Budget 2026: Our reaction, highlights and full analysis

Personal tax

Ammad Khan, Senior Tax Manager

“From a personal tax perspective, this was a relatively mild Budget, with no major changes to headline Income Tax, National Insurance or Capital Gains Tax rates.”

“The decision to retain the £20,000 annual ISA allowance is welcome, preserving flexibility for savers and avoiding the planned reduction in the Cash ISA limit.”

“There was also positive news for pensioners. From April 2027, a new Pension Tax Allowance will ensure that individuals whose total income does not exceed the full new State Pension of £13,036 will not pay Income Tax. This will provide reassurance for pensioners who rely solely on their State Pension, although those with additional sources of income will still need to consider their wider tax position.”

“The picture is less favourable for landlords and those with significant savings income. From 6 April 2027, the rates of Income Tax applying to property income and savings income will increase by two percentage points across all bands, taking the basic rate to 24%, the higher rate to 44% and the additional rate to 49%. These increases will put further pressure on net investment returns and may influence decisions around saving, investing and property ownership.”

For scale-ups and growing SMEs

Adam Brodie, Partner

“For founders, it was a far bigger Budget than expected, with the most impactful measures found in the fine print, not in the speech.”

“The headline is a new Founders’ Relief: 10% capital gains tax on up to £10m of lifetime gains for the founders of high-growth companies – this is basically a stricter version of the old Entrepreneurs’ Relief – with the eligibility criteria still under consultation.”

“There’s also a bigger share option offer for scale-ups and simpler EIS and R&D rules. The catch: BADR’s lifetime limit halves to £500,000, and the hoped-for cut in employer National Insurance didn’t come.”

For businesses and groups

Jamie Odah, Corporate Tax Manager

“For larger businesses and corporate groups, international tax changes will require attention. From 1 January 2027, the foreign permanent establishment exemption will become mandatory, meaning overseas branch losses can no longer be used to reduce UK Corporation Tax liabilities.”

“The Government will also reform the taxation of company distributions from April 2028, with draft legislation expected for consultation in 2027. These measures will be particularly relevant to groups with overseas operations and complex corporate structures, making it important to review existing tax arrangements and assess the potential impact on group tax liabilities.”