Autumn Budget 2026: Limited Company - What Does It Mean?

How much noise is there around the budget everywhere!! Don't worry - we've got you covered. You don't need to understand every announcement. Just find the bits that apply to you.

Limited Company business owners: The important changes

1. Minimum Wage increases

From April 2027

If you employ staff, you'll need to factor the new minimum wage rates into your payroll costs.

Age	Current hourly rate	New hourly rate
21 and over	£12.71	£13.21
18–20	£10.85	£11.27

Both represent an increase of approximately 3.9%.

If you employ someone for 35 hours per week on the National Living Wage, the 50p increase adds approximately £910 to their annual gross pay before additional employer costs.

2. Support for high street businesses

   There is additional support for qualifying retail, hospitality and leisure businesses in England.

   From April 2027:

   • The rateable value threshold for 100% Small Business Rates Relief increases from £12,000 to £18,000 for qualifying businesses.

   • The upper threshold for tapered relief increases to £21,000.

   • Business rates bills for qualifying retail, hospitality and leisure premises not receiving Small Business Rates Relief will be frozen until April 2029.

   This could be particularly relevant if you operate from a shop, café, salon or other qualifying premises.

3. Direct Debit instructions for VAT and PAYE

   
   

   From April 2029

   Businesses will be required to have a Direct Debit instruction in place for VAT and PAYE liabilities.

   This doesn't necessarily mean you'll have to pay every bill by Direct Debit.

   You can still use another payment method before the deadline, but HMRC will be able to collect outstanding balances using the Direct Debit instruction.

4. Changes to claiming tax relief on business equipment & Disposals

   
   

   The government has announced changes to capital allowances, which are the rules businesses use to claim tax relief on qualifying purchases.

   • The relevant first-year allowance increases from 40% to 50% for qualifying expenditure from 1 January 2027.

   • The main pool writing down allowance reduces from 14% to 12% from April 2027.

   Not every business purchase is affected, and other allowances may still provide more generous relief.

   If you're planning significant equipment purchases, it's worth checking the timing and available relief before spending.

   
   

   The lifetime limit for gains qualifying for Business Asset Disposal Relief (BADR) will reduce from £1 million to £500,000.

   This relief can reduce the Capital Gains Tax payable when eligible business owners sell or dispose of their business.

   A separate new Founders' Relief will offer qualifying founders of certain innovative, high-growth companies a 10% Capital Gains Tax rate on up to £10 million of lifetime gains.

   For most small limited company directors, the important point is to seek advice before selling or closing a business.

What do you actually need to do now?

Nothing - We've got you!

Some of these changes are positive, some will increase costs, and others won't affect your business at all.

The important thing is understanding which changes matter to you and having a bookkeeping system that makes staying on top of your finances feel manageable.

At LMO Bookkeeping Limited, we help small limited companies and self-employed businesses make sense of their financial admin, stay organised and keep on top of their obligations.

Bookkeeping doesn't need to be overwhelming, and you don't need to do everything at once.