Autumn Budget 2026: What was Announced?

In the weeks leading up to the announcement, speculation centred on potential changes to personal taxation, pension rules, business taxes and financial support for households. But what did the Chancellor announce, and what could it mean for the UK’s flexible workforce?

In this article, SB Pay breaks down the key announcements from the Autumn Budget 2026, with a particular focus on the implications for UK contractors working through an umbrella company, including any changes that could affect their take-home pay, tax obligations and employment arrangements.

Key Announcements

• National Minimum Wage: From 1 April 2027, the National Living Wage will rise to £13.21 per hour, with rates of £11.27 for 18–20-year-olds and £8.31 for under-18s and eligible apprentices. Agencies and employers should review pay rates, assignment budgets and payroll arrangements ahead of April.
• Business mileage: The 55p per mile rate for the first 10,000 qualifying business miles in an employee’s or self-employed person’s own car or van is being made permanent. The rate above 10,000 miles will increase to 35p from 6 April 2027.
• Travel and subsistence expenses: Domestic Benchmark Scale Rates will be modernised from April 2028, alongside a simpler, tiered overseas system. Employers reimbursing qualifying business expenses should monitor the detail and review their expense policies accordingly.
• Support for self-employed parents: A new Parental Allowance will extend support to eligible self-employed fathers, partners and adopters in Great Britain from April 2029.
• Limited company contractors: Company distribution rules will change from April 2028, following consultation on draft legislation in 2027. Contractors operating through limited companies should discuss potential implications for extracting company funds with their accountant.
• Business investment allowances: The main writing-down allowance will fall to 12% from April 2027, while the main first-year allowance increases to 50% from January 2027. Businesses purchasing equipment should review the effect on tax relief and cash flow.
• HMRC compliance activity: Funding for 670 additional compliance officers reinforces the importance of accurate payroll, tax reporting and records throughout the recruitment supply chain.
• Reducing business administration: Further regulatory changes aim to save businesses almost £800 million annually. Agencies should watch for specific implementation details before changing their processes.
• Fuel costs: The temporary 5p-per-litre fuel duty cut is extended to 1 July 2027, with the planned inflation increase also deferred until then.

Further Announcements in the Autumn 2026 Budget

Energy and Cost of Living

• Household energy support: A £100 payment will support households in council tax bands A–D in England, reaching up to 20 million homes. Scotland, Wales and Northern Ireland will receive corresponding funding to provide support. Payments in England will begin from January 2027.
• Gas standing charges: The government has asked Ofgem to remove standing charges from domestic gas bills in Great Britain, targeting the end of 2027 or as soon as possible afterwards. These costs will move into usage charges, so the effect on individual bills will depend on consumption.
• Electricity bills: The temporary VAT cut on domestic electricity will continue until 1 July 2027, extending support with household energy costs.
• Food and heating costs: Import tariffs will be temporarily suspended on more than 100 food products, alongside kerosene heating oil and fertilisers. The measures aim to reduce import costs and ease pressure on households and agricultural businesses.

Personal Finances

• Cash ISA allowance stays at £20,000: The government has reversed the planned reduction to £12,000 for under-65s from April 2027. The overall annual ISA allowance remains £20,000 across your ISAs combined.
• Higher tax on savings interest: From 6 April 2027, tax rates on taxable savings income will be 24% for basic-rate, 44% for higher-rate and 49% for additional-rate taxpayers. Interest sheltered within an ISA remains tax-free.
• Savings allowances remain unchanged: The Personal Savings Allowance stays at £1,000 of interest annually for basic-rate taxpayers and £500 for higher-rate taxpayers. The starting-rate savings band remains £5,000 for eligible people on lower incomes.
• Possible incentive for first-time investors: The government will explore a new incentive for people opening a stocks and shares ISA for the first time. Details are still being developed with industry.
• Children’s savings limits unchanged: Junior ISA and Child Trust Fund annual allowances remain £9,000 for 2027/28.

Benefits and Pensions

• Tax protection for pensioners: A new Pension Tax Allowance will ensure pensioners whose total income does not exceed the full new State Pension do not pay income tax. It will apply from 6 April 2027 for three tax years.
• Carer’s Allowance: A gradual reduction in payments will replace the current approach of withdrawing the entire allowance when earnings exceed the weekly limit. Implementation is planned during 2030–31, so this is not an immediate change to entitlement.

Business Taxes

• Bank profits: The Bank Corporation Tax Surcharge will temporarily increase from 3% to 6% for 15 months, running from 1 January 2027 to 31 March 2028.
• Business rates relief: From April 2027, the rateable value threshold for full Small Business Rate Relief will increase from £12,000 to £18,000 for qualifying retail, hospitality and leisure properties in England. This is targeted relief, rather than a general increase for all business premises.
• Vape shops and adult gaming centres: Business rates reliefs will be removed for these premises from April 2027.
• Gambling machines: Duty on higher-stakes machines will increase from 20% to 25%. The existing treatment of lower-stakes machines will be maintained.
• Online marketplace VAT: Online platforms will take greater responsibility for collecting VAT on qualifying sales by UK businesses from October 2027. The changes aim to tackle non-compliance and reduce the disadvantage faced by businesses already accounting for VAT correctly.

Housing

• Social and affordable homes: An additional £1.5 billion will support social and affordable housing in England, bringing investment in the 10-year programme to more than £40 billion. This provides a further commitment to housing delivery that construction businesses and labour suppliers can factor into their longer-term planning.
• Support for rough sleepers: A further £432 million will extend support in England across 2027–28 and 2028–29, continuing efforts to help people move off the streets beyond the existing Christmas initiative.

Devolution

• Locally retained business rates: The government intends local and regional government to retain all business rates income by the end of the decade. Mayors will receive a 20% share of locally retained business rates from 2027.
• Income tax revenues: Mayors will receive an allocated share of income tax receipts from 2028, providing another source of funding for regional priorities.
• Regional investment: Funding of £285 million in 2027–28 will support areas moving towards devolution agreements or Strategic Authority status, helping local leaders develop and deliver growth plans.
• Funding larger projects: The government will work with mayors on a £1.5 billion financing facility to support investment in larger regional projects.

And Finally…

• Self-Assessment payments: From April 2029, taxpayers who make payments on account will move towards smaller, more regular payments during the year. Self-employed workers should monitor the implementation details and consider how the revised schedule will affect cash flow.
• PAYE and VAT payments: From April 2029, businesses will generally need a Direct Debit instruction for these liabilities. Other payment methods will remain available before a specified cut-off, with Direct Debit used to collect unpaid balances.
• Electronic invoicing: VAT invoices will need to use a prescribed electronic format from April 2029. Agencies and other VAT-registered businesses should review their invoicing systems as technical guidance becomes available.
• Trading Allowance: From 6 April 2027, the allowance will increase from £1,000 to £3,000, providing greater tax relief for eligible trading and miscellaneous income.
• Artificial intelligence: More than £700 million will support AI security, capability and adoption, including an additional £120 million for the AI Security Institute. The package also includes local partnerships to help businesses and communities adopt AI.
• Tackling misogyny: Funding of £15 million will support work to prevent misogyny and mobilise further investment in initiatives supporting women and girls.

Please visit the SB Pay blog regularly to keep up to date with the latest new.