Here's what the Autumn Budget 2026 means for small businesses, what it does to your costs, and what you can do about it today.
This page covers announcements confirmed in the Budget documents on GOV.UK. We'll update it as more detail is published.
Autumn Budget 2026 Key Takeaways
- No rise in the headline rates of income tax, National Insurance or VAT.
- Shops, pubs, cafés and other retail, hospitality and leisure businesses in England pay no business rates up to a rateable value of £18,000 from April 2027, up from £12,000.
- Pubs, social clubs and most live music venues get 35% off their business rates in 2027/28 and 2028/29.
- 0% VAT on qualifying electricity is extended from 31 March to 30 June 2027.
- The National Living Wage rises to £13.21 an hour from 1 April 2027.
- The 5p fuel duty cut is extended to 1 July 2027.
The big announcement for small businesses: business rates relief
The biggest change for small firms is business rates. From 1 April 2027, retail, hospitality and leisure (RHL) properties in England get full Small Business Rate Relief up to a rateable value of £18,000, up from £12,000. Relief then tapers to nothing at £21,000, up from £15,000.
The government says this takes around 70,000 more RHL businesses out of business rates altogether, and that half of all RHL properties will pay none. The higher thresholds run until 31 March 2029 and will be reviewed at the 2029 revaluation.
"If you run a shop, pub or café and your rateable value is under £18,000, you could stop paying business rates altogether. Check yours on GOV.UK today. It takes two minutes." Phil Foster, CEO, Love Business
Pubs, social clubs and live music venues: 35% off
Pubs, social clubs and all but the largest live music venues get an extra 20% off their business rates, on top of the 15% relief already in place. That brings the total to 35% off in 2027/28 and 2028/29. Live music venues with a rateable value of £1 million or more stay at 15%.
The government estimates the cut will help nearly 32,000 venues and save the typical pub around £1,100 in 2027/28. Cafés and restaurants don't get this extra 20%, but they can still benefit from the higher relief threshold and the bill freeze below.
A two-year freeze for every retail, hospitality and leisure property
Every qualifying RHL property in England, whatever its size, has its business rates bill capped at inflation (CPI) in 2027/28 and 2028/29. The cap doesn't cover increases from property improvements or the loss of other reliefs.
Taken together, the government says every RHL business in England will see its rates frozen in real terms, reduced or cut to zero from April 2027.
Not retail, hospitality or leisure? Your bill is likely to rise
Every business rates multiplier in England goes up from 1 April 2027. Offices, workshops, warehouses and other non-RHL premises get no new relief, so most will pay more.
| Small business multiplier (rateable value under £51,000) | 43.2p | 44.7p |
| Standard multiplier | 48.0p | 49.7p |
| High-value multiplier (rateable value £500,000 and over) | 50.8p | 52.5p |
| Small business RHL multiplier | 38.2p | 39.7p |
| Standard RHL multiplier | 43.0p | 44.7p |
A 1p supplement for ratepayers who don't get Transitional Relief has been extended for another two years. Vape shops lose Small Business Rate Relief and the RHL multipliers, and adult gaming centres lose the RHL multipliers.
Business rates are devolved, so these changes apply in England only. Scotland, Wales and Northern Ireland get extra funding they can use for similar support if they choose.
What to do: look up your rateable value on GOV.UK. If you run an RHL business in England with a rateable value under £21,000, ask your council what relief you'll get from April 2027. Thinking of moving premises? Our moving premises checklist covers what happens to your water supply and contracts.
What else changed in the Autumn Budget 2026
We've split the rest of the Budget into three questions every business owner asks: what it does to your running costs, whether it helps you grow, and what happens to your cash.
1. Running costs
Good news
- Tax rates frozen: no rise in income tax, National Insurance or VAT
- Fuel stays cheaper: the 5p cut stays until 30 June 2027
- Rates cut for shops, pubs and cafés: 70,000 more pay nothing
- Less red tape: the government says its latest package saves businesses almost £800 million a year
Watch out
- Staff cost more: the minimum wage rises to £13.21 an hour from April 2027
- Overseas software and ads may cost 20% more: this applies if you're not VAT-registered
The National Living Wage for workers aged 21 and over rises by 3.9%, from £12.71 to £13.21 an hour, on 1 April 2027. The government puts that at £910 a year more in gross pay for a full-time worker, and employer National Insurance comes on top.
From April 2027, the reverse charge on services bought from overseas suppliers will apply only to VAT-registered UK businesses. If you're under the £90,000 VAT threshold and buy software, advertising or other services from a provider based abroad, that provider may start adding 20% UK VAT to your invoices. If you're VAT-registered, you can usually reclaim it, and our guide to buying a mobile phone through your business explains how VAT reclaim works on business contracts.
