Autumn Budget

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Chancellor of the Exchequer John Healey presented his first Budget on 28 October 2026, promising ‘Breathing Space now, Hope for the Future’. Mr Healey said that ‘my choice in the Budget today is to give families and businesses some breathing space now, and to begin the radical reform of energy to reduce bills in the future’.

Some of the key highlights include:

  • The basic rate band remains at £37,700, with the higher rate threshold remaining at £50,270. The additional rate threshold remains at £125,140. The freeze of these thresholds will continue until 5 April 2031.
  • The government is increasing the rates of Income Tax applicable to property income by 2% from the previous rates announced at Budget 2025. The separate tax rates for property income from 2027/28 are:

          – 24% for basic rate taxpayers

          – 44% for higher rate taxpayers

          – 49% for additional rate taxpayers

  • Dividends received above the Dividend Allowance will be taxed at the following rates for 2027/28:

           –10.75% for basic rate taxpayers

          –35.75% for higher rate taxpayers

          – 39.35% for additional rate taxpayers.

  • The government will not apply the late submission penalty points to quarterly updates for the tax year 2027/28, where the taxpayer was required to join Making Tax Digital (MTD) for Income Tax from April 2027.
  • The government has announced increased rates of the National Living Wage (NLW) and National Minimum Wage (NMW) which will come into force from 1 April 2027. The hourly rates which will apply are as follows:

         –21+ – £13.21

        –18-20 – £11.27

        –16-17 – £8.31

       –Apprentices – £8.31

For full details of the budget, please use the following link:https://files.mercia-group.com/BB26/PDF/Wettone_Matthews_(W-6182122)_Oct26.pdf