Budget October 2026: The Good, the Bad and the Ugly

Budget October 2026: Breakdown for Individuals, Business and Property

 

The October 2026 Budget has just been delivered, and Zee breaks down what it means for you personally, for your business, and for your property portfolio. As with every Budget review, it’s split into the good, the bad and the ugly. The headline verdict: for business owners and property investors especially, this was an opportunity missed.

 

Part 1: Personal Tax Changes

 

The Good

• The cash ISA cap cut has been scrapped. The Chancellor, John Healey, dropped the plan to reduce the cash ISA allowance from £20,000 to £12,000 with age restrictions. Zee sees this as a wise move.
• State pension relief. The state pension was due to come into scope of income tax from 2027/28. A relief has been introduced so that if the state pension is your only income, you’ll pay no income tax — and as the state pension carries no National Insurance, no NI either.
• Trading allowance increase. From April 2027, the trading allowance rises from £1,000 to £3,000. This helps sole traders and anyone earning income in their own name from a trading business. A property business does not count.
• Domestic electricity. A 0% rate will apply to domestic electricity until June 2027, and possibly longer. It was previously due to expire in March.
• Business mileage. From April 2027, the rate for business miles over 10,000 rises by 10p to 35p, while the 55p rate for the first 10,000 miles is already in place. This helps business owners using a personal vehicle, sole traders, and employees whose employer pays less than the full allowable amount (they can reclaim the difference). It must be genuine business mileage — home to work doesn’t count.

The Bad

Clawback of the state pension relief. The relief only fully protects you if the state pension is your only income, which is unlikely for most people. If you have other income, the relief is clawed back, with Zee describing it as being taken back at every £3 of other income earned above the threshold.

The Ugly

• Paying tax earlier. A consultation has been launched on getting tax collected earlier. Currently tax is paid in January and July, with Making Tax Digital coming in for income tax. Under the proposal, from April 2029, you could be asked to pay earlier. The concern is that it isn’t guaranteed you’d be paid back if you have a bad year — so you could end up paying tax on income that never materialises.
• Higher savings income tax. The government didn’t heed the warnings on savings. From April 2027, savings income will be taxed at 24%, 44% and 49%.

 

 

Part 2: Business Tax Changes

 

The government billed this as the best business Budget ever. Zee doesn’t think it lived up to that. There was some good in it, but overall it was an opportunity missed.

The Bad: Business Asset Disposal Relief Cut Again

From April 2027, Business Asset Disposal Relief (still widely known as Entrepreneurs’ Relief) is being reduced further:

	Previously	Currently	From April 2027
Lifetime limit	£10 million	£1 million	£500,000
Tax rate	10%	18%	18%

If you haven’t claimed this relief, or are about to, Zee’s advice is to act before 6 April. Otherwise, the next half a million of gains loses the relief, costing a difference of around 6% (the gap between the 18% relief rate and the 24% higher rate). It wasn’t a huge relief to begin with, but it was still a relief.

The Good: A New Founders’ Relief

The Chancellor also introduced a founders’ relief, which appears to bring back the £10 million limit at a 10% rate. It’s not yet clear which founders or industries will qualify, or how it will interact with Business Asset Disposal Relief, but if it works as described, Zee sees it as a good move and potentially one of the few real positives for business owners.

The Bad: Writing Down Allowance Reduced

The main rate of writing down allowance, which controls how quickly you can claim tax relief on business investment, is being cut again. A couple of years ago it was 18%, it’s now 14%, and from April 2027 it falls to 12%. Full expensing and similar exceptions still apply to new assets, but for older assets this is a substantial reduction, and Zee believes it’s seen as an easy way for government to raise revenue.

Minimum Wage Rise

The minimum wage is rising by 3.9% from April 2027. Zee’s view is that this still hits businesses at a time when many are struggling to hire and train staff. Employing someone with no experience on a minimum wage of roughly £23,000–£24,000 (for someone over 20) means they would need to generate around £70,000 for the business to make it worthwhile. Zee argues that most roles don’t achieve that, because it takes a few years for young people to develop — and these rises risk cutting them off at the knees.

There wasn’t much that was ugly for business in this Budget, largely because most of it had already been flagged.

 

Part 3: Property Tax Changes

 

The Good: Stamp Duty and Capital Gains Tax Unchanged

Looking for good news, there are two items worth celebrating — largely because they didn’t get worse:

• Stamp Duty Land Tax did not increase, which is the first Budget in some time where this has been the case. The same applies to LBTT in Scotland and LTT in Wales, unless the local governments change it.
• Capital Gains Tax is unchanged at 18% and 24%.

The frustration is that when a tax simply staying the same is cause for celebration, it shows how the Budget has become a tool focused on how much more can be taxed, rather than on growing businesses and people’s wealth.

The Bad: Business Rates Relief Only for Some

Business rates have been hurting many businesses. Thresholds have been raised, which is welcome, but only for retail, hospitality and leisure. All other businesses, including smaller businesses, will remain at £12,000, with transitional relief up to £15,000. Zee describes this as a half measure.

The Ugly: Property Income Tax Rates Rise Again

From April 2027, property income received in your own name will be taxed at:

Tax Band	Property Income Rate from April 2027
Basic rate	24%
Higher rate	44%
Additional rate	49%

Note this is an additional 2% on top of the 2% increase that had already been announced. The Chancellor didn’t highlight it, but according to the government’s own website, landlords holding property in their own name are being hit hard.

The Ugly: Holiday Tax and Mansion Tax Confirmed

• Holiday tax. Run by councils, this applies to nightly rentals and is due to start in April 2028.
• Mansion tax. From April 2028, anyone owning a property in their own name worth more than £2 million will face this new charge.

 

The Verdict: A Big Disappointment

Summarising across all three areas: there was some good for individuals, not enough for businesses, and for property, nothing much beyond stamp duty and capital gains tax staying the same, plus relief on business rates for those in hospitality. Property entrepreneurs are being hammered again, with the ugly side of this Budget — particularly the 24% property income rate — being quite bad.

There had been rumours about National Insurance, but this has effectively been achieved another way: by creating different income tax thresholds and increasing the rates. Whether that’s sustainable is uncertain as more landlords will likely leave the industry, especially those holding property in their own name. With so much changing, getting advice on holding property through a company and on structuring generally matters more now than ever.

 

Plan Your Response to the Budget with GoldHouse Accounting

 

With deadlines such as the April 2027 changes to Business Asset Disposal Relief, higher property income rates, and the mansion and holiday taxes on the horizon, now is the time to review your position. At GoldHouse Accounting, our tax advisors and wealth management consultants help business owners and property investors understand what the Budget means for them and put the right structure in place. Get in touch to find out how this could affect you.

This article reflects our personal views and analysis of the Budget as announced, recorded immediately afterwards. Some details, including the founders’ relief and the consultation on earlier tax payments, were not yet fully clear at the time of recording and may change. This is not personalised tax advice — speak to a qualified tax advisor about how the Budget could affect your specific circumstances.