What professional services need to know – Autumn Budget 2026

The Chancellor’s 2026 Autumn Budget has largely focused on easing cost-of-living pressures, supporting business growth and maintaining fiscal discipline.

While there were no headline-grabbing tax changes aimed specifically at professional service firms, there are several developments that solicitors, accountants and other advisory businesses should be aware of.

For professional service firms, the key takeaway from the budget is that business services continue to be viewed as an important part of the UK growth agenda rather than a source of additional taxation.

Economic growth outlook

The Government’s forecasts suggest the UK economy is expected to see steady growth over the coming years, providing a more stable environment for businesses after a period of economic uncertainty.

For solicitor firms, improved business confidence could lead to increased activity across corporate, commercial, property and private client work as businesses and individuals become more willing to invest and plan for the future. While challenges such as inflation and recruitment pressures remain, the overall outlook from Budget 2026 offers cautious optimism for professional service firms.

Savings and property income tax changes

One of the more significant measures announced in Budget 2026 was the increase in Income Tax rates applicable to both savings and property income from 6 April 2027. The basic, higher and additional rates for these income streams will rise to 24%, 44% and 49% respectively.

Whilst these changes will not directly increase the tax burden of most professional service firms, they are likely to affect many business owners, partners, directors and employees within those firms, as well as a significant proportion of their client base.

Individuals with investment portfolios, cash savings or buy-to-let properties may wish to review their tax and financial planning arrangements ahead of the changes. As a result, firms could see increased demand for private client, estate planning, wealth management and property-related advice.

The Chancellor also confirmed that the annual Cash ISA allowance will remain at £20,000, reversing previous plans to reduce it, which will be welcome news for clients seeking to maximise tax-efficient savings.

Employment costs remain a key consideration

An increase in the National Minimum Wage will have implications for support staff, apprentices and junior administrative roles. Firms should review payroll budgets and salary benchmarking exercises ahead of the new tax year to assess any knock-on effects on wider pay structures.

The Budget also includes measures designed to support skills and apprenticeships. This may provide opportunities for firms looking to strengthen apprenticeship programmes and address recruitment challenges, particularly in support functions and emerging specialist areas.

Continued support for technology and AI

The Government has reaffirmed its commitment to technology-driven productivity improvements. For law firms, this aligns with ongoing investment in legal technology, document automation, AI-assisted legal research and workflow efficiencies. Firms that embrace technology are likely to be better placed to manage rising costs and increasing client expectations.

Business owners and succession planning

The Budget also introduced a new Founder’s Relief, providing a 10% Capital Gains Tax rate on up to £10 million of qualifying gains for eligible business founders. Whilst the detail is still subject to consultation, the measure may be of interest to owners of incorporated professional service firms considering future succession, merger or exit plans. The technical consultation documents there will be significant growth and innovation conditions to satisfy in order to qualify. At the same time Business Asset Disposal Relief has been reduced from £1m to £500,000. Both of these changes take effect from April 2027.

Looking ahead

For professional service firms, Budget 2026 is notable more for what it does not contain than for what it does. There were no major changes to corporation tax, partnership taxation or professional business structures. Instead, the focus remains on economic stability, recruitment, investment and long-term growth. Solicitor practices should continue to focus on workforce planning, technology investment and operational efficiency whilst keeping a close eye on future developments affecting the legal sector.

If the Budget has raised any questions for you, book your place on our question time webinar this Friday at 9:30am. Alternatively, if you would like any further information or guidance on this topic, get in touch with your usual Kreston Reeves contact or contact us here.