What was expected prior to the Budget?
Chancellor John Healey delivered his Autumn Budget on 28th October 2026, and analysts expected it to be shaped by the country’s public debt crossing £3 trillion for the first time (95% of GDP), rising bond yields (over 5%) and increasingly narrow fiscal headroom. The Labour Government manifesto had previously pledged not to increase Income Tax, National Insurance or VAT on working people. The Budget was largely expected to focus on taxing wealth over income once again and maintaining fiscal discipline amid slower growth, sticky inflation and high debt. While the main taxes were likely to remain unchanged, the expectation was that wealthier households were set to face higher taxation following the Budget.
What changes did the Budget actually bring?
Well, as the Chancellor had promised to stick to the previous Chancellor’s (Rachel Reeves) fiscal rules, he required debt to fall as a share of GDP and for day-to-day spending to be funded by revenue by 2029-30. This constraint meant that the Government found themselves in the position of having to once again either cut spending or find new revenue sources. So, the way they have proposed to do this is as follows –
Income and Related Taxes:
- National minimum wage to rise by 3.9% from April 2027.
- From April 2027, the rates of income tax applicable to property income will be increased to: 24% for basic rate, 44% higher rate, and 49% additional rate.
- The threshold for Business Asset Disposal Relief in Capital Gains Tax (CGT) has been lowered from £1 million to £500,000.
- The higher mileage allowance rate has been raised by 10p from 25p to 35p per mile for company car drivers. The rate of 55p per mile for the first 10,000 miles remains unchanged.
- Self-employed new fathers or new parents in a same sex couple will be eligible for two weeks’ support worth up to £194 a week in the future. Currently if you are a new father or new parent in a same sex couple you are only entitled to Statutory Paternity Pay if you are employed.
- The Carer’s Allowance ‘cliff edge’ will be scrapped from 2030/31. This means that carers who earn over the allowance will not lose the benefit.
- The threshold at which retail, hospitality and leisure businesses pay rates has increased from £12,000 to £18,000.
- From April 2027 the trading allowance will increase from £1,000 to £3,000. This provides relief for trading and miscellaneous income e.g. for those who buy/sell on e-bay.
Pensions:
- Full State Pension will rise to £13,036 from April 2027.
- New Pension Tax Allowance for pensioners with income up to the new full state pension so that they will not pay income tax on their State Pension during the term of the current Parliament.
- Whilst announced before the Budget, it is important to also point out that from 2030 the ‘Triple Lock’ on State Pensions will be changing. Under the new plans it will rise by the higher of inflation, 2.5%, or the amount needed to keep the value of the State Pension in line with average wages.
Property and Wealth:
- The Cash ISA cut for those under age 66 has now been scrapped and the current Cash ISA limit will remain at £20,000 tax-free for people of all ages (above 18 years old otherwise JISA limit applies).
- Fuel duty 5p cut has once again been extended, this time to July 2027.
- Gas standing charges will be scrapped by 2027 at the earliest.
- VAT cut on electricity bills extended to July 2027.
- Green levies on household energy bills taken off.
- Households in Council Tax bands A to D will receive a £100 energy payment.
- A new CGT relief, dubbed ‘Founder’s Relief’, unveiled, which is a 10% rate on lifetime gains of up to £10 million for the ‘founders of successful firms’.
- For gambling, the machine game duty will rise from 20% to 25%.
- Adult gaming centres and vape shops will not qualify for business rates relief.
- From late 2027, the Stamp Duty and Stamp Duty Reserve Tax which is applied to shares, will be replaced by the new Securities Transfer Tax.
Although these proposals have been officially laid out in the Autumn Budget by the Government and analysed and approved by the Office for Budget Responsibility (OBR), it is worth noting that some of these proposals may not happen within the remainder of the term of the current Labour Government or may be scrapped and ultimately not happen at all.
If you are worried about any of the above changes that are due to come in and if they will affect you in any way, then please seek financial advice. Here at Fogwill & Jones, our advisers are more than happy to talk you through the changes in more detail and offer you solutions to mitigate the effects of these changes on your personal finances.
Simon Briggs
Chartered Financial Planner, Director & Compliance Manager
Liam Burnett
Investment Analyst