The short version
- The trading allowance and the Self Assessment reporting threshold go from £1,000 to £3,000 from 6 April 2027.
- Tax on savings and property income goes up to 24%, 44% and 49% from 6 April 2027. Wages and self-employed profit keep the 20%, 40% and 45% rates.
- Mileage from April 2027 is 55p for the first 10,000 miles and 35p above, up from 25p.
- Fuel duty rises from 52.95p to 60.59p a litre on 1 July 2027. Van road tax goes from £360 to £375.
- Nothing here is law yet. Everything is announced and subject to the Finance Bill, so figures can change.
What changed for the self-employed?
This guide puts the Budget changes that matter to sole traders, CIS subcontractors and small landlords in one place. We checked each against the Budget 2026 overview of tax legislation and rates and Annex A on GOV.UK on 28 October 2026. The 2027/28 figures are announced, not law yet, so we say that wherever they appear.
| Change | Now (2026/27) | Announced for 2027/28 | Starts |
|---|---|---|---|
| Trading allowance and reporting threshold | £1,000 | £3,000 | 6 April 2027 |
| Tax on savings interest | 20% / 40% / 45% | 24% / 44% / 49% | 6 April 2027 |
| Tax on property income | 20% / 40% / 45% | 24% / 44% / 49% (England, Wales, NI) | 6 April 2027 |
| Mileage rate over 10,000 miles | 25p | 35p (55p stays for the first 10,000) | 6 April 2027 |
| Fuel duty, petrol and diesel | 52.95p a litre | 60.59p a litre | 1 July 2027 |
| Van road tax (VED) | £360 | £375 | 2027/28 |
| National Living Wage, 21 and over | £12.71 | £13.21 | 1 April 2027 |
| Voluntary Class 2 NI | £3.65 a week | £3.80 a week | 6 April 2027 |
The £3,000 trading allowance
The trading allowance lets you ignore a slice of self-employed income instead of working out your costs. It goes from £1,000 to £3,000, and the point at which you have to report trading income on a Self Assessment return is announced to rise to £3,000 as well. If your sales are under the line you may have nothing to pay or declare. If they are over, you choose between the allowance and your real expenses.
Compare the allowance with your actual expenses and see both tax years.
Our explainer, the £3,000 trading allowance, has worked examples.
Higher tax on savings and rental income
From 6 April 2027, savings interest and property income are taxed at 24%, 44% and 49% instead of 20%, 40% and 45%. The allowances, including the £1,000 Personal Savings Allowance for basic-rate taxpayers and the £1,000 property allowance, are not announced to change. Scotland and Wales have been given powers to set their own property rates, so the new rates are stated for England, Wales and Northern Ireland only.
If you are self-employed and also have a rental or interest, these are the changes that add tax. A basic-rate taxpayer with £9,000 of rental profit pays about £360 more.
See what 4 extra points on savings and rental profit means for you.
More detail is in savings and rental income tax from April 2027.
Mileage and vehicle costs
The simplified mileage rate for a car or van is announced as 55p for the first 10,000 miles, as now, and 35p above that, up from 25p, from 6 April 2027. For motorcycles the rate is 24p. The main-rate writing-down allowance for vehicles and equipment bought under the actual-cost route goes from 14% to 12% for Income Tax from the same date. The Budget documents also describe a higher first-year allowance for main-rate assets from 1 January 2027, but the detail for unincorporated businesses is not clear yet, so we have not modelled it.
Fuel duty on petrol and diesel stays at 52.95p a litre until 30 June 2027, then rises to 60.59p from 1 July 2027. With VAT, that is about 9.2p more a litre. Road tax for vans goes from £360 to £375 and for cars from April 2017 from £200 to £210.
Enter your miles, mpg and pump price to see what the duty and road tax rise adds.
Our guide to mileage rate or actual costs shows how the 35p rate changes the comparison, and the mileage calculator now includes 2027/28.
