In brief: The Autumn Budget 2026, delivered on 28 October, raised Income Tax on savings and property income by a further two percentage points and reversed the planned Cash ISA changes. It introduced a new Founders' Relief for a narrow group of entrepreneurs while cutting the Business Asset Disposal Relief limit to £500,000. There were no fundamental changes to Capital Gains Tax rates or Inheritance Tax, and the harder fiscal decisions appear to have been deferred.
What were the main announcements in the 2026 Budget?
The dust has now settled on the Chancellor's first Budget, and much has already been written about it. As expected, additional pressure fell mainly on the banking sector, alongside further increases in the income tax rates on property and savings income. These rose by another two percentage points, bringing the cumulative increase across the 2025 and 2026 Budgets to four percentage points.
More generally, this Budget did not address the underlying structural challenges facing the UK economy and public finances. It favored more short-term concessions over a longer-term strategy.
It also had a clear political dimension. The headline announcement was a £100 Household Energy Payment for households in council tax bands A to D in England, alongside further temporary support with energy bills, intended to help offset higher energy costs.
What happened to the Cash ISA changes?
One well-received concession is the reversal of the planned Cash ISA changes. The full £20,000 Cash ISA limit has been reinstated, and the 22% charge on cash held in investment ISAs, together with the associated anti-avoidance rules, has been removed.
Has the Budget solved the fiscal challenge?
Not really. The Government has, to some extent, deferred the more difficult fiscal decisions. Public service commitments, defense spending, social security and debt interest will continue to put pressure on public spending and, ultimately, on taxation.
The Government's room for further tax rises is also constrained by its earlier electoral commitments and by the political reaction to the National Insurance increase announced in 2024.
On the face of it, the Office for Budget Responsibility's (OBR) latest projections show the Government meeting its fiscal rules, with £15 billion of headroom against the current budget rule in 2029/30. However, this relies on some challenging assumptions. The OBR notes that, under the Government's spending plans, unprotected day-to-day departmental spending would need to fall in real terms from 2028/29.
If further fiscal consolidation is needed, the Government arguably has to act at fairly short notice. The closer we get to the next General Election, the less politically attractive significant spending cuts or tax rises become. It is therefore understandable that one immediate response to the Budget was heightened speculation about an early election.
Does the Budget change the financial planning landscape?
From a financial planning perspective, relatively few announcements materially change the landscape.
Savings and property income. The further tax increases add to existing pressures on landlords and reinforce the importance of tax-efficient investment allocation and appropriate use of allowances.
First-time buyers. The Lifetime ISA will be amended, pending its replacement with a new First-Time Buyer ISA in 2029.
Capital Gains Tax and Inheritance Tax. Despite months of speculation, Capital Gains Tax rates and Inheritance Tax saw no fundamental changes, although there were a number of technical adjustments.
What changes are coming to Self Assessment and business tax administration?
The Budget offered little meaningful tax simplification. If anything, the direction of travel remains towards greater reporting, payment and compliance requirements for taxpayers and businesses alike.
From April 2029, taxpayers who currently make Payments on Account under Self Assessment will move towards more regular payments throughout the tax year. While this is intended to bring tax payments closer to when income is earned, it will change cash flow for many taxpayers and has frustrated those with variable income. The change may reflect the significant growth in self-employment and the 'gig economy' in recent years.
Businesses will also face further administrative requirements, including mandatory Direct Debit arrangements for VAT and PAYE liabilities and the introduction of electronic VAT invoicing. Taken together, these represent another step towards a more complex and demanding tax system.
What is the new Founders' Relief?
One of the more prominent announcements was a new Founders' Relief, which the Government presented as a significant improvement to the UK's tax offer for entrepreneurs. The headline terms are familiar: a 10% Capital Gains Tax rate on qualifying lifetime gains of up to £10 million, echoing the original Entrepreneurs' Relief.
However, the relief targets only qualifying founders of high-growth, innovative companies. The criteria appear restrictive enough that very few businesses may benefit. The conditions also risk creating a considerable compliance burden for those who do qualify, potentially requiring business owners to focus on maintaining eligibility rather than on running and growing their businesses.
The detailed rules are still subject to consultation, so time will tell. Hopefully the consultation will produce a more workable regime, although the starting point is not particularly encouraging.
What is happening to Business Asset Disposal Relief?
At the same time, the Chancellor announced that Business Asset Disposal Relief (BADR), the successor to Entrepreneurs' Relief, will see its lifetime limit cut further, from £1 million to £500,000.
| Feature | Founders' Relief (new) | Business Asset Disposal Relief |
|---|---|---|
| Who it is for | Qualifying founders of high-growth, innovative companies | The wider population of business owners |
| Lifetime limit | £10 million of gains | Cut from £1 million to £500,000 |
| CGT rate | 10% | Unchanged by this Budget |
| Status | Detailed rules subject to consultation | Confirmed |
The contrast is difficult to ignore. A potentially generous relief is being introduced for a very narrow group of founders, while relief for most business owners continues to shrink. The new measure may help a small number of qualifying businesses, but it is hard to see it as a meaningful improvement to the UK's overall tax offer for business owners.
Frequently asked questions
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The Budget was delivered on 28 October 2026.
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No. The planned cut has been reversed, so the full £20,000 Cash ISA limit remains, and the 22% charge on cash in investment ISAs will not go ahead.
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A new relief offering a 10% Capital Gains Tax rate on up to £10 million of qualifying lifetime gains for founders of high-growth, innovative companies. The detailed rules are subject to consultation.
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he lifetime limit is being cut from £1 million to £500,000.
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There were no fundamental changes to Capital Gains Tax rates or wider reform of Inheritance Tax, although there were some technical adjustments.
Important information
The information in this article is for general information purposes only and does not constitute personal financial or tax advice. The Budget's impact will depend on individual circumstances. If you would like to discuss the changes and how they may affect your financial planning, please contact us.
Sources: GOV.UK Autumn Budget 2026 documents; OBR Economic and Fiscal Outlook; Founders' Relief consultation.
