Presented on 28 October 2026, the UK Budget 2026 announced changes affecting savers, landlords, people with small trading income, business owners and households. This guide explains who is affected, when each change starts and what to check now. It covers selected practical points, not every Budget measure. Source: HM Treasury Budget 2026.
UK Budget 2026 at a glance: The Lifetime ISA withdrawal charge for certain first-home purchases above £450,000 fell to 20% on 29 October 2026. Most tax changes below are planned for 2027 and still need legislation. A replacement ISA for new savers is proposed for April 2029. Sources: HM Treasury Budget; HMRC tax legislation overview.
The Budget did not raise the main Income Tax rates on earnings. However, the £12,570 Personal Allowance and £37,700 basic-rate limit remain frozen through 2030–31 under an earlier decision. As earnings rise, more income may be taxed or move into a higher band. The basic-rate limit works differently under devolved Income Tax rules. Sources: HM Treasury Budget; HMRC threshold policy.
Property and savings income: higher rates from April 2027
From 6 April 2027, the government plans basic, higher and additional rates of 24%, 44% and 49% on taxable savings income. It plans the same rates for taxable property income. The savings rates would apply across the UK. Property rates are planned for individuals in England, Wales and Northern Ireland, although Wales can set its own rates; Scotland has separate powers. Tax would apply to taxable income, not to the balance in a savings account or every pound of rent collected. Source: HMRC tax information and impact note.
If you let property, update your forecast of taxable rental profit and the cash reserved for tax. If you earn savings interest, check what falls outside an ISA and whether a savings allowance applies. The Budget proposes keeping the adult cash ISA limit at £20,000 from April 2027. This is part of the £20,000 overall ISA limit, not an extra allowance. The cash ISA proposal still needs secondary legislation. Sources: HMRC Budget legislation overview; HMRC ISA overview; HMRC rates and allowances.
Small trading income: the allowance rises to £3,000
The trading allowance and related Self Assessment reporting threshold for trading income are due to rise from £1,000 to £3,000 from 6 April 2027. The change is aimed at people with small amounts of trading or miscellaneous income, such as occasional paid services. It does not change the £1,000 allowance for the 2026–27 tax year. Source: HMRC trading allowance note.
A higher allowance does not remove every tax or reporting obligation. If your gross trading receipts exceed the relevant threshold, or you must file a return for another reason, check the full rules. Keep records of income and costs even if you expect to fall below the limit. Source: HMRC trading allowance note.
Lifetime ISA: what first-time buyers need to know
Since 29 October 2026, an existing Lifetime ISA holder buying a first home above the £450,000 cap may pay a 20% withdrawal charge if the purchase meets the other conditions. That is lower than the usual 25% charge, but the withdrawal is not charge-free. Other non-qualifying early withdrawals generally still carry a 25% charge. A qualifying first-home purchase at or below the cap can still be charge-free. Source: HMRC Lifetime ISA withdrawal guidance.
The government also proposes a First Time Buyer ISA from April 2029 for new savers. It would replace the Lifetime ISA for new accounts. Existing Lifetime ISA holders are expected to be able to keep contributing and using their accounts. The new ISA still needs legislation and provider details. If you are buying now, follow the current Lifetime ISA and conveyancing rules. Source: HMRC tax legislation overview.
Business owners: reliefs for sales and equipment
The government plans to cut the lifetime Business Asset Disposal Relief limit from £1 million to £500,000 for qualifying sales on or after 6 April 2027. Previous qualifying gains count towards this lifetime limit. The relief rate has been 18% since 6 April 2026; the Budget proposal changes the limit, not the rate. Check eligibility, timing and commercial terms before making a sale decision. Sources: HMRC Budget measure; HMRC relief guidance.
For qualifying plant and machinery, the main-rate first-year allowance is planned to rise from 40% to 50% for spending from 1 January 2027. The main-rate writing-down allowance would fall from 14% to 12% for periods beginning on or after 1 April 2027 for Corporation Tax or 6 April 2027 for Income Tax. Transitional rules may affect periods spanning the change. Full expensing and the £1 million Annual Investment Allowance may also apply, so compare the available reliefs before buying equipment. Source: HMRC capital allowances note.
Making Tax Digital: a first-year penalty easement, not a pause
People joining Making Tax Digital for Income Tax in April 2027 are due to receive no penalty points for late submission of their first four quarterly updates for 2027–28. They still need to keep digital records and send updates. A late annual return is treated separately. The Budget delays the start for some taxpayer groups, but not for everyone due to join in 2027. Check your own start date and eligibility in current HMRC guidance. Sources: HM Treasury Budget; HMRC MTD guidance.
For the existing system and a practical records checklist, see The Perry's Making Tax Digital guide. Its 2026 first-year dates should not be treated as the deadlines for the 2027 entry group.
Household energy: support differs by nation
In England, a £100 Household Energy Payment is planned from January 2027 for eligible households whose main home is in Council Tax bands A to D. The full rules are still to come. Devolved administrations have funding for similar support, but their rules may differ. The temporary 0% VAT rate on qualifying domestic electricity in Great Britain is extended until 1 July 2027. The Treasury estimates that this could lower the annual Ofgem price cap by around £50 in April 2027; individual savings will vary. Sources: government household energy guidance; HM Treasury Budget.
UK Budget 2026: what to do next
Start with the measures that affect you and the date each begins. Landlords can update their 2027–28 tax forecasts. People with small trading income can keep records and use the current allowance until the new rules start. Prospective buyers can check Lifetime ISA rules with their provider and conveyancer. Business owners can compare reliefs before a sale or equipment purchase.
This is general information, not advice for an individual tax position. Unless already in force, the measures may change through legislation or later guidance. Check the current official rules before acting, and seek professional advice for a significant decision.
Sources and further reading
- HM Treasury: Budget 2026
- HMRC: Budget 2026 overview of tax legislation and rates
- HMRC: Budget 2026 tax documents
Source check: 3 November 2026. Tax rules, legislation and HMRC guidance can change. Corrections and source policy.
A moment for your view
What did you think?
Your feedback helps us choose what to explain next.
One reaction per article each day from your connection. Reactions are shared privately with the editor. Send a correction or a message →
How feedback is recorded
We keep article reaction totals and a temporary coded check based on your internet connection to limit repeated submissions. The check expires within 24 hours and is removed by scheduled cleanup. This feature stores no names, email addresses, cookies or browser storage, and sends no data to an outside feedback service. People using the same connection may share the daily limit.