Making Tax Digital
The Budget added two MTD easements. People required to join MTD for Income Tax in April 2027 will not receive penalty points for late quarterly updates in 2027/28. And some people are exempt until further notice: those with qualifying care relief, non-UK-resident foreign entertainers and sportspeople, and people with expected non-resident customers. Read more in Making Tax Digital for Income Tax and try the MTD checker.
Taking on someone
The National Living Wage rises to £13.21 for people aged 21 and over from 1 April 2027. Employer National Insurance stays at 15% above £96 a week, and the Employment Allowance stays at £10,500 a year. For many small employers the allowance covers the whole NI bill.
Work out the yearly cost of a first employee in both tax years.
See what a first employee costs in 2027/28.
Class 2 and Class 4 National Insurance
Voluntary Class 2 contributions are announced at £3.80 a week for 2027/28, up from £3.65, and the small profits threshold is £7,355. Class 4 stays at 6% on profits between £12,570 and £50,270 and 2% above, so self-employed profit is not taxed more heavily. See how much tax to put aside for how the pieces fit.
Household bills
The temporary 0% rate of VAT on domestic electricity is announced to be extended to 30 June 2027, and a £100 Household Energy Payment is planned for England. These are for households, not businesses, but may matter at home. See our £100 energy payment guide.
What we could not confirm
We did not model: finance cost relief for landlords, Scottish property rates and the 2027/28 Scottish bands, Welsh property rates, or the 2027/28 auto-enrolment thresholds, which have not been published. Where a number is unclear we have said so on the calculator.
What to do now
Nothing is urgent. Keep records, look at your own position with the calculators above, and check back: we will update each page when the Finance Bill is published.
Questions people ask
What did the Budget change for the self-employed?
The main announcements are a £3,000 trading allowance from 6 April 2027, higher tax rates on savings and property income from the same date, a 35p mileage rate above 10,000 miles, a fuel duty rise on 1 July 2027, MTD penalty and exemption easements, and a National Living Wage of £13.21 from April 2027. All are announced and subject to legislation.
Does the Budget change the tax rates on self-employed profit?
Not in the documents we have checked. Self-employed profit is still taxed at 20%, 40% and 45% in England, Wales and Northern Ireland, with Class 4 National Insurance at 6% and 2%. The new 24%, 44% and 49% rates apply to savings and property income.
When do the changes start?
Most start on 6 April 2027, the first day of the 2027/28 tax year. The fuel duty rise starts on 1 July 2027. The mileage rate and trading allowance changes apply to the 2027/28 tax year.
Are the Budget changes law yet?
No. They are announcements in the Budget documents. Parliament has to pass them, usually in the Finance Bill in spring 2027, so some details could change. We label every 2027/28 figure as announced.
Do I need to do anything now?
Probably not. Keep your records tidy, check whether the £3,000 allowance or your real expenses suits you better, and if you are a landlord or saver, look at how much more tax 4 extra points would mean. We will update our calculators as the legislation is published.
Does the Budget affect Making Tax Digital?
It adds two easements. People who must join MTD in April 2027 will not get penalty points for late quarterly updates in 2027/28, and some groups are exempt until further notice. The £30,000 threshold from April 2027 was not changed in the documents we checked.
Where can I check the official figures?
The Budget 2026 overview of tax legislation and rates (OOTLAR) and Annex A, rates and allowances, are both on GOV.UK. We link them in the sources below.
Sources
Checked against the sources below on 28 October 2026. The 2027/28 figures are announced, not law yet, so we will update this guide when the legislation is published.
- Budget 2026: overview of tax legislation and rates (GOV.UK)
- Budget 2026: Annex A, rates and allowances (GOV.UK)
- Change to tax rates for property, savings and dividend income: technical note (GOV.UK)
- Find out if you can get an exemption from Making Tax Digital for Income Tax (GOV.UK)
- National Minimum Wage and National Living Wage rates (GOV.UK)
- Vehicle tax rate tables (GOV.UK)