Small business budget update autumn 2026
The clocks have changed, we've had the 2026 autumn budget, spooky season is officially here.
The budget wasn't that scary for most of us, but there are a few horrors, very little in terms of treats, but we'll remind you of some tax saving tricks.
From April 2027 the tax you pay on rental income as an individual is going up to 24% from 20%, or 44% from 40% if you're in the higher rate. The relief on mortgage interest will rise to 24% as well at least.
The anti-landlord rhetoric is strong at the moment, and this change is targeting that. But most people that own property in their personal name aren't the trouble landlords, its the corporation mega landlords that this change does nothing to address.
Tax on savings income is also increasing to 24% from April 2027. Interest on ISA's is still exempt, and you can pay in £20,000 every tax year. If you haven't been using an ISA over a standard savings account, now is absolutely the time.
You can now claim 35p per mile for your mileage over 10,000 miles from April 2026, an increase from 25p. This is in addition to the first 10,000 miles increasing from 45p to 55p in April.
The trading allowance is increasing from £1k to £3k, this means you can get paid up to £3,000 in a tax year as a side hustle and pay zero tax and not have to tell HMRC a thing about it, this is from April 2027 as well.
Self employed Dads are finally going to get shared parental pay, you have to apply with the job centre and will get 2 weeks paid leave from April 2027, its nice to see self employed dads finally recognised.
MTD is here to stay, and they mentioned "more regular payments on account" for the self employed. More regular payments are coming for tax, we just don't have the details on how this will work. Will it help, will it be an absolute disaster? We won't know until we get more details in the coming years.
The needs for profit and losses to be published to companies house for small limited companies has been axed, which many will find a relief!
I really hoped to see employers national insurance drop, or at least something to support small employers. Alas, nothing of note.
Do remember if as a director you're the only person on your payroll, you can save £1,150 in employers national insurance if you add someone to payroll and pay them at least £417 in one month each tax year. They do need to be working for your business and be paid a far market rate for what they do. Contact us if you want to discuss this further.
The budget also mentioned vague and weird threats around compliance and tax collection. What I heard was more compliance checks, more rigorous checks, and HMRC being far more of a pain.
Keep good records, keep receipts for every expense you claim for 7 years. Electronic is ideal for this, if you're on software and not keeping receipts speak to us to set up a system for it.
If you're not, you need to find a system to keep receipts. HMRC are going to want to see them and are going to charge penalties if you can't prove expenses that have been claimed.