The red tape package, announced on 23 October, makes it simpler for small firms to bid for public contracts, cuts the number of ONS business surveys, pauses the Companies House profit and loss filing requirement for April 2028, and keeps tariff-free imports on more than 250 products until December 2028. From October 2027, online marketplaces will also collect VAT on qualifying sales by UK sellers.
2. Growth
Good news
- Equipment still tax-deductible: write off up to £1 million in the year you buy
- Easier to borrow: more funding to help smaller firms get finance
- Side businesses: earn up to £3,000 tax-free
Watch out
- Selling your business: less tax relief, with the limit halved to £500,000
- Big purchases: slower tax relief on spending above £1 million
Full expensing and the £1 million Annual Investment Allowance stay, so most small firms can still deduct the full cost of qualifying equipment in the year they buy it, including kit such as business mobiles bought outright. The main first-year allowance rises from 40% to 50% for spending from 1 January 2027, while the main writing-down allowance falls from 14% to 12% from April 2027. The lower rate mainly matters for spending above the £1 million allowance.
The British Business Bank gets extra capital, with a focus on improving access to finance for smaller firms and a new venture-debt offer. The trading allowance triples from £1,000 to £3,000 from 6 April 2027, which helps anyone starting a side business.
If you're planning to sell, the lifetime limit for Business Asset Disposal Relief halves from £1 million to £500,000 for disposals from 6 April 2027. Founders of high-growth, innovative companies may qualify for the new Founders Relief instead, a 10% Capital Gains Tax rate on up to £10 million of lifetime gains. Speak to your accountant before you sell.
3. Cash is king
Cash in
- No VAT on electricity: extended to 30 June 2027, but only for small users
- Energy-hungry manufacturers: 20–25% off electricity
- Driving for work: 55p a mile tax-free is now permanent
Cash out
- Fuel costs rise: about 7.6p a litre more from July 2027
- Business rates rise: most firms pay more from April 2027
From April 2027, the British Industrial Competitiveness Scheme gives around 10,000 energy-intensive manufacturers a 20–25% discount on electricity, including a back payment for 2026/27. It's aimed at big users, not most small businesses.
The tax-free rate for using your own car or van for work stays at 55p a mile for the first 10,000 business miles, and the Budget makes that rate permanent. From 6 April 2027, the rate for miles above 10,000 rises from 25p to 35p.
Fuel duty stays at 52.95p a litre until 30 June 2027. From 1 July 2027, it rises to 60.59p, an increase of 7.64p per litre.
Business energy: what the Budget means for your bills
0% VAT on electricity, now until 30 June 2027. Since 1 October 2026, qualifying electricity in Great Britain has been charged at 0% VAT instead of 5%. The Budget extends this by three months, to 30 June 2027, instead of ending it on 31 March 2027.
Most businesses pay 20% VAT on electricity, and that hasn't changed. The 0% rate applies to supplies that would normally get the reduced 5% rate:
- sites using no more than 33 kWh a day (1,000 kWh a month)
- supplies where 60% or more of the electricity is for domestic use
- electricity a charity uses for its non-business activities
Gas isn't included, and Northern Ireland stays at 5%. HMRC has confirmed there are no changes to the supplies that qualify, so low-usage business sites are covered until 30 June 2027. From 1 July 2027, qualifying electricity goes back to 5% VAT.
"If your business uses a small amount of electricity, you should be paying 0% VAT right now. Take the kWh on your bill and divide by the number of days. If it's 33 or under, you qualify. Still being charged VAT? Ring your supplier." Phil Foster, CEO, Love Business
If your business is VAT-registered, you can usually reclaim the VAT on your electricity anyway, so the 0% rate matters most to micro businesses that aren't VAT-registered. Your usage and your MPAN (supply number) are both on your bill, and our guide to MPAN and MPRN numbers shows where to find them. VAT works differently on water, and our guide on whether businesses pay VAT on water bills explains how.
Gas standing charges are going, but only for homes. The government will ask Ofgem to remove standing charges from household gas bills and move those costs into unit prices. Nothing was announced for business gas. Business energy isn't price capped, so the deal you sign is the price you pay. Compare business gas and business electricity before your next renewal, and read our guide on how long to fix your business energy.
No new policy costs on bills. No new policy costs will be added to energy bills until a Cost Control Framework is in place at the 2027 spending review, and the planned tax on gas bills to fund hydrogen projects (the Gas Shipper Obligation) is scrapped. Network charges from your local network operator still make up part of every electricity bill, and our guide to Distribution Network Operators explains how they work.
