Autumn Budget 2026: What Small Businesses Should Know
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Autumn Budget 2026: What Surrey and Hampshire Businesses Should Know Before 28 October
The Chancellor, John Healey, delivers his first Budget on Wednesday 28 October 2026, shortly after Prime Minister’s Questions. With a new Prime Minister and a new Chancellor in post since the summer, there is so much more guesswork around this Budget than usual.
This guide separates what is already settled from what is still speculation. It also covers the checks worth making now, while today’s rules still apply.
What has been already confirmed: these are the changes you can make plans around
| Change | When | Who it affects |
| Dividend tax rose: basic rate from 8.75% to 10.75%, higher rate from 33.75% to 35.75%. Additional rate unchanged at 39.35% | This came into effect on 6th April 2026 | Company directors who pay themselves in dividends |
| Business Asset Disposal Relief (the reduced capital gains tax rate when you sell all or part of a qualifying business) rose from 14% to 18% | As above, this also came into effect on 6th April 2026 | Anyone selling all or part of their business |
| National Living Wage rises to £12.71 an hour (21+). £10.85 for 18–20s, £8.00 for 16–17s and apprentices | This one came into effect on the 1st April 2026 | Every employer |
| Main capital allowance writing down rate cut from 18% to 14%, alongside a new 40% first-year allowance | In effect since 1 April 2026 for companies and 6 April 2026 for sole traders and partnerships (first-year allowance since 1 January 2026) | Businesses buying vans, machinery and equipment |
| Making Tax Digital for Income Tax (HMRC’s rules for keeping digital records and sending quarterly updates through compatible software) extends to sole traders and landlords with qualifying income over £30,000 | This one comes into effect on the 6th April 2027 | Sole traders and landlords |
| Unused pension pots brought into inheritance tax | This one also comes into effect on the 6th April 2027 | Business owners with pension savings |
| 20% business rates cut for pubs, social clubs and live music venues in England (the prime minister mentioned this in PMQ’s on 21st October 2026) | April 2027 | Pubs and venues |
| Income tax and employer NI thresholds stay frozen | Until April 2031 | Everyone |
| National Insurance relief on salary sacrifice pension contributions capped at £2,000 a year | 6th April 2029 | Employers and staff using salary sacrifice |
Here’s a handy infographic of how this looks visually with key dates:
For more details on last year’s measures and what the then, chancellor, Rachel Reeves did, see our 2025 Budget guide.
What to look out for on October 28th
Nothing below has been confirmed. These are the areas most likely to affect small businesses, based on what the government has signalled and what commentators expect.
• Income tax, VAT and National Insurance rates. The government has committed not to raise these for working people, and no rate rise is expected. Thresholds are a different matter, as the freeze to 2031 already pulls more people into higher bands.
• Business rates and Small Business Rates Relief. The government has promised wider reform at this Budget, including changes to Small Business Rates Relief, according to Grant Thornton. No details have been published yet. Today, a single property needs a rateable value below £15,000 to qualify, as Elmbridge Borough Council sets out. This applies to England only.
• The VAT registration threshold. The threshold has been £90,000 since April 2024, and neither of the last two Budgets changed it, according to the House of Commons Library. A Treasury minister said in March 2026 that the UK threshold is already jointly the highest in the OECD, so a change would be a surprise. It is still worth watching if your turnover is close to £90,000.
• Capital gains tax. Not expected to be a headline measure, but still one to watch, especially if you are planning to sell a business or property.
• E-invoicing. HMRC plans mandatory electronic invoicing for VAT-registered businesses, and a full roadmap is expected at this Budget. Read our guide to HMRC’s e-invoicing plans for the background.
• Investment incentives. Watch for any changes to capital allowances or the Annual Investment Allowance, currently £1 million.
What five checks you should make before Budget day
Most Budget changes start from a set date, often the following April. That gives you time to plan, but only if you know where you stand today.
1. Directors: review your salary and dividend mix. Check what you have drawn so far this tax year and how much of your basic-rate band is left. The higher dividend rates make this more valuable than in previous years.
2. Planning to buy equipment? Know your numbers. If you intend to buy a van, plant or machinery in the next 12 months, note the cost and timing. If allowances change, you will be ready to act.
3. Thinking of selling or passing on the business? The 18% Business Asset Disposal Relief rate and the 2027 pension changes both affect exit plans. Talk to us before you commit to a date.
4. Turnover close to £90,000? Track it monthly. VAT registration is based on a rolling 12-month total. If the threshold moves, you will want an accurate figure on the day.
5. Sole traders and landlords over £30,000: get MTD-ready now. April 2027 is fixed. Choosing software and setting up digital records takes time. Our Making Tax Digital guide explains what you need. Also, contact us, if you need any help here.
One more check: if you already file under Making Tax Digital, your second quarterly update is due by 7 November.
What is means for the businesses we cover in Surrey and Hampshire
Many of the businesses we support in Godalming, Guildford, Farnham, Farnborough and Petersfield are owner-managed limited companies, sole traders and construction firms working under CIS.
For them, the biggest confirmed pressures are already known: higher dividend tax, rising wage costs and Making Tax Digital from April 2027.
The Budget may add to that list or ease it. Either way, a clear plan made before 28 October puts you in a stronger position than reacting afterwards.
Plain-English Budget advice from JML
We have helped businesses across Surrey and Hampshire plan around Budget changes since 1993. Once the Chancellor has spoken, we will update this page with what has changed and what it means for you.
Want to talk through your own position before or after Budget day? Get in touch with JML and we will work out what it means for your business.
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