John Healey delivered his first Budget on 28 October 2026. There were no rises to the headline rates of income tax or National Insurance, and plenty of smaller, targeted measures instead. I've been through the detail and picked out the ten changes that actually matter for the sole traders, limited companies and property businesses I work with. Most don't take effect until April 2027 or later, which is useful: it gives you time to plan rather than react.

The Budget at a glance

  • Trading allowance: up from £1,000 to £3,000, from 6 April 2027.
  • Founders' Relief: a new 10% capital gains tax rate on up to £10 million of lifetime gains, from 6 April 2027, still under consultation. Business Asset Disposal Relief's lifetime limit is halved to £500,000 from the same date.
  • Capital allowances: the first-year allowance rises from 40% to 50% from 1 January 2027, while the main writing down allowance falls from 14% to 12% from April 2027.
  • Minimum wage: up 3.9% from 1 April 2027, to £13.21 an hour for workers aged 21 and over.
  • Business rates: the threshold for full small business rate relief rises from £12,000 to £18,000 of rateable value for retail, hospitality and leisure properties in England, from April 2027.
  • Mileage: 55p a mile for the first 10,000 business miles is now permanent, and the rate above that rises from 25p to 35p from 6 April 2027.
  • Cash ISAs: the allowance stays at £20,000 a year, while tax on savings interest outside an ISA rises from April 2027.
  • Young Entrepreneurs Allowance: a new pilot in England to help with living costs in a business's first year.
  • Self Assessment: payments on account are replaced by smaller, more regular payments from April 2029.
  • Parental pay for the self-employed: two weeks of support for self-employed fathers and partners, from April 2029.

1. The trading allowance triples to £3,000

This is the one I'd most like people to hear. From 6 April 2027, the trading allowance rises from £1,000 to £3,000, and the threshold for having to report trading income through Self Assessment rises with it. If you have a side business, sell things online, or are just starting out, up to £3,000 of trading income a year will be tax-free.

Three things to know before you rely on it. First, it's set against your income, not your profit, and you use it instead of claiming your actual expenses, not as well as them. If your costs come to more than £3,000, claiming them will usually still work out better. Second, it's for individuals, not limited companies. Third, it doesn't start until 6 April 2027, so your 2025-26 return, due 31 January 2027, still uses the £1,000 figure. The separate £1,000 property allowance hasn't changed. My expense checker is a quick way to see which side of the line your costs fall, and there's more for sole traders here.

2. Founders' Relief: read the small print before you celebrate

This got the biggest headlines, and on paper it's generous: a 10% capital gains tax rate on up to £10 million of lifetime gains when a founder sells qualifying shares, from 6 April 2027. I want to be straight with you, though. For the vast majority of business owners I speak to, it won't apply, and the change that will actually affect them sits underneath it.

Who it's actually for. As proposed, you'd need to have held at least 25% of the company from the start, owned your shares for at least five years and been UK resident for five years. The company would need turnover of at least £10 million and at least 15 full-time employees in the year before the sale, and then pass two of three growth and innovation tests: strong turnover growth, headcount growing by at least 25% a year, or at least £1.5 million of research and development spending with R&D tax relief claimed on it. HMRC's own estimate is that founders in around 400 businesses a year will qualify.

What it takes away. Alongside it, the lifetime limit for Business Asset Disposal Relief, the relief most owner-managed businesses actually use when they sell, is being halved from £1 million to £500,000 for disposals from 6 April 2027. Any Business Asset Disposal Relief you've already used also reduces the Founders' Relief you could ever claim. So for a typical company owner, the honest summary is less relief than before, with a much bigger relief available to a few hundred high-growth firms.

The risk that comes with it. If a founder qualifies through the R&D test and HMRC later successfully challenges those R&D claims, the Founders' Relief can be withdrawn, with tax and interest to pay. Relief that can be taken back years after a sale isn't the same as relief you can bank.

My view. It feels to me like a measure built to look good today, with the cost pushed into the future: generous headlines, narrow eligibility, and a real cut for almost everyone else. That doesn't make it worthless. If you genuinely are building a high-growth company, it could be very valuable, and the rules are out for consultation until 30 November 2026, so they may change. But if you're thinking about selling in the next couple of years, the more pressing question is whether to complete before 6 April 2027, while the £1 million limit still applies. That's a conversation to have now, not next spring.

3. Capital allowances: more up front, less over time

This change cuts both ways. The first-year allowance for new, unused plant and machinery (not cars) rises from 40% to 50% for spending from 1 January 2027. At the same time, the main writing down allowance, the rate at which the remaining value of your equipment pool is written off each year, falls from 14% to 12% from 1 April 2027 for companies and 6 April 2027 for sole traders and partnerships. That's the second cut in two years: it was 18% until April 2026.

For most small businesses, everyday equipment spending is still covered in full by the £1 million Annual Investment Allowance, which hasn't changed. Where the cut bites is on existing pool balances and on spending the Annual Investment Allowance doesn't cover: relief on those now comes through more slowly. If you're planning a significant purchase of new equipment, the timing around 1 January 2027 is worth a conversation first.