What didn't change
Plenty stayed the same, which gives you some certainty for planning:
- The headline rates of income tax, National Insurance and VAT.
- Employer National Insurance stays at 15%, and the Employment Allowance stays at £10,500 for 2027/28.
- The VAT registration threshold stays at £90,000.
- Corporation Tax stays at 19% on profits up to £50,000 and 25% above £250,000.
- Dividend tax rates are unchanged for 2027/28.
- There's no VAT cut on business gas or on electricity charged at 20%.
- There's no new business rates relief for offices, workshops and other non-RHL premises.
Key Dates
| til 30 June 2027 | 0% VAT on qualifying electricity in Great Britain |
| 1 January 2027 | Main first-year allowance rises to 50% |
| 31 January 2027 | The copper phone network (PSTN) switches off. Phone lines, card machines and alarms still on copper lines need moving to digital. |
| 1 April 2027 | National Living Wage rises to £13.21. Business rates changes in England start. British Industrial Competitiveness Scheme starts. Overseas services reverse charge change. Writing-down allowance falls to 12% for companies. |
| 6 April 2027 | Trading allowance rises to £3,000. Business Asset Disposal Relief limit falls to £500,000. Tax-free mileage above 10,000 business miles rises to 35p. Tax on property and savings income rises by 2 percentage points. |
| 1 July 2027 | Fuel duty rises to 60.59p a litre. VAT on qualifying electricity goes back to 5%. |
| October 2027 | Online marketplaces start collecting VAT on qualifying sales by UK sellers. |
| April 2029 | VAT and PAYE paid by direct debit. VAT invoices issued electronically. |
What to do now
- Check your rateable value. If you run a shop, pub, café or other RHL business in England, see whether you'll pay less, or nothing, from April 2027.
- Check the VAT on your electricity bill. If you use 33 kWh a day or less, you should be paying 0% until 30 June 2027.
- Know when every contract ends. Your renewal window usually opens six months before your contract ends. Miss it, and you can roll onto higher out-of-contract rates. Not sure of your dates? A Letter of Authority lets us check with your supplier for you.
- Let myHUB track your end dates. myHUB tracks every end date for you, even for contracts you didn't switch with us.
- Compare your essentials. Compare your energy, broadband, water and phone lines. It takes minutes. On water, a quick audit shows whether you're being overcharged, and our water rates guide explains each charge on your bill.
- Plan for January, April and July. The copper phone network switches off on 31 January 2027, so check that your phone lines, card machines and alarms are ready. Then build the wage rise, any rate increases and the fuel duty rise into your budget.
- Talk to your accountant before you sell your business or make a big purchase.
We've been doing this for 19 years and have helped over 500,000 businesses save on their bills. Compare your business energy, broadband, water and phones in one place, and watch Phil's no-nonsense advice for business owners on Business UnPHILtered.
Autumn Budget 2026 FAQs
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What does the Autumn Budget 2026 mean for small businesses?
It kept the headline rates of income tax, National Insurance and VAT, raised Small Business Rate Relief for shops, pubs and cafés in England, gave pubs 35% off business rates and extended 0% VAT on qualifying electricity to 30 June 2027. Wages, most business rates bills and fuel duty all rise during 2027.
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Is there a VAT cut on business electricity?
Only for low users. Electricity that qualifies for the reduced rate, such as at sites using 33 kWh a day or less, is charged at 0% VAT in Great Britain until 30 June 2027. Most businesses still pay 20%.
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What is the new Small Business Rate Relief threshold?
From 1 April 2027, retail, hospitality and leisure properties in England get 100% relief up to a rateable value of £18,000, tapering to zero at £21,000. Other businesses stay on the existing £12,000 and £15,000 thresholds.
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Do cafés and restaurants get the extra 20% business rates cut?
No. The extra 20% is for pubs, social clubs and most live music venues. Cafés and restaurants can still benefit from the higher relief threshold and the two-year freeze on bills.
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Are gas standing charges being scrapped for businesses?
No. The plan to remove gas standing charges covers household bills only. Nothing was announced for business gas contracts.
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When does the National Living Wage go up?
On 1 April 2027, from £12.71 to £13.21 an hour for workers aged 21 and over.
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When does the fuel duty cut end?
The 5p cut stays until 30 June 2027. Fuel duty rises to 60.59p a litre from 1 July 2027.
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Did the employer National Insurance change?
No. The Budget made no change to the headline rates of National Insurance
