Your tax-free mini experiment fund has just tripled.
Maybe you’re already trading or about to start. Either way, the Budget on 28 October 2026 has something for you. For small businesses and side hustles, it contains more good news than bad, and most of it starts in April 2027, so you have time to plan.
You don’t need to read the whole Budget document. We did it for you. We’ve collected what’s changed and what it means for you as a business and as a person.
A quick disclaimer before we jump in: we’re not accountants or financial advisers, and tax rules change.
These are announced plans. Much of it still has to pass through the Finance Bill 2026-27. We checked against GOV.UK. Use this as your starting point, then check the details with HMRC or a professional before you act.
The Headlines
– The Trading Allowance triples from £1,000 to £3,000 on 6 April 2027.
– Mileage: 55p a mile stays for your first 10,000 miles, and the rate above that rises from 25p to 35p.
– High street businesses in England get more business rates relief from April 2027.
– No rises to the headline rates of Income Tax, National Insurance or VAT.
What did not change
(and why that’s good news)
The headline rates of Income Tax, National Insurance and VAT are staying where they are.
The VAT registration threshold is staying at £90,000.
The Corporation Tax main rate is staying capped at 25%.
So where is the money coming from?
Mostly from tax on savings and rental income, banks, and more HMRC enforcement.
For most people starting out, none of that impacts your business.
The good news for your business
From 6 April 2027, you can earn up to £3,000 a year from trading or miscellaneous income without paying Income Tax on it, up from £1,000. The Self Assessment reporting threshold rises to £3,000 at the same time. Until 5 April 2027, the £1,000 limit still applies.
This is your mini experiment fund: a small, low-cost test of one idea with real customers, and it just got three times bigger.
HMRC estimates that up to 1.4 million people could benefit, with about 400,000 paying £380 less tax on average and about 100,000 no longer needing to report their trading income.
What it means for you is that testing an idea is cheaper and less scary.
Remember the allowance counts your sales before expenses, not your profit. If you use it, you can’t also deduct expenses against that income, and it doesn’t cover income from a company you control or from a partnership.
Rebel’s Tip: Keep tracking everything you take in, even if you expect to stay under £3,000. Your records are what prove it.
Mileage rates are now permanent
The 55p a mile rate for the first 10,000 business miles in a car or van is now permanent. From 6 April 2027, the rate for miles above 10,000 rises from 25p to 35p. As an example, on 6,000 business miles, 55p instead of the old 45p gives you £600 more relief, worth about £120 a year at the basic rate.
What it means for you is if you drive to clients, markets or jobs, a mileage log is the easiest tax saving there is.
Log the date, journey, reason and miles. Sole traders using simplified expenses can check the latest rates on HMRC’s vehicles page.
Business rates relief for shops, cafes and venues (in England)
From April 2027, retail, hospitality and leisure properties with a rateable value up to £18,000 get 100% relief (up from £12,000). Tapered relief runs up to £21,000 (up from £15,000). This means around 70,000 more businesses will pay no business rates.
Bills for other retail, hospitality and leisure properties are limited for two years. Pubs, social clubs and most live music venues get a bigger discount, with relief rising to 35%.
Help you may have missed
Some support was announced before the Budget and is still on the table:
– Youth Jobs Grant: £3,000 for each 18 to 24-year-old you hire who has been on Universal Credit and looking for work for six months (announced in March 2026).
– Apprentices: Up to £2,000 for employers who don’t pay the apprenticeship levy and take on 16 to 24-year-old apprentices as new employees.
– Young Entrepreneurs Allowance: A pilot in England to help with living costs in young people’s first year of business.
A heads-up: costs and admin to plan for
Selling on online marketplaces
If you’re not VAT-registered, overseas suppliers will have to charge you UK VAT (20%) on services from April 2027, because the reverse charge will apply only to VAT-registered businesses. Some subscriptions could cost up to a fifth more.
What it means for you is to keep an eye on your outgoing costs. List your subscriptions (design tools, scheduling apps, AI tools, hosting), check which will add VAT, and cancel what you don’t use. It’s a good moment for a subscription clear-out.
