Policy briefing: Autumn Budget

What has been announced?

On Wednesday 28 October 2026, the Chancellor delivered the Government’s Autumn Budget. Most of the announcements focused on the wider UK economy and the cost of living, including fuel. Health spending did not feature strongly, but several measures will affect optometry practices and our self-employed members. These changes include:

Driving

• The mileage expense rate for business miles above 10,000 a year will rise from 25p to 35p from April 2027 
• The 5p cut in fuel duty has been extended to 30 June 2027. From 1 July 2027, rates will return to their previous level and rise in line with inflation 
• The per-mile charge for electric (3p) and plug-in hybrid (1.5p) cars announced last year will go ahead from April 2028 as planned. 

Business

• The National Living Wage for those aged 21 and over will rise by 3.9% in April 2027, from £12.71 to £13.21. The National Minimum Wage for 18 to 20-year-olds will also rise by 3.9%, from £10.85 to £11.27 
• The lifetime limit for Business Asset Disposal Relief will be cut from £1m to £500k from April 2027 
• A new Founders’ Relief will offer a 10% rate of Capital Gains Tax on up to £10m of lifetime gains from April 2027. The qualifying conditions are strict, including shareholdings at start-up, turnover of at least £10m, at least 15 staff, and evidence of growth or R&D, so very few practices are likely to qualify 
• The first-year capital allowance for main-rate assets will rise to 50% for spending from January 2027. The annual writing-down allowance on remaining balances will fall to 12% from April 2027. Most small practices will still be able to deduct equipment costs in full through the Annual Investment Allowance 
• Making Tax Digital for Income Tax extends, as previously planned, to those with qualifying income (turnover) over £30,000 from April 2027 and over £20,000 from April 2028. The Budget confirmed there will be no late-submission penalty points for quarterly updates in the first year for those joining in April 2027 
• Income tax and National Insurance thresholds remain frozen, as previously announced 
• From April 2029, Direct Debit will be compulsory for VAT and PAYE liabilities, with some exceptions 
• For retail, hospitality and leisure properties in England, the threshold for full Small Business Rate Relief rises from £12,000 to £18,000 of rateable value from April 2027, and tapered relief will end at £21,000 instead of £15,000. Opticians were classed as retail under the previous relief scheme, and we are seeking confirmation that this will continue 
• From October 2027, online marketplaces such as Amazon and eBay will be required to collect VAT on sales made through them by UK sellers.

Health 

• An extra £190 million has been allocated for the NHS in England in 2026-27, to help with additional pressures over winter and the rest of the year. The Royal College of Emergency Medicine welcomed the funding but warned that, unless it is targeted, the modest sum will be a “sticking plaster” with little effect on ED overcrowding and corridor care 
• The Chancellor and the Health and Social Care Secretary have asked Mark Bailie to lead an independent review of NHS productivity and AI, which will inform the next spending review. It reports in early 2027 
• £100m from the NHS Transformation Fund has been allocated to expanding robotic surgery 
• The Treasury says the NHS delivered more than £10 billion of efficiencies and savings in 2025-26, equal to 5.2% of its day-to-day spending budget (RDEL), and that agency spending fell by £900m (43%) compared with 2024-25. 

What do we say

The Autumn Budget is light on healthcare spending, with some reallocation of existing funds to deal with immediate pressures such as emergency care. Our Eye care everywhere policy and campaigning work on eye-related A&E attendances can help here by making sure only those who need to be in A&E departments are there. The Bailie review of NHS productivity is an important opportunity to make the case for moving more eye care into community optometry, and we will be engaging with it.

As identified last year, our view is the uplift to the National Living Wage creates two problems for optometry practices: an additional cost pressure, and the squeezing of pay differentials within practices. Without a meaningful uplift to the funding that optometry receives, this change, while good news for many people, will affect practices’ ability to recruit new staff. The continued freeze on tax thresholds will also reduce the benefit of any pay rises.

There is good news in the increase to the mileage allowance for business miles above 10,000 a year, which will benefit locum optometrists and those working in the domiciliary sector. This will be tempered by the per-mile charge on electric and plug-in hybrid cars from April 2028, and by fuel duty rising again from July 2027. Many members have switched business vehicles in response to emissions rules and in pursuit of better fuel efficiency, and will soon be taxed more heavily for those choices.

The higher threshold for Small Business Rate Relief will help smaller practices, and some businesses recently brought into paying business rates may once again benefit. We will be seeking confirmation that optical practices qualify as retail premises for this relief. Alongside this, the changes for online marketplaces may help with at least the perception of fairness, even if the actual impact on optometry practices is limited.

The reduction in Business Asset Disposal Relief will be a concern for members planning to retire and sell their businesses in the near future, and they may wish to take advice before April 2027.

The extension of Making Tax Digital to lower incomes from April 2027 will create an additional administrative burden for locums. The first-year penalty easement is welcome, but quarterly reporting will still be required, and locums should make sure they have compatible software in place.

We will keep members updated as further detail emerges, including on business rates eligibility for optical practices. In the meantime, we will continue to make the case to Government that sustainable funding for primary eye care services is essential to relieve pressure on the wider NHS.

Our Employment law team has updated our guidance for members on changes to National Minimum Wage, and our summary of important changes to the Employment Rights Act 2025.

For tax and accountancy help, discounted support for members is available, including annual accounts, tax returns, and a free tax refund service. For decisions on tax, we recommend seeking advice from an accountant.

Members receive automatic cover through Markel Tax in respect of tax investigations and VAT disputes.