that the Government is looking to distinguish between different types of entrepreneurship, offering more generous incentives to businesses it considers particularly innovative or capable of delivering substantial economic growth.
But where does that leave the many thousands of successful, established SMEs that form the backbone of the British economy?
A family-run manufacturing business, an established consultancy or a successful local service company may not fall within the Government’s definition of an innovative, high-growth enterprise, despite creating jobs, paying taxes and contributing significantly to the economy.
It will be interesting to see how the eligibility criteria develop following the consultation.
For now, any business owner considering a sale in the coming years should review their plans carefully, particularly given the reduction in the existing Business Asset Disposal Relief allowance.
So, was this really a ‘steady as she goes’ Budget?
On the surface, John Healey has delivered a relatively cautious Budget.
He has avoided some of the sweeping headline tax increases that many feared, introduced measures intended to ease household costs and attempted to reassure financial markets that the Government remains committed to fiscal responsibility.
But beneath that relatively calm surface, there are important changes taking place.
Landlords will face higher taxes on their rental profits. Self-employed individuals are moving towards more frequent tax reporting and payments. Business owners contemplating an eventual sale could face significantly higher Capital Gains Tax bills.
And while certain entrepreneurs may benefit from the new Founders’ Relief, many established SME owners could find themselves worse off.
For me, the real question is whether this Budget provides the stability needed to encourage business confidence and long-term investment, or whether the gradual accumulation of tax and compliance changes will continue to weigh on smaller businesses.
Only time will tell.
One thing is certain: even a ‘steady as she goes’ Budget can have significant consequences for individual taxpayers and businesses.
What does the Budget mean for you?
At Richard Riley & Associates, we understand that changes to taxation can be difficult to navigate, particularly when you are busy running a business, managing investments or planning for the future.
Whether you are a landlord concerned about rising tax liabilities, a self-employed individual preparing for Making Tax Digital or a business owner considering an eventual exit, it is important to understand how the latest announcements could affect your circumstances.
If you would like to discuss any of the measures announced in the Autumn Budget, please contact Richard Riley & Associates. We would be happy to help you understand the implications and plan accordingly.
Richard Riley
Richard Riley & Associates