We will update this article as further detail becomes available.
The Autumn Budget has now been delivered, with no general increase to the headline rates of Capital Gains Tax or Corporation Tax.
From 6 April 2027, however, the tax rates applying to savings and property income will rise to 24% for basic-rate, 44% for higher-rate and 49% for additional-rate taxpayers, on top of the increase announced in the previous Budget. This is four percentage points above the equivalent rates applying to employment income.
Beneath the relative stability of the headline rates are several targeted changes that could materially affect business owners, entrepreneurs, investors and private clients.
At Arnold Hill & Co LLP, we are reviewing the announcements and accompanying technical documents in detail.
“Our early view is that the Budget combines headline stability with a series of narrower changes that could create very different outcomes depending on a client’s income, ownership structure, investment plans and long-term objectives.”
Below are initial thoughts on some of the measures to note. As consultations progress and draft legislation is published, we will continue to update our guidance.
Although the main rates of Capital Gains Tax remain unchanged, Business Asset Disposal Relief will become less generous.
The relief currently applies an 18% rate of Capital Gains Tax to up to £1 million of qualifying lifetime gains. For disposals made from 6 April 2027, that lifetime limit will fall from £1 million to £500,000.
This change may be significant for shareholders and business owners considering a future sale, succession or restructuring. The timing of a transaction should not be determined by tax alone, but owners with plans on the horizon may wish to review their position well in advance.
The reduction will sit alongside a proposed new Founders’ Relief. From 6 April 2027, qualifying founders of high-growth, innovative UK companies could benefit from a 10% Capital Gains Tax rate on up to £10 million of lifetime gains.
The contrast is notable: while the scope of Business Asset Disposal Relief is being reduced, the Government is proposing more substantial relief for a narrower group of founders who build and scale qualifying companies.
The detailed eligibility conditions are now subject to technical consultation, so it will be important not to assume that a business or shareholder qualifies until those rules are settled.
The Budget contains several measures intended to support businesses seeking investment, growth capital and talented employees.
Technical changes are planned to make the Enterprise Investment Scheme, Seed Enterprise Investment Scheme and Venture Capital Trust regimes easier to use. The Government will also engage with stakeholders on improvements to the Advance Assurance process.
The longstanding Company Share Option Plan will be revamped and rebranded as EMI2. Among the changes, the individual option limit will rise from £60,000 to £120,000, the exercise period will be extended and the interaction between EMI and EMI2 options will be removed.
This should make it easier for growing companies to operate the two schemes concurrently and use tax-advantaged share options to recruit, retain and incentivise key employees. Businesses with existing arrangements should review how the new rules may affect their future option grants.
For very early-stage activity, the Income Tax Trading Allowance will rise from £1,000 to £3,000 from 6 April 2027.
The Budget materials also contain a substantial number of technical amendments intended to correct legislation or improve tax administration. These range from changes to EIS, SEIS and VCT reliefs to amendments affecting the Corporate Interest Restriction for groups.
Some will only affect a relatively small number of taxpayers, but their impact could be significant where they apply. We will continue to review the detailed provisions and alert clients where a change is relevant to their structure or plans.
The Government will replace Stamp Duty and Stamp Duty Reserve Tax on share transactions with a new Securities Transfer Tax from late 2027.
This is a notable modernisation of one of the UK’s longest-running taxes. Stamp Duty was first introduced in 1694 as a temporary measure to help fund the war with France, with payment evidenced by a physical stamp impressed on paper, vellum or parchment.
The residual tax on paper share transfers retained much of that analogue character into the modern era. The pandemic accelerated the move away from physical stamping, and HMRC formally retired its stamp presses in 2021. The new Securities Transfer Tax should bring the underlying legislation and administration more fully into the digital age.
The practical implications for share transactions will depend on the final legislation, but a clearer and more streamlined system would be a welcome development.
The capital allowances announcement combines a stronger upfront incentive with a lower rate of ongoing relief.
For qualifying expenditure incurred from 1 January 2027, the main-rate first-year allowance will increase from 40% to 50%.
The main writing-down allowance for main-pool plant and machinery will fall from 14% to 12% from 1 April 2027 for companies and 6 April 2027 for unincorporated businesses. This follows its reduction from 18% to 14% in April 2026.
