On Wednesday 28th October 2026, Chancellor John Healey announced the governments budget for the financial years ahead.
Here is a summary of the announcements relevant to limited company directors, sole traders and landlords*;
Limited Companies
No changes to Corporation Tax rates, the main rate remains capped at 25%. “Full Expensing” (100% capital allowances in year one against Corporation Tax) to be retained.
No changes to Dividend Tax rates, these remain at 10.75% (basic rate), 35.75% (higher rate) and 39.35% (additional rate).
The main rate of Writing Down Allowances (capital allowances on the main pool) will reduce from 14% to 12% from April 2027.
The main rate First Year Allowance (available on qualifying new plant and machinery) will increase from 40% to 50%.
Business Asset Disposal Relief (BADR) lifetime limit reduced from £1 million to £500,000 from 6th April 2027. The 18% Capital Gains Tax rate under BADR is unchanged.
New “Founders Relief” introduced, offering a 10% Capital Gains Tax rate on up to £10 million of lifetime gains for eligible founders of high-growth, innovative companies.
The 55p per mile mileage rate (approved mileage rate) for the first 10,000 business miles made permanent, with the rate above 10,000 miles increasing from 25p to 35p from 6th April 2027.
Sole Traders / Partnerships
No changes to the main rates of Income Tax or Class 4 National Insurance for Sole Traders.
The trading allowance for new ventures will increase from £1,000 to £3,000, the amount that can be earned before tax is payable.
A new Young Entrepreneurs Allowance will provide a year of living costs for young founders starting a business. Further details are to follow.
Self-employed fathers and partners will be eligible for parental pay for the first time.
Payments on Account for Self-Assessment will be replaced with smaller, more regular payments throughout the year from April 2029. I presume this will be linked to the roll out of Making Tax Digital for Income Tax (MTD for ITSA).
The 55p per mile mileage rate (simplified expenses) for the first 10,000 business miles made permanent, with the rate above 10,000 miles increasing from 25p to 35p from 6th April 2027.
Online marketplaces (such as Amazon and eBay) will collect VAT on behalf of UK sellers making more than £90,000 of sales through the marketplace from October 2027.
No changes to Making Tax Digital for Income Tax (MTD for ITSA), which will apply to Sole Traders with qualifying income over £30,000 from April 2027 and over £20,000 from April 2028, read more here - https://matrixaccountancyservices.org.uk/news/making-tax-digital-for-self-assessment-mtd-for-itsa-latest-update-for-limited-company-directors-sole-traders-partnerships-and-landlords
Landlords
A further 2% increase in Income Tax paid on rental income from April 2027, on top of the 2% increase announced in the 2025 Budget. The tax rates will be 24% at the basic rate, 44% at the higher rate and 49% at the additional rate.
This increase applies to unincorporated landlords only, limited company landlords continue to pay Corporation Tax on rental profits.
No changes to Capital Gains Tax (CGT) on residential properties, which remains at 18% and 24%.
HMRC will consult on expanding third-party reporting of property income, meaning HMRC will receive more data on rental income directly.
No changes to Making Tax Digital for Income Tax (MTD for ITSA) for Landlords, which will apply to landlords with qualifying income over £30,000 from April 2027, read more here - https://matrixaccountancyservices.org.uk/news/making-tax-digital-for-self-assessment-mtd-for-itsa-latest-update-for-limited-company-directors-sole-traders-partnerships-and-landlords
Other Updates
No increase to the main rates of Income Tax and National Insurance for Employees.
A further 2% increase in tax paid on interest income (excluding ISAs) above the relevant thresholds from April 2027.
The planned reduction of the Cash ISA allowance will not go ahead, the allowance remains at £20,000 a year.
Increase in the National Living Wage and National Minimum Wage by 3.9% from April 2027.
The 5p fuel duty cut and freeze extended until 1st July 2027.
The 0% VAT rate on domestic electricity extended until July 2027.
Small Business Rates Relief threshold for retail, hospitality and leisure businesses in England increased from £12,000 to £18,000 from April 2027. A further 20% business rates reduction for pubs, music venues and social clubs.
HMRC will be given a new power to recover lower-value tax debts directly from those who can afford to pay but repeatedly fail to do so.
*Please note, all information is accurate as of 28th October 2026 and may be subject to change.
Summary
Unincorporated landlords should note the further change to Income Tax rates from April 2027. Combined with last year's Budget, the tax on rental income will increase by 4% in total from April 2027.
As Dividend Tax rates are unchanged, the effective tax rate on income from a limited (close) company taking into account Corporation Tax and Dividend Tax remains approximately 27.7% on earnings above the £12,570 personal allowance. For some landlords, holding property in a limited company may now be worth reviewing, however transferring existing properties can trigger Stamp Duty and Capital Gains Tax, so detailed advice should be taken first.
Business owners planning to sell their business should note the reduction in Business Asset Disposal Relief from 6th April 2027.
For detailed advice and guidance on how the changes in the budget may impact you or your business you can contact me by email at will@matrixaccountancyservices.com or by calling 01788 486065