Autumn Budget 2026: What Does It Mean for Small Businesses?

The Autumn Budget, delivered on 28 October 2026, included several important tax and business announcements that could affect small and medium-sized businesses over the coming years.

While there were no major changes to the headline rates of Corporation Tax or employer National Insurance, a number of measures could have a meaningful impact on business owners, particularly those considering selling their company, operating in retail or hospitality, or receiving income from property investments.

We've taken a closer look at the announcements most relevantto SMEs and what they could mean in practice.

Changes to Business Asset Disposal Relief
One of the most significant announcements for business owners was the reduction in the lifetime limit for Business Asset Disposal Relief (BADR).

BADR allows qualifying individuals to pay a reduced rate of Capital Gains Tax when selling a business or disposing of qualifying shares.

From 6 April 2027, the lifetime limit will fall from £1 million to £500,000.

For a qualifying business owner making a £1 million gain, this could mean an additional £30,000 in Capital Gains Tax.

The change is particularly relevant to business owners approaching retirement or considering a sale. Although the new limit doesn't take effect until April 2027, preparing a business for sale can take considerable time, so reviewing your plans early could be beneficial.

We will be exploring the changes in more detail in our separate article on Business Asset Disposal Relief and succession planning.

New Founders' Relief announced
Alongside the BADR changes, the Government announced plans to introduce Founders' Relief.

The proposed relief would allow eligible founders of high-growth, innovative companies to pay Capital Gains Tax at 10% on up to £10 million of lifetime gains.

This could provide a substantial tax benefit for qualifying entrepreneurs, particularly those building businesses with significant growth potential.

However, the relief will not be available to every business owner. Eligibility requirements and further details are subject to consultation, so businesses should avoid making decisions based on an assumption that they will qualify.

Business rates support for retail, hospitality andleisure
There was some welcome news for businesses operating in retail, hospitality and leisure.

From April 2027, the threshold for 100% Small Business Rate Relief for qualifying properties in these sectors will increase from £12,000 to£18,000, with tapered relief available for properties with rateable values up to £21,000.

A two-year real-terms freeze on business rates bills for qualifying properties was also announced.

For businesses facing rising operating costs, reducing afixed overhead such as business rates could provide valuable support.

It's worth checking whether your premises will qualify forthe revised relief and factoring any potential savings into your financialforecasts.

Higher tax rates on property and savings income
Individuals receiving property or savings income will face furtherincreases in Income Tax from April 2027.

The Budget confirmed an additional two-percentage-pointincrease, on top of the increase announced previously.

This means the relevant tax rates will rise to 24%, 44% and49%, depending on the individual's tax band.

For landlords, the changes could reduce the profitability of rental properties, particularly where maintenance, mortgage and other operating costs are already affecting returns.

Landlords may wish to review the performance of their portfolios and consider whether their current ownership structure remains appropriate.

Our separate article on property income tax explores these considerations in more detail.

Employment costs and Income Tax thresholds
The National Living Wage will increase by 3.9% from April 2027.

Although the increase is closer to inflation than some previous rises, it will still affect payroll costs for businesses employing staff at or near the minimum wage.

Employers should also consider the wider effect on pay structures, as increases at the lower end of the salary scale can create pressure to review wages across other roles.

Income Tax thresholds will remain frozen, meaning employees may move into higher tax bands as their earnings increase.

There was no further increase announced to the main employer National Insurance contribution rate, but employment costs remain an important consideration for SME budgeting.

What should SMEs do following the Budget?
For many small businesses, the immediate impact of the Budget may be limited. However, some announcements create important opportunities for financial and tax planning ahead of April 2027.

Business owners considering retirement or selling their company should review the potential impact of the BADR changes. Landlords should assess how the higher property income tax rates could affect their investment returns, while retail, hospitality and leisure businesses should check whether they could benefit from the revised business rates relief.

More generally, now is a sensible time to revisit financialforecasts and consider how the changes could affect profitability, cash flowand longer-term plans.

At Bernard Rogers & Co, we help businesses understand how tax changes affect their individual circumstances and make informed financial decisions.

If you'd like to discuss how the Autumn Budget could affect you or your business, get in touch for a free, informal chat.

This article reflects the Autumn Budget announcements asat 30 October 2026. Some measures remain subject to legislation or furtherconsultation.

‍