In practice, the 50% first-year allowance may have limited relevance for many businesses. The £1 million Annual Investment Allowance and full expensing can already provide 100% relief for substantial categories of qualifying expenditure.
The appropriate relief will depend on the business, the asset and the availability of the different allowances. Businesses planning substantial investment should therefore review the timing and composition of expenditure, rather than assuming the new 50% allowance will produce the best result.
UK companies operating through overseas branches should prepare for the foreign permanent establishment exemption to become compulsory for accounting periods beginning on or after 1 January 2027.
This change was already progressing before the Budget, but it remains an important part of the developing corporate tax landscape. The effect will depend on a company’s structure, overseas profits and losses, and the jurisdictions in which it operates.
The expansion of Making Tax Digital for Income Tax remains scheduled for April 2027, but the Budget introduces some transitional easements.
Taxpayers joining from April 2027 will not receive penalty points for late submission of their first four quarterly updates during 2027/28. The Government is also deferring the rollout for certain taxpayer groups until further notice.
Affected individuals and unincorporated businesses should still prepare for digital record-keeping and more frequent reporting. Further clarification will be needed on exactly who falls within the deferred groups.
The Government also intends to give HMRC a new power to recover established lower-value tax debts through regular deductions from bank accounts. It is intended to apply where an individual or company can afford to pay but has repeatedly failed to engage with HMRC.
This is potentially controversial, and the safeguards will be critical.
Current proposals limit the power to established debts of up to £5,000 for individuals and £10,000 for companies. They also include a minimum notice period, affordability checks, rights to challenge deductions and a proposed “refund first” safeguard where a deduction is disputed.
A Code of Practice and draft legislation are still to follow. We will monitor the proposals closely, including how HMRC identifies taxpayers within scope and protects those experiencing financial difficulty or affected by incorrect information.
The Budget introduces a Pension Tax Allowance from 6 April 2027 to 5 April 2030.
Its purpose is to prevent pensioners whose total income is no more than the full new State Pension from being brought into tax solely because the State Pension has risen above the standard Personal Allowance.
The allowance will operate as a reduction in the tax due, rather than as an extension of the tax-free Personal Allowance. For 2027/28, the maximum reduction will be approximately £94.
Those with total income above the full new State Pension will lose £1 of that reduction for every £3 of additional income. Based on the published 2027/28 figures, partial relief will apply between approximately £13,037 and £13,319.
This taper produces an effective marginal tax rate of approximately 53% within that very narrow income band. Although the amounts involved are modest, the mechanism is unusually complex and may particularly affect people whose income varies around the level of the full new State Pension.
HMRC intends to apply the allowance automatically using the information it holds. Pensioners should nevertheless check PAYE coding notices and tax calculations carefully, particularly where they have variable private pension, savings, property or employment income.
The Government has also reversed the planned reduction in the Cash ISA limit. It will remain at £20,000 from April 2027.
However, as noted above, the rates applying to savings and property income will rise by a further two percentage points from 6 April 2027. Combined with the increase previously announced at the 2025 Budget, these rates will sit four percentage points above the corresponding rates for employment income.
This will be particularly relevant to landlords, savers and private clients with income-producing assets.
For employees and self-employed people who use their own car or van for work, the 55p tax-free and tax-deductible mileage rate for the first 10,000 business miles will become permanent.
From 6 April 2027, the rate for mileage above 10,000 miles will rise from 25p to 35p.
The temporary 0% VAT rate for domestic electricity will be extended until 1 July 2027.
A Budget speech is only the beginning. Many announcements require legislation, consultation or detailed HMRC guidance before their full effect becomes clear.
Our corporate, personal tax and business advisory teams are reviewing both the headline announcements and the more technical provisions behind them. We will update this article as consultations, draft legislation and HMRC guidance clarify how the measures will work in practice.
We will also work with clients to identify the changes that require action, as well as those where the best course is to wait for further clarity.
To discuss how the Autumn Budget could affect you, book a consultation with:
Our team can help you understand what the announcements mean for your circumstances and plan appropriately as the rules develop.
This article provides an initial general overview and does not constitute tax, legal or investment advice. The effect of the Budget measures will depend on individual circumstances and the final legislation.
The figures and dates have been checked against the official Budget 2026 document, Pension Tax Allowance explainer and HMRC debt-recovery consultation response.
Author, Michael Haig - Partner