From October 2027, online marketplaces will collect VAT on sales by UK VAT-registered sellers, and by unregistered UK sellers with sales of more than £90,000 a year through that platform. Personal sales and second-hand goods aren’t affected. The per-platform threshold and the exact start date will be confirmed in 2027.
If you sell on a marketplace like eBay or Vinted, keep an eye on information that the platform releases in the coming months.
Selling or closing a limited company costs more
The lifetime limit for Business Asset Disposal Relief halves from £1 million to £500,000. If you own a company you might sell one day, ask your accountant how the lower limit affects you. If you’re early in your journey, bookmark this and move on.
Wages and payroll
If you pay wages and payroll, some costs could be rising.
– National Living Wage (21 and over) £13.21 (up 3.9% from £12.71)
– 18 to 20-year-olds £11.27
– 16 to 17-year-olds and apprentices £8.31
Also, mandatory payrolling of benefits in kind, such as company cars and medical cover, starts to be phased in from 6 April 2027. If you employ anyone, or plan to, build the new rates into your pricing now and ask your payroll provider about benefits.
Tax is moving closer to when you earn it
From April 2029, people who make payments on account will pay smaller, more regular, automated amounts through the year, with the option to pay through PAYE, instead of two big lump sums. It’s easier to plan around, but it changes your cash flow. If you already put 20% of what you earn into a separate tax pot, you’re ahead of the game.
If you join Making Tax Digital for Income Tax in April 2027 (qualifying income over £30,000), HMRC won’t give penalty points for late quarterly updates in 2027/28. The roll-out for some other groups has been deferred.
HMRC is getting stronger tools with 670 more compliance officers, on top of 5,500 already planned by 2029/30. From 1 April 2028, a duty to correct errors in tax returns once you spot them, and HMRC customer correction notices. From 1 April 2029, VAT e-invoicing, plus a mandatory Direct Debit for VAT and PAYE liabilities.
Most Rebels run a business alongside real life, so here’s what the Budget means at home too.
Savings and rental income
From 6 April 2027, tax on savings income is 24%, 44% and 49% (basic, higher and additional rate). Property income uses the same rates in England, Wales and Northern Ireland. That’s two points above the rates announced last year, and four above today’s 20%, 40% and 45%.
Dividend tax rates are unchanged, and the cash ISA limit stays at £20,000.
Energy and fuel
For energy and fuel, there’s 0% VAT on domestic electricity until July 2027. About 20 million households in council tax bands A to D in England get a one-off £100 Household Energy Payment from January 2027.
The government has asked Ofgem to remove gas standing charges by the end of 2027 or soon after, and the 5p fuel duty cut is extended to 30 June 2027. If you drive for work, that helps your running costs, and your mileage claim helps too.
Becoming a dad
From April 2029, self-employed fathers, partners and adopters can get statutory parental pay for the first time. It’s a long way off, but it matters if self-employment has made starting a family feel risky.
The Office for Budget Responsibility expects growth of 1.2% in 2026 and 1.0% in 2027. It expects inflation to average around 3.4% next year, peaking at about 3.75% in early 2027, before falling to 2% from 2028.
To translate that, prices will stay high for a while. That’s a good reason to price your product or service properly, keep a cash buffer, and build a little income of your own.
Our thoughts on the budget
This budget allows you to run a mini-experiment or build a business boldly. With £3,000 tax-free from April 2027, it costs less to try something. Don’t wait for perfect. The rates are stable, and the rules are clear enough to start. Make sure you keep good records, as almost every change here rewards tidy records. Plus, it’s a good habit to build…
Ask for help early. Ask in the Rebel Support Group, check GOV.UK, or speak to an accountant.
Budgets are announcements, not finished rules. Much of this still has to pass through the Finance Bill 2026-27, and the detail will arrive in HMRC guidance over the coming months. Dates and amounts can shift, and a few of the measures above were announced before the Budget and are now confirmed.
If you have questions about your own tax, the Rebel+ Tax AI, built with Anna Money, is a good first stop.
And if you want to read the budget in detail, you can find it here, or you can say “Andy Burnham” three times, and he’ll appear to read it to you.
