Autumn Budget 2026: Self-Employed - 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.
Self-employed business owners: The important changes
The tax-free trading allowance is increasing to £3,000
When? 6 April 2027
The trading allowance is increasing from £1,000 to £3,000.
In simple terms:
If your annual self-employment income is no more than £3,000, you generally won't need to declare it to HMRC or pay tax on those earnings.
If your income is above £3,000, you can choose to deduct the £3,000 allowance OR your actual allowable business expenses when calculating your taxable profit.
You cannot claim both.
Why does this matter?
For someone with a small side business and relatively few expenses, this could mean less tax and potentially less paperwork.
Remember, this relates to your sales figure (turnover), not just the profit you make. Other reporting obligations or circumstances may still apply.
Business mileage rates are being kept at the increased rate
Business mileage | Allowance |
First 10,000 miles | 55p per mile |
Above 10,000 miles, currently | 25p per mile |
Above 10,000 miles, from April 2027 | 35p per mile |
The 55p rate introduced in April 2026 has also been made permanent.
Remember that ordinary commuting doesn't normally count as business mileage, and you can't combine simplified mileage claims with actual vehicle running costs for the same vehicle.
Income Tax thresholds are staying frozen
This is something Martin Lewis has been particularly vocal about.
The Personal Allowance remains at £12,570 and is set to stay frozen until at least April 2031.
Why does this matter?
Essentially, your earnings increase but the tax thresholds don't move with them - so you'll be paying more tax!
For self-employed business owners, it's another reason to review how much you're putting aside for tax rather than assuming last year's percentage will always be enough.
Changes to how you pay your Self Assessment tax bill
When? Planned for April 2029 - ages away and not worth worrying about!!!
This could be a welcome change for anyone who struggles with the dreaded January tax bill.
The government plans to replace the current Payments on Account system, where taxpayers generally make two large payments in January and July.
Instead, taxpayers will make smaller, more regular contributions throughout the year.
The finer details are still subject to consultation.
Why does this matter?
More regular payments could make budgeting easier and reduce the shock of receiving a large tax bill.
Particularly useful if your income varies from month to month.
In short: right now nothing big is changing right now for Self-Employed business owners.
MTD is still a thing that's started and will hit a lot of businesses in April.
The simplified expenses allowance will increase in April.
Tax still needs saving for.
Bookkeeping doesn't need to be overwhelming, and you don't need to do everything at once.
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