Budget 2026 for company directors: what changes in April 2027
By Oakridge Accounting · Updated 5 min readFigures for 2027/28
Announced in the Budget on 28 October 2026. Most of these measures still have to pass in the Finance Bill, so details could change. We'll update this guide when they do.
The short answer
- There are no increases to the headline rates of income tax, National Insurance or VAT, and corporation tax stays capped at 25%.
- The Budget announces no change to dividend tax rates.
- On equipment, the main-rate first-year allowance rises from 40% to 50% for spending from 1 January 2027, and the main-rate writing-down allowance falls by two points to 12% from April 2027. Full expensing continues.
- The National Living Wage rises by 3.9% to £13.21 an hour on 1 April 2027.
- Savings interest in your own name is taxed at 24%, 44% and 49% from 6 April 2027.
What was announced
| When | What changes | Status |
|---|---|---|
| 1 January 2027 | Main-rate first-year allowance rises from 40% to 50% | Announced |
| 1 April 2027 | National Living Wage £13.21 an hour; National Minimum Wage £11.27 for 18 to 20, £8.31 for under 18s and apprentices | Announced |
| 1 April 2027 | Main-rate writing-down allowance falls by two points to 12% for companies (6 April for individuals) | Announced |
| 1 April 2027 | R&D tax relief: the Claim Notification Form is removed | Announced |
| 6 April 2027 | Tax on savings income: 24% basic, 44% higher, 49% additional | Announced |
| 6 April 2027 | Van benefit charge and car and van fuel benefit charges rise in line with CPI | Announced |
| 6 April 2027 | Business Asset Disposal Relief: lifetime limit falls from £1 million to £500,000 | Announced |
Salary and dividends
The Budget doesn't change dividend tax rates, and it keeps the rates of tax on earnings unchanged. The 2026/27 figures in our salary and dividends guide are therefore the starting point for 2027/28. We'll check the 2027/28 thresholds and publish an updated guide in April.
Capital allowances
The Budget keeps full expensing and raises the main-rate first-year allowance from 40% to 50% for spending from 1 January 2027. At the same time the main-rate writing-down allowance falls by two percentage points to 12%, from 1 April 2027 for corporation tax and 6 April 2027 for income tax.
What this means for a purchase depends on the asset and how it's bought, so ask us before a significant purchase around the year end.
Payroll
On 1 April 2027 the National Living Wage rises by 3.9% to £13.21 an hour. The National Minimum Wage rises by 3.9% to £11.27 for 18 to 20-year-olds and to £8.31 for 16 and 17-year-olds and eligible apprentices. If you employ staff, check your pay rates before April.
The van benefit charge and the car and van fuel benefit charges also rise in line with CPI from 6 April 2027, which matters if you give employees or directors a company van or fuel.
Savings interest in your own name
Tax on savings income rises by 2 percentage points from 6 April 2027, on top of the 2-point rise already announced last year, taking the rates to 24% (basic), 44% (higher) and 49% (additional). This affects interest you earn personally, not interest earned inside your company.
What to do before April
- If you're planning equipment purchases, talk to us before they're made, since the rates change on 1 January and again in April.
- If you employ staff, check pay rates against the new National Living Wage and National Minimum Wage figures.
- If you're thinking of selling shares in your company, speak to us before 6 April 2027.
- Watch for our updated salary and dividends guide in April.
Questions people ask
Do dividend tax rates change in April 2027?
The Budget announces no change to dividend tax rates. We'll check the 2027/28 thresholds and publish an updated salary and dividends guide in April.
Is full expensing ending?
No. The Budget keeps full expensing, and the main rate of corporation tax stays capped at 25%.
When do these changes become law?
Most are due to be written into law in Finance Bill 2026-27, which normally passes in the spring. Until then they're announced rather than confirmed, and we'll update this guide if the details change.
This guide is general information, not advice for your situation. Tax rules change and the right answer depends on your circumstances, so speak to us (or another qualified adviser) before acting on it.