Autumn Budget 2026 - Overview of Key Tax and VAT Announcements

The UK Chancellor John Healey delivered the UK Govenments 2026 Autumn Budget and a summary of the key announcements for VAT and the wider tax landscape are detailed below. The general theme of the budget has been to help families and households cope with the cost of living crisis and on the other hand taxing more affluent sectors of the economy such as banking, but also helping stuggling businesses and entreprenuers get their businesses off the ground.

Key Annoucements

Autumn Budget 2026 - Overview of Key Tax and VAT Announcements

The cut to VAT on electricity bills from 5% to zero had been expected to end in March 2027. That will now be extended until July.taking £50 pounds off the annual price cap.

Online marketplace sellers will be targeted to ensure they are unable get around VAT.

New Pension Tax Allowance where pensioners with income up to the value of the full new state pension will not pay income tax in this Parliament.

He announces an increase in the threshold for small business rate relief for retail hospitality and leisure businesses from £12,000 to £18,000.

Banks will pay an extra 3% surcharge, starting January 2027 and will run for just 15 months, starting from next January.

Tax-free cash ISA allowance to remain at £20,000

The threshold for business asset disposal relief in capital gains tax will reduce from from £1m to £500,000

The mileage rate for people using their cars for work will see an increase in the higher mileage rate from 25p to 35p per mile and the earlier increase to the standard mileage rates will become permanent.

On gambling, machine game duty will rise from 20% to 25% for higher stakes machines.

Adult gaming centres and vape shops will not qualify for business rates relief.

There will be no change on tax on income from dividends, and no change on tax to income from employment.

Measures for entrepreneurs, including raising the amount people can earn from a new venture tax free from £1,000 to £3,000 and new young entrepreneurs allowance, which will cover a year of living costs for young founders.

There will be a new “founders’ relief”, a 10% rate on lifetime gains, up to £10m for the founders of businesses.

A new scale-up programme to female founders

Twenty million households in council tax bands A-D will receive a £100 ‘household energy payment' this winter - paid directly into bank accounts for help with rising energy bills

Tax rates on property and savings income will increase by a further two percentage points from April 2027, adding to the rise announced by Rachel Reeves last year

See full list of the VAT and Tax changes announced here. Budget 2026 — Overview of tax legislation and rates ...

Autumn Budget 2026 - Overview of Key Tax and VAT Announcements

The cut to VAT on electricity bills from 5% to zero had been expected to end in March 2027. That will now be extended until July.taking £50 pounds off the annual price cap.

​

Online marketplace sellers will be targeted to ensure they are unable get around VAT.

​

New Pension Tax Allowance where pensioners with income up to the value of the full new state pension will not pay income tax in this Parliament.

​

He announces an increase in the threshold for small business rate relief for retail hospitality and leisure businesses from £12,000 to £18,000.

​

Banks will pay an extra 3% surcharge, starting January 2027 and will run for just 15 months, starting from next January.

​

Tax-free cash ISA allowance to remain at £20,000

​

The threshold for business asset disposal relief in capital gains tax will reduce from from £1m to £500,000

​

The mileage rate for people using their cars for work will see an increase in the higher mileage rate from 25p to 35p per mile and the earlier increase to the standard mileage rates will become permanent.​

​

On gambling, machine game duty will rise from 20% to 25% for higher stakes machines.

​

Adult gaming centres and vape shops will not qualify for business rates relief.

​​

There will be no change on tax on income from dividends, and no change on tax to income from employment.

​​

Measures for entrepreneurs, including raising the amount people can earn from a new venture tax free from £1,000 to £3,000 and new young entrepreneurs allowance, which will cover a year of living costs for young founders.

​​

There will be a new “founders’ relief”, a 10% rate on lifetime gains, up to £10m for the founders of businesses.

​​

A new scale-up programme to female founders

​​

Twenty million households in council tax bands A-D will receive a £100 ‘household energy payment' this winter - paid directly into bank accounts for help with rising energy bills

​

Tax rates on property and savings income will increase by a further two percentage points from April 2027, adding to the rise announced by Rachel Reeves last year

​

See full list of the VAT and Tax changes announced here. Budget 2026 — Overview of tax legislation and rates ...

​ ​

The mileage rate for people using their cars for work will see an increase in the higher mileage rate from 25p to 35p per mile and the earlier increase to the standard mileage rates will become permanent.