Autumn Budget 2026: The Fine Print Accountants Need to Know

The headlines were for taxpayers. The details are for you.

If you read the newspapers the morning after the Budget, you saw changes to the rate of tax for savings and property income. Those matter, but the announcements that will change a practitioner’s working life sat further down the page.

The overall pattern was a Budget of deferrals. Most of the significant changes arrive between 2027 and 2029, which gives your firm time to plan and your clients time to prepare. Here is what stood out.

The economic backdrop

Growth is forecast at 1.2% and is expected to dip next year before rising towards 1.6%. Inflation sits at around 3%, above the Bank of England’s 2% target, and is forecast to ease to around 2.1% by 2028 and 2029. National debt is just over £3 trillion, and a deficit is still forecast in 2029-30. That is a tight position, which is why many of the measures focus on collecting tax more quickly and effectively.

Making Tax Digital for income tax - MTD IT

The penalty easement that applied to the first cohort now extends to the second cohort in 2027-28. An easement is not an exemption, so your onboarding plans and workflows should stay on track. Use the extra time to get clients into a routine of keeping records throughout the year and fully comply with Making Tax Digital for Income Tax requirements.

Some groups will be exempt, but it matters whether a group is exempt in year one, for this Parliament or for the longer term. The Low Incomes Tax Reform Group at the CIOT has published a paper on this, and it’s worth checking for updates.

One disappointment: nothing was announced to ease the quarter three deadline in the first year, which falls seven days after the 31 January peak.

E-invoicing and digital tax

VAT invoices must be issued in a specified electronic format from 1 April 2029. The full policy and technical details won’t arrive until April 2028, and software developers need time to build and test, so the timetable looks ambitious. Many smaller businesses still invoice from Word or Excel. For them this is a change in workflow as well as a change in software.

A companion consultation looks at how e-invoice data could be used. Ideas include helping categorise purchase invoices and nudging users to avoid common VAT errors when they raise an invoice.

Paying tax

More frequent payments of tax are planned from 2029-30. The government has softened its approach. Clients with both self-assessment and employment income can choose to have payments collected through their PAYE code, rather than being required to. Payment frequency is still under discussion.

Direct debits for VAT and PAYE also arrive from April 2029. Every business will need a direct debit instruction in place. They can still pay by other methods before a cut-off date, and the direct debit will collect anything left unpaid. It works as a backstop for late payers, but it applies to everyone, so clients should think carefully about cash flow.

HMRC powers and compliance

• Direct recovery of debts is set to extend, from around 2030-31. If a client has a debt, a call to arrange time to pay is still the best route.
• New requirements from April 2028 will oblige taxpayers to correct returns and documents where inaccuracies are identified.
• Information powers are being modernised, especially for third-party data.
• Letting agents may be required to share landlord income and expenses with HMRC more regularly.
• From October 2027, online marketplaces will collect VAT on sales by UK businesses that are VAT-registered or selling more than £90,000 on a platform. Personal sales, second-hand goods and business-to-business sales are excluded.

Business and employer changes

• A 50% first year allowance on main rate plant and machinery from January 2027, and a cut in the main rate writing down allowance to 12% from April 2027.
• No extension to the 100% first year allowance for electric vehicles, which ends in March 2027. The AIA appears unchanged.
• A new Founders Relief, with demanding conditions.
• The trading allowance tripled from £1,000 to £3,000, and the proposal for close company reporting has been dropped.
• A 3.9% rise in the National Living Wage from April 2027, and new timings for payrolling benefits in kind.

For individuals

Savings and property income tax rates rise from April 2027. The cash ISA limit stays at £20,000, and a new landlord registration fee is coming for private rented properties.

What to do now

1. Review your client list against the MTD cohorts and the exempt groups.
2. Flag capital expenditure that may benefit from timing changes.
3. Start the cash flow conversation with clients who treat tax as working capital.
4. Keep an eye on the consultations. Your professional body is pushing back where it matters, and it works.

Dext can help with the records side. The sooner clients capture data throughout the year, the easier every one of these changes becomes.