4. The minimum wage rises 3.9%

From 1 April 2027, the National Living Wage for workers aged 21 and over rises from £12.71 to £13.21 an hour. The rate for 18 to 20 year olds goes from £10.85 to £11.27, and the rate for 16 and 17 year olds and apprentices rises to £8.31. All four rates go up by the same 3.9%.

If you employ people, budget for more than the headline figure. Employer National Insurance and pension contributions rise with pay, and staff paid just above the minimum will often expect their differential to be kept. It's worth modelling the cost for 2027-28 now, while you still have time to plan around it. That's part of how I approach payroll.

5. Business rates relief: good news, but only for some

From April 2027, the threshold for full small business rate relief rises from £12,000 to £18,000 of rateable value, with tapered relief extending up to £21,000 (previously £15,000). The government expects around 70,000 more businesses to stop paying business rates altogether.

The catch is who it covers: qualifying retail, hospitality and leisure properties in England. Shops, cafés, restaurants, pubs, gyms and hairdressers benefit. Offices, workshops and industrial units stay on the existing thresholds, and if you work from home you're unlikely to be paying business rates in the first place. If you run a high street business, look up your rateable value on GOV.UK before April so you know where you stand.

6. Business mileage: 55p is here to stay

The approved mileage rate for cars and vans went up from 45p to 55p a mile for the first 10,000 business miles earlier this year, backdated to 6 April 2026. The Budget confirmed that's now permanent, and the rate for miles above 10,000 rises from 25p to 35p from 6 April 2027. If you use your own car for the business, keep a proper mileage log: at these rates it's worth real money, and HMRC will expect to see the record. I've covered how mileage fits with other claims in my guide to business expenses.

7. Cash ISAs stay at £20,000, and that matters more than it sounds

The planned cut to the cash ISA allowance, which would have limited under-65s to £12,000 a year from April 2027, has been scrapped. You'll still be able to put up to £20,000 a year into cash ISAs.

Here's why that matters. Tax on savings interest outside an ISA rises to 24%, 44% and 49% for basic, higher and additional rate taxpayers from April 2027, and tax on rental income in England, Wales and Northern Ireland moves to the same new rates. So if you hold personal savings in ordinary accounts, using your ISA allowance first has just become more valuable. And if you're a landlord, it's worth checking what those new property rates mean for your figures before the 2027-28 tax year starts.

8. A Young Entrepreneurs Allowance

The government will pilot a Young Entrepreneurs Allowance in England, giving successful applicants support towards their living costs during the first year of their business. It's aimed at people with a good idea but no financial cushion to fall back on while they get started, which is exactly the barrier that stops a lot of young founders before they begin. The detail, including the age limit, how to apply and how much it pays, hasn't been published yet. I'll update this post when it is.

9. Self Assessment payments on account are being replaced

This one doesn't start until April 2029, but it will change how a lot of self-employed people manage their money. If you currently make payments on account, the two instalments in January and July, you'll instead make smaller, more regular payments through the year. Payments will be automated, by Direct Debit by default, with an option to pay through PAYE if you also have a salary. Around 3 million people make payments on account today.

The total tax doesn't change. The timing does, and that's where the pressure comes from. A lot of sole traders keep their tax money in the business account and use it as working capital until January. Once payments come out monthly or quarterly instead, that cushion shrinks. The time to get into the habit of setting tax aside as you earn is well before 2029, and with bookkeeping that's kept up to date, it's much easier to know what that figure should be. My Self Assessment clients will hear more from me on this nearer the time.

10. Parental pay for the self-employed

Self-employed fathers and partners have never been entitled to statutory paternity pay. From April 2029, a new Parental Allowance will give eligible self-employed fathers, partners and adopters in Great Britain two weeks of support, currently worth up to £194 a week. It's modest, and two weeks at that rate won't let most people stop working entirely. But it starts to close a long-standing gap between employed and self-employed workers, and that's worth recognising.

One more, if you're joining Making Tax Digital

If your income is over £30,000 and you're due to join Making Tax Digital for Income Tax from April 2027, the Budget confirmed you won't get penalty points for late quarterly updates during 2027-28. Your year-end return still earns a point if it's late, and late payment penalties still apply. I've updated my post on the April 2027 MTD threshold to reflect it, and my MTD threshold checker will tell you whether you're in.

A Budget headline tells you what the government wants to be known for. The detail tells you what it means for you.

What I'd do now

This is Perspective in practice, one of the five principles in the CAPID framework this practice runs on: looking past the headline to what it actually means for your business.

  • If you might sell your company in the next two years, talk to me before 6 April 2027 about timing and the Business Asset Disposal Relief limit.
  • If you're a sole trader with low turnover, check whether the £3,000 allowance will beat claiming your actual expenses from 2027-28.
  • If you employ staff, put the April 2027 wage rates into next year's budget now.
  • If you're planning to buy new equipment, think about the timing around 1 January 2027.
  • If you make payments on account, start setting tax aside every month now, so 2029 is a non-event.

Most of these measures still have to pass through the Finance Bill, and Founders' Relief is still being consulted on, so details can change. If you'd like to talk through what the Budget means for your own figures, book a free discovery call and we'll go through it properly.