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Chancellor John Healey delivered his first Budget on Wednesday 28th October 2026. For small and medium-sized businesses, the biggest changes are a bigger business rates break for retail, hospitality and leisure, a 3.9% rise in the National Living Wage from April and an extension to the fuel duty cut until the end of June 2027.
Below, we cover what was announced, who it affects, when it starts and what you can do now to better plan your cash flow.
Autumn Budget 2026 at a glance
| Measure | What changed | Who it affects | When it starts |
|---|---|---|---|
| Small Business Rate Relief | Full relief threshold up from £12,000 to £18,000 rateable value, tapering to £21,000 | Qualifying retail, hospitality and leisure businesses in England | 1st April 2027 |
| National Living Wage | £12.71 to £13.21 an hour (21 and over); £10.85 to £11.27 (18 to 20) | Employers with staff on minimum wage rates | 1st April 2027 |
| Fuel duty | 5p-a-litre cut extended, so duty stays at 52.95p | Anyone running vehicles for work | Until 30th June 2027 |
| VAT on electricity | 0% rate extended | Households receiving qualifying domestic electricity supplies | Until 30th June 2027 |
| Capital allowances | Main first-year allowance up from 40% to 50%; main writing-down allowance down from 14% to 12% | Businesses buying equipment | 1st January 2027 (first-year allowance); April 2027 (writing-down allowance) |
| Business Asset Disposal Relief | Lifetime limit cut from £1m to £500,000 | Owners selling a business | 6th April 2027 |
| Business rates for pubs, clubs and live music venues | Relief up from 15% to 35% (announced in July 2026) | Venues in England, depending on size | 1st April 2027 |
| Making Tax Digital for Income Tax | Extends to qualifying income over £30,000 | Sole traders and landlords | April 2027 |
Did business rates change for small businesses?
Yes, if you’re in retail, hospitality or leisure and your business qualifies. From 1st April 2027, the Small Business Rate Relief threshold rises from £12,000 to £18,000 of rateable value, with the relief tapering off up to £21,000. The Government estimates that around 70,000 more businesses will become eligible for full business rates relief. The higher thresholds run until 31st March 2029, and other retail, hospitality and leisure businesses will see their bills frozen in real terms over the same period.
Until now, Small Business Rate Relief has meant no business rates at all on a property in England with a rateable value under £12,000, with the relief tapering off between £12,000 and £15,000. Shops, pubs, cafés, restaurants and leisure businesses are the ones that gain from the higher threshold. Vape shops and adult gaming centres are excluded from the relevant retail, hospitality and leisure business rates multipliers. Vape shops will also lose eligibility for Small Business Rate Relief from April 2027.
Pubs, social clubs and live music venues in England also get more help. Their business rates relief rises from 15% to 35% for two years from April 2027, which was announced in July. Only the very largest venues, with a rateable value of £1 million or more, stay on 15%.
If you’re not sure of your rateable value, you can look it up with the find a business rates valuation service on GOV.UK. Business rates are set separately in Scotland, Wales and Northern Ireland, so the changes above apply to England.
If a lower bill frees up some monthly cash, it could be a sensible time to plan the refit or equipment upgrade you’ve been putting off. Our retail finance and hospitality finance pages cover the options.
National Living Wage and staff costs from April 2027
From 1 April 2027, the National Living Wage for workers aged 21 and over rises from £12.71 to £13.21 an hour, a 3.9% increase. The rate for 18 to 20-year-olds goes from £10.85 to £11.27. These are the announced rates for the 2027/28 tax year.
For a full-time worker on the National Living Wage, the government estimates that the increase to £13.21 will add £910 to gross annual earnings. This is before any employer National Insurance or pension costs.
Employer National Insurance has been 15% on earnings above £5,000 a year since April 2025. The Budget didn’t announce any change to it.
The new rates start on 1 April 2027, so building them into your cash flow forecast now gives you a few months to review prices, rotas or funding before the first bigger payroll goes out. If you’re also waiting on customers to pay, invoice finance can release cash tied up in unpaid invoices, and a business loan can cover a short-term gap.
Is fuel duty going up in 2027?
Yes, but the next increase has been delayed until July.
The Budget extends the temporary cut until 30 June 2027, cancelling the further increases that had been planned for December and March. The lower rates for red diesel and other qualifying fuels are also extended to the same date.
From 1 July 2027, fuel duty is scheduled to return to the rates that applied before the temporary 5p cut, with an increase in line with RPI inflation. This gives businesses some breathing space, but it is worth factoring the planned rise into vehicle-cost forecasts.
The approved mileage rate for employees and self-employed people using their own car or van for business journeys is 55p per mile for the first 10,000 business miles and 25p for each mile above 10,000 in the 2026/27 tax year. From 6 April 2027, the rate for miles above 10,000 rises permanently from 25p to 35p. The 55p rate for the first 10,000 miles remains in place.
If fuel is one of your biggest running costs, it’s worth asking whether older, thirstier vehicles still make sense. Our commercial vehicle finance and transport and logistics finance pages explain how businesses spread the cost of replacing them.
Capital allowances: what changed for equipment and machinery?
Full expensing stays, so companies can still deduct the full cost of most new plant and machinery from their profits in the year they buy it. The Budget also raises the main first-year allowance from 40% to 50% and cuts the main writing-down allowance from 14% to 12%. The higher first-year allowance applies to spending from 1 January 2027, and the lower writing-down allowance from April 2027.
