The date is now fixed. The Chancellor's letter to the Treasury Select Committee, published on GOV.UK on 31 July, confirms that the Budget will be held on 28 October 2026. That is roughly twelve weeks away.
Between now and then you will be told a great many things about what is in it. Almost none of those things will come from anyone who knows. Pre-Budget season is the one time of year when business owners reliably make expensive decisions on the basis of newspaper speculation, and the pattern is always the same: someone brings forward a large dividend or a disposal to beat a rate rise that never arrives, pays the tax years earlier than they needed to, and cannot undo it.
So this is not an article about what might be in the Budget. It is about the twelve weeks, which are genuinely useful if you spend them on the things you control.
The one rule for the next twelve weeks
Only take an action now if it still makes sense assuming nothing changes on 28 October.
That single test kills almost all bad pre-Budget planning, because most of it only works if the rumour turns out to be true. Bringing a dividend forward, accelerating a sale, or crystallising a gain are all irreversible. If the Budget leaves the rate alone, you have paid tax early for nothing and lost the use of the money in between. If the action is sensible at today's rates anyway — a pension contribution you were always going to make, a disposal you had already agreed — then the Budget is irrelevant to the decision and you should get on with it.
What is already law, and is not in doubt
These are the 2026-27 figures for England, Wales and Northern Ireland. They apply to the tax year we are in and they are not affected by anything the Chancellor says in October.
- Personal allowance £12,570. Basic rate 20% to £50,270, higher rate 40% to £125,140, additional rate 45% above that. The allowance is reduced by £1 for every £2 of adjusted net income over £100,000.
- Dividend tax 10.75% / 35.75% / 39.35%, with a £500 dividend allowance. The ordinary and upper rates each rose by two percentage points on 6 April 2026.
- Capital gains tax 18% within the basic rate band and 24% above it, with a £3,000 annual exempt amount. Business Asset Disposal Relief is charged at 18%.
- Corporation tax 25% on profits over £250,000 and 19% on profits of £50,000 or less, with marginal relief in between. Both thresholds are divided by the number of associated companies.
- Pension annual allowance £60,000, tapering where threshold income exceeds £200,000 and adjusted income exceeds £260,000.
Scotland sets its own income tax rates and bands on earned income; dividends and savings are taxed at UK rates everywhere, which is the mechanism we covered in the piece on Scotland's 48p rate.
Putting real numbers on it
Take an illustrative owner-director paying themselves the common structure: a salary of £12,570 and dividends of £50,000. Nothing exotic, no other income, England.
- The salary produces no income tax. It sits inside the personal allowance.
- The first £500 of dividends is covered by the dividend allowance, at 0%.
- £37,200 of dividends fills the rest of the basic rate band at 10.75% — that is £3,999.00.
- The remaining £12,300 falls into the higher rate at 35.75% — that is £4,397.25.
Total personal tax: £8,396.25 on £62,570 of income.
Run the identical figures at last year's dividend rates of 8.75% and 33.75% and the bill would have been £7,406.25. The same salary, the same dividends, the same company — and £990 more tax, purely because of a rate change that took effect in April and is already law. That £990 is a real, knowable number, and it is a far better use of your attention than a rumour about October.
There is a second number hiding behind it. A dividend tax bill of £8,396.25 is well over the £1,000 threshold for payments on account, so the January 2028 demand is not £8,396.25 — it is that balance plus a first payment on account of £4,198.13, or £12,594.38 in one go, with another £4,198.13 following in July 2028. Owner-directors who have never had a payment on account before are the ones this catches.
Five things actually worth doing before 28 October
1. Get your first MTD quarterly update in — the deadline is 7 August 2026. Sole traders and landlords with income over £50,000 from self-employment and property must submit a quarterly update covering 6 April to 5 July 2026 (or 1 April to 30 June, if you use calendar quarters) by 7 August. HMRC is not issuing penalty points for late quarterly updates in the first year, so this one is free to get wrong — which is exactly why it is worth doing now, while a mistake costs nothing. From year two, each missed deadline is a point, and four points is a £200 penalty. Our guide to Making Tax Digital sets out who is in and when.
2. Model your extraction at current rates, before you draw anything else. The example above took two minutes and produced two numbers the director needed: an £8,396 tax charge and a £12,594 January outlay. If you cannot state your own equivalents, that is the gap to close this month, not in January. How to pay yourself from a limited company covers the mechanics, and the salary and dividend calculator will produce your version.
3. Put the January cash aside now, in a separate account. Twelve weeks to the Budget, and around twenty-five to the 31 January payment. A tax bill you have already funded is an administrative task. The same bill discovered in the last week of January is a cash crisis, and it is the single most common reason a profitable small company ends up on a Time to Pay arrangement.
4. Make the pension contribution you were going to make anyway. An employer contribution from the company is deductible against corporation tax in the period it is paid, so a £10,000 contribution reduces the tax bill by £2,500 at the 25% main rate or £1,900 at the 19% small profits rate. The annual allowance is £60,000. This passes the rule at the top of the article: it is the right move at today's rates, so the Budget does not enter into it — but the contribution has to be paid in the accounting period to be deducted in it, which makes the timing worth checking against your year end rather than leaving to March.
5. Get your bookkeeping current, so that on 29 October you can act in days rather than weeks. This is the unglamorous one and it is the one that decides whether the Budget is an opportunity or an emergency. If your figures are three months behind, any change announced on 28 October reaches you in December, after everyone else has moved. If you have management accounts to the end of last month, you can model the impact the same week. That is the entire practical argument for keeping the numbers current, and it holds whether or not the Budget touches you.
The dates to put in the diary
- 7 August 2026 — first MTD for Income Tax quarterly update deadline for those over the £50,000 threshold.
- 28 October 2026 — Budget day.
- 31 January 2027 — Self Assessment balancing payment for 2025-26, first payment on account for 2026-27, and the filing deadline.
- 6 April 2027 — the date most announced changes to income tax, dividend tax and CGT would take effect from, giving you the window between the Budget and April to respond.
What we will do on the day
We read the Budget documents rather than the coverage, and we publish what actually changed for owner-managed businesses — with the numbers, not the adjectives. If something takes effect immediately, clients hear from us that week. If it takes effect in April, we build it into the extraction review rather than sending a panicked email.
Twelve weeks is a good amount of time. It is enough to get your records current, know your own numbers, fund January and make the contributions you had already decided on. It is not enough to profitably guess what a Chancellor will do, and nobody has ever managed it consistently. Spend the time on the first list.
If you would like your extraction modelled properly before the Budget rather than after it, that is ordinary tax planning and it is built into what we do for clients on our packages.