The short version

  • No change for 2026/27. Income tax rates, Class 4 National Insurance (6% and 2%) and the £12,570 personal allowance stay the same. The bands remain frozen until April 2031.
  • Trading allowance triples from £1,000 to £3,000 from 6 April 2027.
  • Mileage: the 55p rate for the first 10,000 business miles is here to stay, and the rate after 10,000 miles rises from 25p to 35p from 6 April 2027.
  • Landlords pay more: rental profit will be taxed at 24%, 44% and 49% from 6 April 2027.
  • Making Tax Digital carries on as planned: income over £30,000 from April 2027 and over £20,000 from April 2028.

The trading allowance rises to £3,000

The trading allowance lets you earn a small amount from self-employment or side work tax-free, or deduct a flat amount instead of your real costs. From 6 April 2027 it goes up from £1,000 to £3,000. The government says people whose trading income is fully covered by the allowance will not need to declare it.

For the current 2026/27 tax year the limit is still £1,000. If your sales or side income go over £1,000 before 5 April 2027, you still need to register for Self Assessment by 5 October 2027. There is no matching rise for the £1,000 property allowance.

See trading allowance vs expenses to check which option gives you less tax.

Mileage: 55p stays, 35p after 10,000 miles

HMRC raised the approved mileage rate for cars and vans from 45p to 55p a mile for the first 10,000 business miles in May 2026, backdated to 6 April 2026. The Budget confirmed it is permanent. So for 2026/27, use 55p for your first 10,000 miles and 25p after that.

From 6 April 2027 the rate for every business mile over 10,000 rises from 25p to 35p. That helps drivers, couriers, cleaners, carers and tradespeople who cover a lot of miles. Motorcycles (24p) and bicycles (20p) are unchanged.

Work out your 2026/27 claim with the mileage claim calculator.

Landlords: higher tax on rental profit

From 6 April 2027 rental profit gets its own tax rates. The November 2025 Budget set them at 22%, 42% and 47%; this Budget adds two more points, so they will be 24% basic, 44% higher and 49% additional in England and Northern Ireland. The tax credit for mortgage interest rises to 24% to match. Scotland and Wales can set their own property rates.

For 2026/27, rent is still taxed at the normal 20%, 40% and 45% with a 20% mortgage interest credit. Compare the two years with the landlord tax calculator.

Other changes to know about

  • Parental pay for self-employed parents: from April 2029, eligible self-employed fathers, partners and adopters will be able to get two weeks of parental pay.
  • Paying your tax bill: the government confirmed it will change when Self Assessment tax is paid, starting from 2029. Details will follow. Nothing changes for the 31 January 2027 and 31 January 2028 payments.
  • Savings interest outside an ISA will be taxed at 24%, 44% and 49% from April 2027. The cash ISA limit stays at £20,000.

What to do now

  1. If you drive for work, check your 2026/27 mileage claim uses 55p, not 45p.
  2. If you have a small side income, keep records as normal: the £3,000 allowance only starts on 6 April 2027.
  3. If you are a landlord, check how much the 2027/28 rates add to your bill and plan for it.
  4. Keep putting money aside for your tax bill. Our free tax set-aside calculator works out how much.

Sources: the Budget 2026 document and policy costings, the Budget 2026 overview of tax legislation and rates (Annex A), and GOV.UK guidance on simplified expenses for vehicles. This page explains the announcements in plain English and is not tax advice.