Eight things you may have missed from the 2026 Budget, and how they affect your rural business
We look beyond the headlines and pick out a number of announcements from the 2026 Autumn Budget that could impact those who live and work in the countryside
Disappointingly for farmers and rural businesses, any announcement in the Chancellor of the Exchequer’s budget on inheritance tax reliefs was conspicuous by its absence. Despite resounding calls from the rural sector, CLA and other countryside advocates, no changes were announced to the reforms to agricultural property relief (APR) and business property relief (BPR).
Largely, in John Healey’s budget, “the challenges rural areas face have been overlooked,” according to CLA President Gavin Lane. But there were announcements on red diesel, small business rates and Biodiversity Net Gain which will be of interest to rural businesses and CLA members.
Other updates which will affect rural land and property managers include:
National Minimum Wage and Living Wage increase
What was announced?
The government announced that the National Living Wage and the National Minimum Wage would be increasing by 3.9% from 1 April 2027. This means an increase to £13.21 per hour for workers 21 years of age or older.
The National Minimum Wage rate for workers aged between 18 and 20 will increase to £11.27 per hour. The rate for 16 to 17-year-olds and eligible apprentices increases to £8.31 per hour, with the accommodation offset rising to £11.53 per day. This follows the Low Pay Commission recommendations.
What does this mean for you?
The cost of doing business is already rising as a result of the increase in energy and fuel costs, due mainly to the ongoing impact of the Middle East and Ukraine conflicts. For those who manage small and medium-sized rural businesses, the year-on-year rise in the National Living Wage will add to these costs.
Devolution of tax revenues to mayors
What was announced?
The Chancellor announced that under the Fiscal Devolution Roadmap, a new funding model will allow mayors to receive a proportion of income tax receipts starting in 2028, alongside more receipts from business rates. Mayors will retain "a 20% share of locally retained business rates from next year (2027), and with local and regional government retaining 100% of business rates income by the end of the decade."
What does this mean for you?
A key priority for the Burnham government is the rapid expansion of devolution – that is, the faster reallocation of powers from central government to regional strategic authorities and local unitary authorities. The government's Fiscal Devolution Roadmap, that was published at the same time as the budget, will allow mayors greater autonomy in the use of local taxes.
The CLA will publish further analysis and feed into the details of the implementation as they get defined.
Zero-rate on land sold to social housing providers
What was announced?
The government will introduce a zero-rate of VAT for land sold to registered providers of social housing which will take effect from 1 April 2027.
What does this mean for you?
Currently sales of land are exempt from VAT, unless the landowner has opted to tax, in which case the standard rate would be charged on top of the sale price and the VAT on fees incurred are recoverable.
Many landowners have not opted to tax, which means that currently, sales of land are exempt and the VAT they incur on related fees would not be recoverable. By zero-rating these sales from 1 April 2027, members will be able to recover VAT associated with selling land for social housing.
Founder’s Relief (Capital Gains Tax)
What was announced?
The government will introduce a new 10% Capital Gains Tax (CGT) rate on up to £10m of qualifying lifetime gains for founders and significant early investors in high-growth, innovative UK companies.
The relief is intended to apply to qualifying disposals of shares made on or after 6 April 2027. A technical consultation has been launched on the detailed individual, company, growth and innovation conditions.
What does this mean for you?
Founders’ Relief is not a new Entrepreneurs Relief, although it is modelled on how that used to work by reducing the CGT rate to 10% on £10m of qualifying lifetime gains. It is intended to support founders and significant early investors in high-growth, UK tech companies.
The relief could therefore be relevant to businesses involved in qualifying agri-tech, food-tech or other innovative rural companies. However, an ordinary family farm or rural business should not assume that it will qualify. Much will depend on the final definition of growth, innovation, ownership and investment conditions following consultation.
The CLA will review the consultation proposals carefully and represent members’ interests as the detailed rules are developed.
Optimising environmental regulation
What was announced?
The government will be “testing more efficient approaches to the delivery of environmental regulation and the management of rural land and natural resources to reduce administrative burdens while maintaining environmental protections and standards”.
What does this mean for you?
This is part of enabling growth and investment and is not specific to rural businesses. A Regulation for Growth Bill will establish new powers to test innovative solutions and approaches. Some environmental legislation has already been reviewed, such as the Dan Corry review and the Cunliffe Review on water – which has led to the Water Reform Bill, planned to help unlock funding for nature-based solutions.
This further work should bring benefits in streamlining regulations, making them simpler to understand and comply with, reducing conflicts, and removing barriers to growth where appropriate. It won’t be a wholesale removal of environmental regulation and the CLA will be feeding in ideas, based on members’ feedback.
Moratorium on building regulation changes
What was announced?
No more major changes to building regulations for the remainder of this Parliament, unless they relate to safety. The government will also consider how to amend regulations where doing so would support development, by being more proportionate.
What does this mean for you?
The announcement will give some certainty to small and medium-sized enterprise (SME) developers. However, without similar certainty in the planning system, removing unnecessary red tape and build cost inflation coming down, there will be no increase in rural homes built.
The Building Safety Levy on sites of 10 dwellings or more came into force at the beginning of October and adds prohibitive costs to SME developers; the budget was silent on this.
Renewables pricing
What was announced?
Alongside the 2026 Budget, the UK Government has opened a consultation on proposed Wholesale Contracts for Difference (WCfD) for existing low carbon power generators. The intention is to benefit consumers by offering fixed prices to generators instead of the variable wholesale market price.
What does this mean for you?
Relatively few land managers and CLA members will be directly affected if the proposals are taken forward. In any case, WCfDs are only proposed to apply to older legacy renewable generation schemes supported by the Renewables Obligation with installed capacities of >5 MW or >10 MW (threshold to be decided).
For those operating such installations, participation is proposed to be voluntary so negative impact on project economics should be avoidable. The price certainty of a WCfD could potentially be of benefit to projects where Renewables Obligation support is due to end. Exposure of those who lease land to renewables operators will depend on the specific terms of their lease agreement with the asset operator.
High Value Council Tax Surcharge
What was announced?
A 100% premium on properties which are subject to the High Value Council Tax Surcharge (aka ‘mansion tax’) and left empty and unoccupied for 12 months or more.
The government also published its response to its consultation on the surcharge, which it intends to introduce from April 2028. Much detail is still to be announced.
What does this mean for you?
The CLA’s consultation response in July criticised the new tax as a policy tool, outlined many practical problems in its implementation and stressed the need for exemptions, including for farmhouses and heritage, to avoid unintended consequences. The government has made very few concessions.
The response does however confirm a (yet unspecified) discount for farmhouses and farmworkers’ accommodation on working farms. It also promises that everyone affected will be given “clear and accessible explanations of the evidence and valuation considerations”. And (though this may not hold for long), the government drew back from its threat to cut the threshold from £2m to £1.5m before the tax is even introduced.
The 100% surcharge premium will be very damaging for members who are already struggling with planning, listed building consent and financing to bring these properties back into use.
If you have any further queries or concerns following the announcements within the budget, please reach out to your local CLA regional office for support.