Budget 2026: Breathing space now, hope for the future

On 28 October 2026, Chancellor John Healey presented his first Budget. He promised “Breathing Space now, Hope for the Future”. He held back from broad tax rises because families and businesses face rising energy costs. However, several targeted changes will affect individuals, employers and business owners over the next few years.

Our full Budget 2026 summary is available to download below.

Support with living costs

• The VAT cut on domestic electricity and the 5p Fuel Duty cut are extended to July 2027.
• Households in Council Tax bands A to D in England will get a £100 Household Energy Payment this winter.
• A higher Small Business Rate Relief threshold means a further 70,000 retail, hospitality and leisure businesses will pay no business rates.

Personal tax

• The Personal Allowance and Income Tax bands stay frozen until 5 April 2031.
• From April 2027, tax rates on property and savings income rise to 24%, 44% and 49%.
• A new Pension Tax Allowance from 6 April 2027 means pensioners whose income is no more than the full new State Pension will not pay Income Tax.
• The Trading Allowance rises from £1,000 to £3,000 from 6 April 2027.
• The cash ISA limit stays at £20,000. The planned cut will not go ahead.

Employers

• The National Living Wage rises to £13.21 per hour from 1 April 2027.
• From April 2027, employers must report company cars, vans, fuel and medical benefits through payroll.
• From April 2029, only the first £2,000 of pension contributions made through salary sacrifice will be free of National Insurance each year.

Business

• The Corporation Tax rates stay the same. The main rate is capped at 25% for the rest of this Parliament.
• The main rate Writing Down Allowance falls from 14% to 12% from April 2027.
• The main rate First Year Allowance rises from 40% to 50% for spending from 1 January 2027.
• From April 2027, new zero emission cars will no longer get the 100% First Year Allowance.

Capital taxes

• The Business Asset Disposal Relief lifetime limit halves to £500,000 from 6 April 2027.
• A new Founders’ Relief is planned. It would charge a 10% CGT rate on qualifying disposals of shares, with a lifetime limit of £10 million.
• From 6 April 2027, unused pension funds and death benefits will count towards an estate for Inheritance Tax.

Other changes to note

• VAT e-invoicing becomes mandatory from April 2029.
• From April 2028, homes worth £2 million or more will pay a High Value Council Tax Surcharge.
• From 1 April 2028, a new per mile excise duty applies to electric and plug-in hybrid vehicles.

Download our full summary

Our Budget 2026 summary covers all of these measures in more detail. It also includes the rates and allowances tables for 2026/27 and 2027/28.

Download the Budget 2026 summary

How we can help

If you’d like to know how the Budget affects you, your family or your business, please contact your local McCabe Ford Williams office or your usual contact at the firm.​