The main changes explained.

This Budget brings another rise in minimum wages, higher tax on savings and rent and some help with mileage and energy costs. Here are the main points for businesses and households:

Our view

In our opinion, employers are again being asked to carry a heavy burden. After several years of increasing employment costs, another wage rise puts more pressure on the money left after paying the bills. Better pay helps employees, but businesses still have to find the cash.

The main changes at a glance

What changes	What it means	When
Minimum wages rise	Higher pay for staff and higher costs for employers	1 April 2027
Mileage allowance improves	More tax relief for longer business journeys	6 April 2027
Tax on savings and rent rises	Some people will keep less of that income	6 April 2027
Business sale relief is reduced	Some owners could pay more tax when selling	6 April 2027
More digital tax records	More sole traders and landlords must use compatible software	6 April 2027

What stays the same

There is no new increase in the main rates of tax on earnings, National Insurance or standard VAT. Corporation Tax and dividend tax rates are also unchanged by this Budget. However, frozen tax thresholds can still mean a bigger bill as income rises.

What helps

The fuel duty cut continues for longer. Cash ISA limits are protected and some high street businesses receive better business rates relief. The following pages explain who benefits and where costs rise.

Based on announcements at 28 October 2026. Future measures may need legislation. England is the focus where rules differ. Budget  |  HMRC rates

If you employ people

From 1 April 2027, the minimum hourly rates increase as follows. The adult rate rises by 50p or about 3.9%.

Employee	Current hourly rate	New hourly rate
Age 21 and over	£12.71	£13.21
Age 18 to 20	£10.85	£11.27
Under 18	£8.00	£8.31
Eligible apprentices	£8.00	£8.31

The apprentice rate applies to those under 19 or those aged 19 and over in their first year. Others need the rate for their age. Apply increases from the first pay period starting on or after 1 April.

The wage rise over time

Adult rate each April. It covered ages 23 and over in 2021 to 2023 and ages 21 and over from 2024. The dashed part is the announced 2027 rate.

What it costs in pounds

For someone paid for 37.5 hours a week over 52 weeks, the 50p rise adds £975 a year. For 5 employees that is £4,875 before extra employer National Insurance and pension costs.

Where the standard 15% employer National Insurance rate applies, that could add another £146.25 per employee. Any unused Employment Allowance may cover some of it. The allowance remains £10,500 for eligible employers.

Allow for the increase in prices and work agreed for next year. Staff already paid above the minimum may also expect their pay gap to be maintained.

Company benefits need a payroll change

An earlier announcement means company cars, vans, fuel and medical benefits must normally go through payroll from 6 April 2027. Tax and employer National Insurance on those benefits will be reported during the year. Most other benefits follow in April 2028.

Sources: Budget paragraph 6.128 and HMRC guidance. Wage examples use the hours stated. Official wage rates  |  Employer rates  |  Company benefits

Running or selling a business

Business mileage

For qualifying work journeys in your own car or van, the 55p rate for the first 10,000 miles becomes permanent. It already applies from 6 April 2026. The rate above 10,000 miles increases from 25p to 35p from 6 April 2027.

Business mileage	Current tax year	From 6 April 2027
First 10,000 miles	55p per mile	55p per mile
Above 10,000 miles	25p per mile	35p per mile
Amount for 15,000 miles	£6,750	£7,250

That extra £500 is an allowance, not a £500 tax saving. At a 20% income tax rate, the extra deduction saves £100. Employers can reimburse qualifying employee mileage within the approved rates. Eligible sole traders can use them for simplified vehicle expenses. Ordinary commuting does not count and company cars have different rules.

Fuel and electric cars

The 5p fuel duty cut continues to 1 July 2027. Pump prices can still change. From April 2028, an earlier announcement introduces an extra mileage tax of 3p for electric cars and 1.5p for plug in hybrids. Vans are outside this charge at launch.

Buying equipment

For some equipment purchases, the amount deducted from taxable profit in the first year rises from 40% to 50% from 1 January 2027. Where costs are claimed over several years, the main annual rate falls from 14% to 12% from April 2027.

Many smaller businesses can still deduct the full qualifying equipment cost straight away under existing reliefs, including the £1 million Annual Investment Allowance. Cars and some other purchases are treated differently. A tax deduction reduces taxable profit, it does not refund the purchase price.

