The Autumn Budget 2026, What will it mean to you?

‘A budget for the working people of Britain, budget for the worker, the sole trader, the parent at the school gate.’ the Chancellor John Healey states, ‘to chart a new course for Britain in the years ahead.’

The OBR gives a mixed outlook on the strength of the UK's economy. It expects GDP to expand by 1.2% this year, better than its outlook in March, but next year it forecasts a 1%drop from earlier expectations of 1.6% growth.

Main announcement summary:

• 20 million households in council tax bands A-D in England will receive a £100 ‘household energy payment’ this winter
• Funding will be allocated to devolved governments in Scotland, Wales and Northern Ireland to do the same
• The VAT cut on electricity will be extended through the winter and spring in an attempt to tackle rising bills
• Banks will pay an extra 3% on the banks surcharge which will be ‘time limited’
• A smaller rise in minimum wage for young workers confirmed, those aged 18 to 20 will see it rise by 3.9%
• There will be a ‘fiscal devolution’ with business rates retained locally by the end of the decade and mayors getting a share of income tax from 2028

The detail:

Growth and inflation forecasts

• The government will have £15bn of headroom in 2029-30 and £20bn in 2030-31 according to the Office for Budget Responsibility, (OBR) the government’s forecaster.
• Government borrowing will be 4.2% of GDP this year, 3.4% next year, then 2.9%, 2.1% and 1.8% by 2030-31, the OBR says.
• Predictions of slowing growth were wrong. The OBR says GDP will grow by 1.2% this year, 1% next year, 1.6% in 2028, 1.8% in 2029, 1.7% in 2030 and 1.6% in 2031. In March this year the OBR had predicted GDP growth of 1.1% in 2026, rising to 1.6% in 2027 and 2028 and dropping to 1.5% in 2029 and 2030.
• Government debt is forecast to be 83.2% of GDP this year, 83.8% next year then falling to 83.1%, 82.3% and 81.7% in the following years.

Energy costs

• A series of measures announced to cut bills, including scrapping a levy on bills to fund hydrogen technologies and moving older renewables onto fixed price contracts.
• The government will extend a VAT cut through the winter and spring to July next year, taking £50 off the annual price cap.
• Abolition of standing charges on gas bills for 23m homes.
• Twenty million households in council tax bands A to D will receive a £100 energy payment paid directly into bank accounts, costing £2.6 billion.

Cost of living measures

• Fuel duty will be frozen for the 16th year in a row.
• Increase in the higher mileage rate for people who use their cars for work from £0.25 to £0.30 a mile.
• The Chancellor will remove import tariffs on more than 100 products, including baked beans, chocolate and gherkins to reduce their shop prices as trailed before the budget.
• Self employed fathers will be eligible for paid paternity leave for the first time.

The high street

• Healey says he will increase the threshold for small business rate relief from £12,000 to £18,000 giving a tax break to 70,000 smaller firms.
• On gambling, machine game duty will rise from 20% to 25% for higher stakes machines.
• Adult gaming centres and vape shops will not qualify for business rates relief.
• Online marketplace sellers will be targeted to ensure they are unable get around VAT laws.

Business taxes

• There will be new funding from HMRC to improve compliance and stronger powers to collect overdue tax from those who ‘can clearly afford to pay but ignore repeated contact’.
• There will be no change to tax on income from dividends and no change on tax to income from employment.
• Healey confirms he will reverse his predecessor’s decision to cut the tax free allowance on cash individual savings accounts (ISAs) from £20,000 to £12,000 a year from April.
• Banks will pay an extra 3% on the bank surcharge for 15 months from January 2027.

Business growth and AI

• The government will support Rolls Royce to develop the next generation of engines for single aisle passenger jets in the UK.
• £20.4b for the state controlled national wealth fund and the British Business Bank to try to investment in growing companies.
• He will reestablish the better regulation executive to ‘cut outdated regulations and admin burdens on business and on workers’.
• The government will spend another £500m on AI safety and security.
• A new ‘British datacentre covenant’ will force centres to invest in the local area and ensure local water supplies are protected while getting faster grid connections and the ability to generate their own electricity.
• A series of measures for entrepreneurs including raising the amount people can earn from a new venture tax free from £1,000 to £3,000 and new young entrepreneurs’ allowance, which will cover a year of living costs for young founders.
• A new ‘founders’ relief’ - a 10% rate on lifetime gains up to £10m for the founders of businesses.

Devolution and investments across the UK

• A series of smaller investments around the country. There will be £10m for a new market hall in Stafford, £10m for Bristol’s Temple Quarter and £3m to help Plymouth’s young people get jobs in defence, plus £50m to upgrade the Leeds College of Building.
• By the end of the decade 100% of business rates revenues will be retained locally. From next year 20% of business rates revenues will go to mayors and from 2028, an unspecified share of income tax receipts will go to mayors as well.
• Mayors will be able to introduce overnight visitor levies to fund their local areas, Healey says.

Defence and government spending

• Fully funding the defence investment plan including capital prioritisation across Whitehall with cuts to other department investment plans.
• The government will spend on AI for the civil service to save a further £600m from back office costs.
• Launch of a review of NHS productivity.
• The government will apportion £100m for a local apprenticeship service to match young people with local firms. This will be funded from savings in welfare, fraud and error.
• Target of defence spending reaching 3% of GDP by 2030 on the way to 3.5% by 2035.
• The national wealth fund and British Business Bank will have a new focus on defence, investing as much as £5b over the next four years.

Housing

• The government will spend £430m to give rough sleepers a place to sleep for the rest of the parliament.
• No major changes to building regulations for the rest of the parliament except for safety. Biodiversity requirements will be removed from brownfield sites.
• Councils will get cheaper borrowing for housing and land sold to social housing providers will not attract VAT.
• A new first time buyer ISA to replace the Lifetime ISA and the government will allow the withdrawal of Lifetime ISA money without penalties.
• The chancellor says a new equity loan scheme, ‘Your First Home’ will lend £4.7b.

Welfare

• The government will bring down the welfare bill ‘in a Labour way’, with a white paper due before the end of next year after reviews of youth employment from Alan Milburn and disability from Stephen Timms.
• Previously announced changes to the pension triple lock will save £15b a year by the end of the 2030s, he says.

Watch out for our analysis email and PDF download that will be available in the coming days. If you have any questions or queries about what this budget might mean for you or your business do get in touch with your Swindells partner who will be able to advise you further.