What stayed the same: Corporation Tax rates remain steady
The main Corporation Tax rate remains 25% and the small profits rate remains 19% for the financial year beginning 1 April 2028. These rates are not a new change for the coming year, but their confirmation gives you a clearer basis for longer-term budgeting.
This helps when you forecast profit, set aside funds for tax and plan investment. Check the government’s business tax guidance when preparing your company’s figures, as the rate that applies depends on your circumstances and profits.
Changes that need action: plan your next steps
Review the timing and type of planned investment
For qualifying main-rate plant and machinery expenditure incurred on or after 1 January 2027, the first-year allowance rises to 50%. The main-rate writing-down allowance falls to 12% from 1 April 2027 for Corporation Tax.
This changes how relief is spread across years. It does not mean that every company should bring purchases forward: qualifying expenditure after 1 January may receive a higher first-year allowance than expenditure under the current 40% allowance. In addition, some companies may be able to claim 100% relief through the Annual Investment Allowance or full expensing, subject to the rules and eligibility.
Before committing, check the item, purchase date, accounting period and available reliefs. Equipment and machinery may qualify; software treatment depends on the facts and the relevant rules. Read the government’s capital allowances guidance, and compare the total tax effect rather than focusing on one allowance rate.
Reassess shareholder-director exit plans
The lifetime limit for Business Asset Disposal Relief (BADR) falls from £1 million to £500,000 for qualifying disposals made on or after 6 April 2027.
If you are a shareholder-director considering a sale, the date may affect the tax calculation. But do not rush into a transaction based on the headline limit alone. BADR has qualifying conditions, and special rules may apply to certain contracts and share reorganisations that cross the date. Get the disposal timeline and eligibility checked before making commitments.
Get payroll ready for benefits in kind
Most benefits in kind and taxable expenses will move to mandatory reporting through Real Time Information (RTI) payroll in stages:
- From 6 April 2027: company cars, vans, car or van fuel, and medical benefits.
- From 6 April 2028: most other benefits and taxable expenses.
- Employment-related loans and employer-provided living accommodation are excluded from the second stage under the announced measure.
If your company provides benefits to employees or directors, identify what you provide and how it is currently reported. Review payroll processes, payroll software and benefit records during 2026–27. This gives you time to resolve gaps before the first phase begins. See HMRC’s expenses and benefits guidance.
Prepare for marketplace VAT changes
From October 2027, online marketplaces will be responsible for collecting VAT on sales by UK VAT-registered businesses and other UK businesses with annual sales of at least £90,000 per platform, under the announced rules.
The measure does not apply to personal, non-business sales, second-hand goods or business-to-business transactions. Some implementation details, including the threshold and date, are expected to be set through secondary legislation in 2027.
For sellers using Amazon, eBay, Etsy or other platforms, marketplace VAT collection will not remove the need for accurate records and reconciliation. Keep platform statements, order data, refunds, fees and VAT reports together, and match them to your bookkeeping each month. Review HMRC guidance on VAT and online marketplaces as implementation details are confirmed.
Note the changes with longer lead times
Several other measures are worth recording in your compliance calendar:
- R&D claims: the Claim Notification Form requirement is removed for claims made on or after 1 April 2027. The Additional Information Form is due to be simplified for claims from autumn 2027.
- E-invoicing: legislation will enable HMRC to require VAT invoices in a prescribed electronic format from April 2029. Start checking that your accounting and invoicing systems can adapt.
- VAT and PAYE payments: a Direct Debit arrangement will be required for VAT and PAYE return liabilities from April 2029, subject to exceptions. Other payment methods can still be used before a specified cut-off date.
- National Insurance: for 2027–28, the Class 1 Lower Earnings Limit will be £6,916 a year. The remaining NIC thresholds are frozen at 2026–27 levels until 2030–31.
- Amended Company Tax Returns: online filing becomes mandatory from 1 April 2028.
- Trading Allowance: the individual allowance rises from £1,000 to £3,000 from 6 April 2027. This may be relevant if you have a small trading activity before incorporating, but it does not replace your company’s separate tax obligations.
Budget changes at a glance
| Change | When | What to do |
|---|---|---|
| Main Corporation Tax rate stays at 25%; small profits rate at 19% | Financial year beginning 1 April 2028 | Use the confirmed rates in forward budgets, while checking which rate applies to your profits |
| Main-rate first-year allowance rises to 50%; writing-down allowance falls to 12% | Expenditure from 1 January 2027; reduced writing-down rate from 1 April 2027 for Corporation Tax | Check eligibility, purchase timing and whether AIA or full expensing applies |
| BADR lifetime limit falls to £500,000 | Qualifying disposals from 6 April 2027 | Review exit timelines and relief eligibility before agreeing a sale |
| Payrolling of benefits in kind begins in phases | 6 April 2027 and 6 April 2028 | Audit benefits and prepare payroll processes |
| Marketplace VAT liability extends to qualifying UK businesses | October 2027 | Reconcile platform sales data and follow final implementation rules |
| VAT e-invoicing and VAT/PAYE Direct Debit requirements | April 2029 | Check systems and payment processes well ahead of time |
Worked example: a £20,000 equipment purchase
The Autumn Budget was announced on 28 October 2026. For UK limited companies, its main practical effects concern investment allowances, employee benefits, business exits and VAT on marketplace sales. Here’s what stayed the same, what needs action and how to prepare.
The government’s full Budget 2026 Overview of Tax Legislation and Rates sets out the measures. Some details, including parts of the marketplace rules, still depend on later legislation.