Selling a business

From 6 April 2027, the lifetime amount of qualifying gains covered by Business Asset Disposal Relief falls from £1 million to £500,000. The relief’s tax rate stays at 18%, and earlier claims count towards the limit.

For a qualifying £1 million gain, with no previous claims and the rest taxed at 24%, the smaller limit means £30,000 more tax. Anyone already planning a sale or retirement should factor this into the proceeds they expect to keep.

A separate proposed 10% Founders’ Relief is aimed at qualifying innovative businesses with high growth. It will have specific conditions and will not replace the ordinary sale relief for everyone.

Budget detail  |  HMRC allowances  |  Electric car charge

Savings, rent and family finances

Higher tax on interest and rental income

From 6 April 2027, tax rates on savings interest and property income will be 24%, 44%, and 49%. This includes an increase already announced last year, plus a further increase in this Budget.

Rates apply after relevant allowances and reliefs. Property rates shown apply in England, Wales and Northern Ireland. Savings rates apply across the UK.

For example, £5,000 of taxable savings interest, all in the basic rate band, means £1,200 of tax instead of £1,000. That is £200 more than now. Rental tax also depends on expenses and mortgage interest rules.

ISAs and tax allowances

The annual ISA limit stays at £20,000, including cash ISAs. It is one combined limit across your ISAs. Savings allowances continue. The personal allowance stays at £12,570, so a pay rise can still increase the amount of income taxed.

Pensions and inheritance

A planned tax allowance, from April 2027 to April 2030, will mean eligible people over State Pension age pay no income tax if their total income is no more than the full new State Pension. The relief reduces for incomes just above that level. It does not make all pension income tax free.

An earlier change brings most unused pension funds and pension death benefits into inheritance tax from 6 April 2027. This may affect what a family inherits. Separately, pension death payments from 28 October 2026 will no longer become taxable just because the existing 2 year payment deadline was missed.

Help with household bills

Households in council tax bands A to D in England are due a £100 energy payment from January 2027. The temporary 0% VAT rate on domestic electricity is extended to 1 July 2027. These measures do not give businesses a general VAT cut on energy.

From 29 October 2026, the Lifetime ISA withdrawal charge for buying a first home above the £450,000 cap falls to 20%. Other unauthorised withdrawals keep the 25% charge.

Pension inheritance tax is an earlier measure. Budget detail  |  HMRC tax measures

Records deadlines and other changes

Making Tax Digital

This means keeping digital records and sending regular updates to HMRC using compatible software. The starting date depends on your combined income from self employment and rent, before expenses.

Relevant annual income	Income year used	Start date
Over £50,000	2024 to 2025	Already started in April 2026
Over £30,000	2025 to 2026	6 April 2027
Over £20,000	2026 to 2027	6 April 2028

Exceptions apply. For those already using the standard quarterly periods, the next update is due on 7 November 2026. April 2027 starters get relief from late filing points for their first 4 quarterly updates, but must still submit them. Payment duties and other penalties remain.

Other changes worth knowing

Business rates support improves from April 2027 for qualifying retail, hospitality and leisure premises in England. Full relief can apply up to £18,000 rateable value, with reduced relief up to £21,000. Qualifying bill rises are capped by inflation for 2 years. Eligible pubs, social clubs and most live music venues get 35% relief. These are targeted measures, not a general rates cut.

The trading allowance rises from £1,000 to £3,000 from 6 April 2027 for eligible individuals with small amounts of trading income. It cannot be claimed on top of actual expenses.

From April 2027, revised VAT rules can affect services bought from overseas by businesses that are not VAT registered. From October 2027, online marketplaces take on VAT collection for qualifying UK business sales. Personal sales are excluded.

Changes to prepare for later

From April 2029, VAT invoices must use a specified electronic format. Taxpayers making Self Assessment payments on account will also pay more regularly during the year. Businesses must set up direct debit instructions for unpaid VAT and PAYE balances, although they can still pay earlier by other methods. Details are still being developed.

The practical points

• Allow for higher wage costs when setting prices for next year.
• Keep business mileage and expense records up to date.
• Check which digital tax deadline applies to you.
• Include higher tax in the income you expect to keep from savings, rent, or a business sale.

Please see another An Accounting Gem blog: https://www.aag-accountants.co.uk/stop-copying-your-competitors-why-knowing-who-you-are-matters-more-than-how-you-look/