Budget 2026

Budget 2026: if a sale is in your plans, April 2027 is now a deadline

Anna Stafford, AI Accounts. 28 October 2026

Written on Budget day, 28 October 2026, from the documents published on GOV.UK that afternoon. For owner-managed UK limited companies turning £1m to £15m, and their directors.

The change that matters most for owner-managed companies is Business Asset Disposal Relief, which has been halved.

Most of what you’d normally check after a Budget hasn’t moved. Corporation tax, dividend tax, employer National Insurance and the VAT threshold are all where they were. So this one is mostly about selling a business, buying equipment and next year’s wage bill.

If you might sell your company

From 6 April 2027 the Business Asset Disposal Relief lifetime limit falls from £1m to £500,000. The rate stays at 18%.

If you pay higher rate tax and sell with a gain of £1m or more, the second £500,000 will be taxed at 24% instead of 18%. That’s up to £30,000 more tax (£500,000 x 6%). There are transitional rules for certain contracts not completed by 6 April 2027 and for some share reorganisations.

There is also a new Founders’ Relief: a 10% capital gains tax rate on up to £10m of lifetime gains, for qualifying disposals on or after 6 April 2027. It’s aimed at founders and significant early investors in high-growth, innovative UK companies, and the conditions are out for consultation until 30 November 2026. Plenty of profitable owner-managed companies may not count as “high-growth, innovative” in the sense the consultation means, so I wouldn’t plan a sale around it until the rules are final.

If a sale, a management buyout or a sale to an employee ownership trust is likely in the next 18 months, the timing against 6 April 2027 is worth looking at now, not in March.

How you pay yourself: nothing changed

• Corporation tax stays at 19% and 25%, with the £50,000 and £250,000 limits, for the years to March 2029.
• Dividend tax stays at 10.75%, 35.75% and 39.35%, with the £500 dividend allowance, for 2027/28.
• Employer National Insurance stays at 15% above £96 a week, with the £10,500 Employment Allowance.
• Employee National Insurance stays at 8% and 2%.
• Income tax bands stay frozen for 2027/28.

So the salary and dividend split you use now still works next year. The government is consulting on how distributions to shareholders are taxed, with changes planned for April 2028. Nothing to do yet, but it’s one to watch.

If you buy equipment

• From 1 January 2027 the first-year allowance on main rate plant and machinery goes up to 50%.
• From 1 April 2027 the main rate writing-down allowance falls to 12% for companies (6 April 2027 for income tax).
• The Annual Investment Allowance stays at £1m.

Claiming up front gets more valuable and spreading the claim over years gets less valuable. If you have a large purchase planned around the turn of the year, the date you spend it can change the claim.

If you employ people

The National Living Wage goes up 3.9% to £13.21 an hour on 1 April 2027. If you have staff on or near it, put it in next year’s budget and pricing now.

Business mileage paid above 10,000 miles goes from 25p to 35p a mile from 6 April 2027.

Mandatory payrolling of benefits in kind starts on 6 April 2027 for company cars and vans, fuel and medical benefits, and on 6 April 2028 for most other benefits. If you still report these on P11Ds, your payroll will need setting up for it.

R&D, VAT and the rest

• R&D claims made on or after 1 April 2027 will no longer need a claim notification form. No change to the R&D rates.
• VAT registration stays at £90,000 and deregistration at £88,000. VAT e-invoicing is planned from April 2029.
• Online marketplaces will become liable for VAT on sales by UK businesses selling more than £90,000 a year through a platform, from October 2027.
• No change to inheritance tax business relief.

If you hold money or property personally

From 6 April 2027 savings income and property income are taxed at 24%, 44% and 49%. If you hold rental property in your own name, or keep large cash balances outside the company, it’s worth looking at where those assets sit.

What to do now

For most owner-managed companies this isn’t a Budget that forces a change this week. There are two things to act on. If you might sell in the next few years, the Business Asset Disposal Relief change makes 6 April 2027 a real date. And next year’s wage rise and the capital allowance changes should go into your forecast now.

Sources, all published on GOV.UK on 28 October 2026: Budget 2026: Overview of tax legislation and rates, and its Annex A: rates and allowances; the Budget 2026 document; HM Treasury, “Budget 2026: Breathing space for today, hope for the future”; HM Treasury and HMRC, “Founders’ Relief: technical consultation”. This article is general information, not advice for your circumstances. Last reviewed 28 October 2026 by Anna Stafford, Founder. Prepared with our qualified accountants.