In plain terms, the first change means more tax relief up front on qualifying new equipment. The second means slower relief on spending already sitting in your main pool, because it’s written down more gradually each year.
How you fund equipment can affect which allowances you can claim, so check with your accountant before you buy. Our guide to hire purchase vs leasing explains the difference, and our asset and equipment finance page covers the options.
Selling your business: changes to Business Asset Disposal Relief
If you’re planning to sell up or retire in the next few years, this one matters. The lifetime limit for Business Asset Disposal Relief falls from £1 million to £500,000 for sales made on or after 6 April 2027. The Chancellor said three in four people who claim the relief won’t see any change.
There’s also a new Founders’ Relief for sales made on or after 6 April 2027, aimed at founders and early investors in high-growth companies. The Chancellor said it will tax up to £10 million of lifetime gains at 10%. The government is consulting on who will qualify until 30 November 2026.
The higher rate of capital gains tax stays at 24%, and the Chancellor confirmed no further changes to dividend tax.
If a sale or buy-out is on the cards, talk to your accountant early. Funding a management or partner buy-out can take time to arrange, and our professions finance team works on these regularly.
Other announcements for business owners
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Energy: around 10,000 energy-intensive manufacturers will get up to 25% off their electricity bills through the British Industrial Competitiveness Scheme. If you run your business from home, gas standing charges on household bills are also being scrapped from 2027, or as soon as possible after, with the cost moved into the price per unit instead.
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Banks: The Bank Corporation Tax Surcharge rate will rise from 3% to 6% for 15 months from January 2027.
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Gaming machines: Machine Games Duty on higher-stakes machines rises from 20% to 25% from 1 April 2027, which matters for arcades and gaming businesses.
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Unpaid tax: HMRC is getting more funding and stronger powers to collect overdue tax from people who can afford to pay but ignore its letters.
What does the OBR expect for the economy?
The Office for Budget Responsibility expects the economy to grow by 1.2% this year and 1.0% next year. Growth is then forecast at 1.6% in 2028, 1.8% in 2029, 1.7% in 2030 and 1.6% in 2031. It forecasts government borrowing falling from 4.2% of GDP this year to 1.8% by 2031/32.
What was announced before Budget day?
Several changes affecting businesses were confirmed in the weeks before the Budget, so they didn’t get much airtime in the speech:
- VAT on electricity: VAT on household electricity bills fell from 5% to 0% on 1st October 2026, and the Budget extends that until 30th June 2027. Business energy VAT treatment can differ according to the supply and eligibility rules, so small businesses should check their bill and supplier terms rather than assume the domestic zero rate applies to them.
- Making Tax Digital: from April 2027, sole traders and landlords with qualifying income over £30,000 will need to keep digital records and send quarterly updates to HMRC. The threshold drops to £20,000 in April 2028.
- Paternity pay for the self-employed: the Budget announces a new Parental Allowance for eligible self-employed fathers, partners and adopters. It is due to be introduced from April 2029
- More power for mayors: regional mayors in England will start keeping a share of locally raised business rates from spring 2027, followed by a share of income tax. They’re also getting powers to bring in an overnight visitor levy, which hotels, B&Bs and holiday lets will want to keep an eye on.
- Less paperwork: the government is consulting on cutting red tape, which it estimates could save businesses almost £800 million a year. The consultation runs until the end of November.
What should business owners do now?
- Check what actually applies to you. Some changes only cover England, some only certain sectors, and most don’t start until April 2027.
- Update your cash flow forecast. Pencil in the new wage rates, any change to your rates bill and fuel costs from the dates they start.
- Put the key dates in the diary: 1st April 2027 for the National Living Wage, April 2027 for Making Tax Digital and 1 July 2027, when fuel duty goes back up.
- Talk to your accountant before acting on tax changes, especially anything affecting dividends, selling the business or passing it on.
- Look at funding early. If you’re planning to replace equipment or vehicles, or you have a tax bill coming up (self-assessment is due on 31st January), you’ll have more options if you start now rather than the week it’s due.
How Millbrook can help
Most Budget changes end up in the same place: your cash flow. Whether it’s a bigger wage bill in April, a VAT or corporation tax payment, or equipment you’d rather not pay for in one go, the right funding can spread the cost.
Millbrook is a business finance broker, not a lender. We work with a panel of over 200 lenders, so we can look at what fits your business rather than one bank’s criteria.
We can help with:
- Business loans for working capital
- Funding for VAT, corporation tax and self-assessment bills
- Asset and equipment finance
- Commercial vehicle finance
- Invoice finance if you’re waiting on customers to pay
Check your eligibility or call us on 0333 015 3301.
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This article summarises announcements made in the Autumn Budget 2026 on 28 October 2026, based on the Budget documents published by HM Treasury and the Office for Budget Responsibility. It’s for general information only and isn’t tax or financial advice. Speak to your accountant before acting on any tax change. You can read the full Budget documents on GOV.UK.
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Frequently Asked Questions
When was the Autumn Budget 2026?
Did business rates change in the Autumn Budget 2026?
What will the National Living Wage be from April 2027?
Is fuel duty going up in 2027?
Does the Autumn Budget apply to the whole UK?
When do the Autumn Budget 2026 changes take effect?
Does the Budget change interest rates?
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