Autumn Budget 2026: analysis, webcasts and key dates for tax and finance leaders

Other changes include:

• Following the launch of the Advance Tax Certainty Service in July 2026, the Government will lower the entry threshold for qualifying projects from £1 billion to £300 million.
• Full expense relief for qualifying capital expenditure is retained and the main rate first year allowances for other expenditure is increased to 50% for expenditure incurred on or after 1 January 2027. However, the writing down allowance rate will be reduced from 14% to 12% from 1 April 2027 (corporation tax) and 6 April 2027 (income tax).
• There will be increases of 2 percentage points of tax on savings income and income from property. There are no changes to the rates of tax on dividends or employment income. For 2027-2028, the savings basic rate will be 24%, the savings higher rate will be 44%, and the savings additional rate will be 49% and similarly the property basic rate will be 24%, the property higher rate will be 44%, and the property additional rate will be 49%.
• A reduction in the lifetime limits on business assets disposal relief (BADR) from £1m to 500k for BADR qualifying disposals made on or after 6 April 2027. There are special provisions that apply to contracts entered into before 6 April 2027 that have not been completed, and for certain share reorganisations and exchanges of securities not completed, before 6 April 2027.
• An increase in Machine Games Duty to 25% for higher stakes machines. Adult gaming centres and vape shops will not benefit from small business rate cuts.
• The limit on annual investment in cash ISAs will not now be reduced but will stay at £20,000.
• The National Living Wage and National Minimum Wage will both rise by 3.9% (rather than favouring the National Minimum Wage which applies between 18-21).
• Changes to the Company Share Option Plan (CSOP) and Enterprise Management Incentives (EMI) schemes include the CSOP individual option limit being increased to £120,000, the interaction between the CSOP and EMI individual options limits will be removed and the CSOP exercise period being extended to 15 years.

These include:

• Amendments to the capital gains participator rules for non-resident close companies, to ensure that they apply to protected cell companies. These changes will take effect from 28 October 2026.
• Amendments to the capital gains legislation to provide that a capital sum received under a contract for loss of right under that contract is in scope. This will take effect from 28 October 2026. 
• The Government will establish a mechanism to provide double-taxation relief for income received from certain foreign entities (‘US LLCs and other reverse hybrids’) where relief is presently unavailable, with further consultation before legislation in Finance Bill 2027-28.
• The establishment of the Oil and Gas Revenue Levy (OGRL), a new, permanent additional 35% levy on exceptional oil and gas revenues arising during periods of unusually high prices.
• The Government will legislate in Finance Bill 2027-28 to spread certain corporation tax impacts of changes to revenue recognition requirements for qualifying gas distribution activities evenly over five years. The measure will apply to qualifying revenues which would be passed on to consumers, where these were previously deferred and now recognised as a result of changes to accounting standards and brought into account for corporation tax.
• The introduction of a new tax regime for foreign sovereigns (see consultations)
• A new Founder’s Relief – a 10% capital gains rate up to a lifetime limit of £10 million of gains per individual for the founders and significant early investors in high-growth, innovative UK companies (see consultations).
• A VAT zero rate for medicines provided free of charge for a qualifying purpose. The measure will apply to medicines supplied for NHS treatment, including through the Early Access to Medicines Scheme and other early access arrangements, and in connection with clinical trials or receiving continued treatment following a clinical trial. This will take effect from 23 June 2026.

Modernising the distributions framework (response):

The Government will proceed with all seven proposals though these have been modified where appropriate to reflect the evidence received during the consultation, including to ensure the continued attractiveness of the UK as a global financial centre. We are working through the new proposals, although some detail on the possible targeted reliefs is not available. The Government intends to carry out a full technical consultation on the draft legislation in 2027 and for the changes to apply prospectively from April 2028, following completion of the technical consultation.

Founders’ Relief (new):

Founders’ Relief will allow for a reduced 10% rate of CGT on qualifying disposals, up to a lifetime cap of £10 million. The limit will apply per individual, so more than one individual could claim in respect of the same company. The relief will apply for qualifying disposals made on or after 6 April 2027. This consultation seeks views on how the proposed individual, company and growth and innovation conditions will work in practice. It also covers administrative and compliance considerations. Responses are sought by 30 November 2026.

Sovereign immunity (new):

From 1 January 2029, the current non-codified sovereign immunity from direct tax regime will be modernised with a new sovereign tax status. Under this new regime, foreign sovereigns will be primarily brought into the charge to UK tax on certain UK real estate income and gains but given bespoke access to the Real Estate Investment Trust regime with provision for a 15% rate on income and gains from both controlled and uncontrolled UK real estate investments. Investment management activities undertaken by sovereign investment offices and gains arising to State-operated Overseas Pension Funds will also be exempt from tax. Comments are sought  by 20 January 2027.

Corporate Tax Simplification for Business Investment (new):

This consultation identifies areas of the Corporate Tax system where targeted simplification could improve certainty and support investment, growth and competitiveness. The Government will work with stakeholders over the next year to develop and prioritise reforms.

Predevelopment costs (response):

In its response to the consultation published in July 2026 , the Government has committed to providing greater clarity on the current tax treatment of predevelopment costs. It will explore whether further changes to guidance can be made via the work on Corporate Tax Simplification for Business Investment, including more worked examples, clearer principles and improved apportionment rules to simplify the process of determining whether capital expenditure is eligible for capital allowances and provide more certainty for businesses. If necessary, the Government will explore legislative changes to provide more certainty and clarity for businesses.

Tax Support for Entrepreneurs (response): 

As part of its response, the Government has promised to legislate in Finance Bill 2026-27 for a package of targeted changes across SEIS, EIS and VCTs with the aim of making the schemes simpler, more consistent and easier to operate. As far as R&D claims are concerned the Government will remove the R&D Claim Notification Form requirement for claims made on or after 1 April 2027, and, from Autumn 2027, simplify the Additional Information Form (AIF). 

The Chancellor also launched a road map for fiscal devolution. From next year, 20% of business rates revenue will go to mayors (with 100% of business rates to be retained locally by the end of the decade) and from 2028, a share of income tax revenue will also go to mayoral areas. This is on top of the proposed overnight visitor levy.

The Chancellor promised more funding for HMRC. He also announced new payment arrangements for self-assessment taxpayers, requiring smaller regular payments.

The Government will introduce legislation in Finance Bill 2026-27 to enable HMRC to make regulations requiring VAT invoices to be issued and received in a prescribed electronic format (e-invoicing). The Government has published an implementation roadmap, which sets out the further details about e-invoicing and a timeline setting out when it will share further information and publish guidance. Please join us for our webcast at 11.00 am on 29 October.

Building on the Government’s commitment to explore Digital Reporting alongside mandatory e-invoicing, a consultation will run until 20 January 2027. 

Initiatives such as e-invoicing will support HMRC’s Tax Administration 3.0 strategy, signalling a shift towards a more automated, data-driven approach to compliance, underpinned by AI, real-time information and greater data sharing. 

Finally, the Government will proceed with prescribing corporation tax computations on a longer and more flexible implementation timetable. The Government will also introduce mandatory online filing of amended company tax returns from 1 April 2028 by directions. Enforcement arrangements for prescribed computations will not be implemented at this time.