Aisléan Nicholson, tax partner at Deloitte in Belfast, said:
While today’s Budget was Labour’s third of this Government, it was the first from new Chancellor John Healey under Andy Burnham’s premiership and fell on Mr Burnham’s 100th day in office.
Fiscal headwinds and Labour’s continued commitment to its manifesto pledges meant the Chancellor was always going to focus on smaller measures to ease pressure on businesses and individuals while seeking to stimulate growth. Ultimately, that is what we saw.
Many measures intended to ease the cost-of-living crisis and reduce business costs may not directly benefit Northern Ireland. The removal of gas standing charges, extension of the electricity VAT cut - removing the 5% charge through to July 2027 - the £100 household energy payment to be paid directly into bank accounts, and the business rate changes apply in Great Britain rather than directly in Northern Ireland.
Northern Ireland’s benefit from the existing electricity VAT cut was to come through extra funding for the Northern Ireland Executive at Stormont to find a way to benefit local consumers. The same is likely to apply here, so this indirect route could delay the impact of these reliefs for NI residents.
There was a sigh of relief (and perhaps some surprise) when it was confirmed a few weeks ago that capital gains tax would not rise in line with income tax. However, the Business Asset Disposal Relief (BADR) lifetime limit will fall from £1 million to £500,000 for disposals from 6 April 2027, directly reducing the CGT relief available to owners selling qualifying businesses.
NI business owners who qualify for the new Capital Gains Tax Founders’ Relief, anticipated from April 2027, may see some incremental relief outside of BADR. Based on details shared so far, however, availability is likely to be narrower due to shareholding percentages and other gating provisions. We await further detail and draft legislation.
It was a quiet Budget from a corporation tax perspective. There were no changes to the corporation tax rates, as committed, and only some small adjustments to the capital allowances regime, with an increase in the main rate first year allowance from 40% to 50%, but a reduction in the main rate writing down allowance to 12% from April 2027, so businesses should be encouraged to make first year allowance claims.
On positive tax measures, businesses and individuals alike will welcome plans to cancel the proposed fuel duty increase. Locking in the tax-free mileage amount at 55p and increasing the higher rate to 35p will benefit employees who use their cars for work and avail of it. Employers should consider applying these amended rates, and/or making their workforce aware of the available tax deduction — welcome relief in the current climate. No changes to National Insurance rules or rates were announced, although more may follow the Millburn report on youth employment in 2027. However, the National Minimum Wage and National Living Wage will each rise by 3.9% from April 2027, a real cost to some local businesses.
And for individuals, higher income tax rates on savings and property income will impact more affluent taxpayers.
For Northern Ireland taxpayers, policy areas absent from today’s Budget but central to Andy Burnham’s wider focus could have a significant impact in due course. His devolution push, focused on English mayoralties, is likely to affect devolution to the devolved nations. How, we will need to wait and see.
Burnham’s push for a revised EU relationship could also fundamentally impact NI. Our local growth rates, at times exceeding those of the wider UK in recent years are partly tied to our unique position following the Protocol and Windsor Framework agreement. A new UK–EU relationship could see those sands shift again. As always, a changing landscape for NI businesses remains the norm.
Read the Autumn 2026 edition free online →
Stay connected with NI's tech community:
