The Autumn Budget brings changes for individuals, employers and businesses across personal and business taxation, employment costs, investment and growth. While the measures will take effect over the coming months and years, they raise a number of considerations for businesses, employers and individuals when reviewing their existing arrangements and future plans.

Below, we highlight some of the key announcements and what they could mean in practice.

 

Savings and property income

For individuals getting their income via savings interest or property, the separate savings income and property income tax rates increase to 24%, 44% and 49% from 6 April 2027. These changes mean that individuals receiving taxable bank interest, rental profits or other savings or property income may face a higher income tax charge from 2027/28. The increases do not, however, alter the tax-free status of interest and investment returns arising within an ISA.

The Government has also reversed the previously announced restriction on cash ISA subscriptions. The proposal would have limited people under 65 to cash ISA subscriptions of £12,000 within the overall £20,000 annual ISA allowance from April 2027. Instead, the cash ISA limit will remain £20,000 for all savers aged 18 and over. The Government intends to explore a new incentive for first-time investors in stocks and shares ISAs.

The combination of higher tax rates on savings income and retention of the full cash ISA allowance may make ISA planning more important, particularly for individuals with substantial cash deposits or interest income exceeding any available tax-free allowance.

 

Pension death benefits and trust liabilities

The Government will remove the two-year rule under which an otherwise tax-free pension or lump-sum death benefit could become taxable because it was paid more than two years after the pension scheme administrator became aware of the member’s death. The change applies to payments made on or after 28 October 2026. Other conditions governing the taxation of pension death benefits will continue to apply.

A new process will also apply where a member dies before age 75 and a lump-sum death benefit exceeds the available lump sum and death benefit allowance. Rather than treating the excess as pension income, HMRC will assess each beneficiary on their share of the excess by reference to their marginal income tax rate.

In addition, ahead of unused pension funds being brought within the scope of Inheritance Tax from 6 April 2027 (a change originally announced in 2024), a deceased person’s personal representatives will be able to direct pension scheme administrators to pay the tax due on a pension fund directly to HMRC. This welcome update should help address the difficulty of personal representatives being responsible for settling the tax within six months of death, without having access to the pension funds to pay it.

Separately, the inheritance tax rules for liabilities relating to settled property will be amended. Liabilities properly incurred by trustees will be recognised on a statutory basis, while existing restrictions and anti-avoidance rules will be extended to prevent certain liabilities funded from value originating in a beneficiary’s estate from reducing an inheritance tax charge. The changes apply to deaths and other chargeable events occurring on or after 28 October 2026.

 

Business, investment and growth

While the main rates of Capital Gains Tax remain unchanged, the Budget introduces changes to the reliefs available on certain business disposals. From 6 April 2027, the lifetime limit for Business Asset Disposal Relief will reduce from £1 million to £500,000, potentially increasing the Capital Gains Tax payable by business owners on qualifying disposals.

A new Founders’ Relief will provide a 10% Capital Gains Tax rate on up to £10 million of qualifying lifetime gains for eligible founders and significant early investors in high-growth, innovative UK companies from 6 April 2027, subject to the final design following consultation and legislation.

From April 2027, the individual option limit under the Company Share Option Plan, which will be renamed EMI2, will double from £60,000 to £120,000, expanding the scope for qualifying companies to offer tax-advantaged share options to employees.

 

Increased employment costs

Employers will see statutory wage costs increase from April 2027 following confirmed increases to the National Living Wage and National Minimum Wage. The National Living Wage will increase by 3.9% to £13.21 per hour, while the National Minimum Wage for 18 to 20-year-olds will rise by 3.9% to £11.27 per hour.

In addition to the direct increase in wage costs, employers may need to review wider pay structures where the new rates affect existing differentials between roles and grades.

From April 2029, parental pay will be extended to eligible self-employed fathers, partners and adopters in Great Britain for the first time. The changes will also benefit certain parents with recent or irregular employment histories who do not currently qualify for statutory paternity or adoption pay. This measure applies to Great Britain and does not currently extend to Northern Ireland.

The Government will permanently increase tax-free mileage rates for employees and self-employed people who use their own vehicles for business travel.

 

Energy costs and investment

The territorial scope of the energy measures differs. Some apply in GB only, while the Budget confirms funding for a comparable manufacturing support scheme in NI and a UK-wide remit for the Energy Wealth Fund. NI businesses should distinguish these commitments from confirmed eligibility for individual projects.

A 20% to 25% electricity discount for eligible energy-intensive manufacturing businesses in GB under the British Industrial Competitiveness Scheme will apply from April 2027. The NI Executive is being funded to deliver a comparable scheme. Details of NI eligibility, discounts and commencement remain TBC, but this is an area we are keeping under review and have been engaging with the Department for the Economy (DFE) on.

There will be a consultation on Wholesale Contracts for Difference for certain existing low-carbon generators in GB. This does not apply in NI, where renewable support will be via the proposed Renewable Electricity Support Scheme.

A new Cost Control Framework will be introduced at the 2027 spending review to set budgets for components of energy costs, including policy costs. Pending its introduction, no further policy costs will be placed on bills unless they reduce bills or are essential for security of supply. The Budget does not expressly confirm how the framework will apply to NI.

£2 billion will be provided for an Energy Wealth Fund within the National Wealth Fund, to invest in renewable and low-carbon energy infrastructure across the UK, including NI. NI projects are within the geographic remit of the fund.

Up to £300 million may be available for strategically important hydrogen projects, subject to value for money and affordability, in the context of potential government loan or equity investments. The Budget does not expressly confirm NI eligibility.

 

Defence and strategic investment

A new Innovative Defence Financing Taskforce will be established to maximise private and international finance for UK defence and advance procurement reforms supporting innovative financing.

Up to £5 billion over four years will be provided through the National Wealth Fund and British Business Bank for defence, dual-use and other sectors supporting national security, sovereign capability and resilience. Both bodies operate across the UK, including NI.

A pipeline of private-finance opportunities in defence will be developed, including public-private partnerships where they offer value for money.

£7.5 million of new R&D investment will be provided for Queen’s University Belfast’s Centre for Secure Information Technologies (CSIT) Cyber AI Hub.

£1 million of new funding will be provided for a NI Investment Summit.

 

Looking ahead

With a number of the changes announced in the Autumn Budget taking effect over the coming months and years, individuals, business owners and employers should consider what the measures mean for their existing arrangements and future plans.

 

For legal guidance and advice regarding any of the measures outlined above, please contact our Private Wealth, Corporate, Employment, Real Estate, Technology or Energy teams.

While great care has been taken in the preparation of the content of this article, it does not purport to be a comprehensive statement of the relevant law and full professional advice should be taken before any action is taken in reliance on any item covered.