The UK Budget 2026 for Polish entrepreneurs mainly changes how much tax you pay on business profits, savings, property income and future exits. From 2027, higher rates on savings and property, new reliefs for founders and new reporting rules mean you must refresh your forecasts, not just roll last year’s budget forward.
If you run a Polish‑owned business in Britain, you are probably already straddling two tax systems, two languages and very little spare time. The risk this year is simple: you underestimate how much these changes move your numbers, so your 2027–2029 plans are built on old assumptions.
The Budget documents from HM Treasury and HMRC make clear that this is not a single tweak but a sequence of shifts spread over several years, starting in April 2026 and running well into 2029. Income tax on savings and property will be higher, while some business reliefs are being restricted and others improved for genuine high‑growth founders. You can read the technical detail in the government’s overview of tax legislation here.
Our goal in this article is not to repeat every clause. Instead, we will highlight the handful of measures most likely to affect a Polish entrepreneur running a micro or small business in the UK—especially those juggling consultancy, trades, e‑commerce, property and family finances.
From April 2027, tax on savings and property income rises. According to HMRC’s Annex on rates and allowances, the savings basic rate jumps from 20% to 24%, the higher rate to 44% and the additional rate to 49% (Annex A). New property income tax bands mirror these 24% / 44% / 49% rates.
For you, this matters in three ways:
On the business side, you still have a £1 million Annual Investment Allowance for plant and machinery, which lets many small firms expense qualifying spend in year one. But the standard writing‑down allowance rate on the main pool will drop from 14% to 12% from April 2027, meaning slower tax relief on assets you cannot fully expense.
A practical example: imagine your limited company invests £60,000 in machinery in 2027 but only £40,000 qualifies for immediate relief. The remaining £20,000 goes into the main pool. Under 14% you would deduct £2,800 in year one; under 12% it’s £2,400. That £400 difference may look small, but repeat similar gaps across vehicles, tools and IT and you quickly have a few thousand pounds less tax relief in early years. Build that into your cash‑flow forecast, not just your accountant’s year‑end conversation.
Finally, from 2029 HMRC plans to move Self Assessment payments on account towards smaller, more regular “timely” payments, likely via Direct Debit. If you are used to two big tax payments in January and July, you will need to treat income tax more like a monthly bill, just as you probably already do with ZUS in Poland.
Two capital gains changes are crucial if you are building a company you might one day sell. Business Asset Disposal Relief (BADR)—the relief many still call Entrepreneurs’ Relief—will see its lifetime limit halved from £1 million to £500,000 on gains from 6 April 2027. Above that, you pay normal capital gains tax rates.
At the same time, the government plans a new Founders’ Relief. The proposal is a 10% capital gains tax rate on up to £10 million of lifetime qualifying gains for founders and significant early investors in high‑growth, innovative UK companies. Draft conditions include at least a 25% initial shareholding, a five‑year holding period, UK residence tests and demanding growth and innovation criteria.
For many Polish‑born entrepreneurs who have built strong businesses in the UK—especially in construction, technology, logistics or professional services—BADR was the simple answer: structure the shares correctly, hold them long enough, then sell and claim 10% on up to £1 million. From 2027, the old “I’ll just get BADR” assumption no longer works in the same way.
Consider two scenarios:
This is why exit planning should now be part of your three‑ to five‑year budget, not an afterthought. If your ambition is to sell, you should:
Talk to a tax adviser who understands both UK rules and the Polish angle (for example, where you might be tax‑resident at exit). But go into that meeting with your own numbers and questions, not just a vague hope that “there will be some relief”.
Not every change is long‑term strategy. Several Budget measures will quietly change everyday trading costs from 2026–2027 onwards.
First, the trading allowance for small amounts of trading income rises from £1,000 to £3,000 from 6 April 2027. If you run a main business and occasional side activities—training, small online sales, consulting—the first £3,000 of that extra income can be covered by the allowance, potentially removing the need to deduct small expenses line by line.
Example: a Polish electrician in Birmingham does £2,400 a year of extra weekend work, invoicing directly as a sole trader alongside a limited company salary. With the £3,000 trading allowance, that side income may fall entirely within the allowance, simplifying the tax position.
Second, mileage rates improve. From 6 April 2026, the tax‑free and tax‑deductible mileage rate for using your own car or van for business rises from 45p to 55p per mile for the first 10,000 miles. The rate above 10,000 miles increases from 25p to 35p from April 2027. If you or your team drive a lot to client sites, this matters.
Do one quick calculation: if you drive 8,000 business miles a year, the allowable cost at 45p was £3,600. At 55p it becomes £4,400—a £800 increase. At a 20% tax rate that’s £160 extra tax relief; at 40% it’s £320. Not life‑changing, but worth reflecting in your cost‑per‑job and pricing.
Third, the National Living Wage (NLW) and National Minimum Wage (NMW) rise by 3.9% from 1 April 2027. The NLW will be £13.21 an hour, adding roughly £910 a year in gross pay for a full‑time worker on that rate. If you employ staff in hospitality, cleaning, care, logistics or retail—common sectors for Polish‑run firms—you must build this into your staffing budget now, not wait for your accountant’s year‑end forecasts.
Many Polish entrepreneurs in the UK sell through Amazon, Etsy, eBay or niche marketplaces. From October 2027, VAT rules for online marketplaces tighten again. If your annual sales exceed £90,000 on a particular marketplace, that platform becomes responsible for collecting VAT on qualifying sales made through it.
Practically, there are three thresholds to track:
A useful detail for many smaller sellers: if you are not VAT‑registered and sales on each marketplace stay below £90,000, the marketplace will not collect VAT under the new rules. But this does not remove your obligation to register for VAT once you cross the general registration threshold across all channels.
Example: a Polish‑run brand sells £70,000 a year on Amazon UK and £40,000 through its own Shopify site. Total sales are £110,000, so it must be VAT‑registered. However, its Amazon turnover is still below £90,000, so the new marketplace collection rule would not yet apply. You, not Amazon, remain responsible for VAT on those Amazon sales.
You should:
Polish founders are often strong operationally but under‑invest in accounting systems. With marketplace rules getting more complex, this is the moment to tighten your data, not rely on spreadsheets.
The Budget also nudges how you might pay yourself and key staff.
Dividend tax rates were previously increased from April 2026 by 2 percentage points in the basic and higher bands, leading to rates of 10.75% (basic), 35.75% (higher) and 39.35% (additional). Combined with the higher savings and property income rates from April 2027, the traditional “very low salary, very high dividends” strategy is less obviously optimal than it was five or ten years ago.
For a typical Polish‑owned consultancy or construction company, a balanced mix tends to work better now:
Run at least two pay‑mix scenarios in your forecast: one favouring dividends and one favouring salary, each with updated rates. Even a 2–4 percentage point shift in tax rates can move several thousand pounds a year for a director‑shareholder couple.
On the employee side, tax‑advantaged share schemes become slightly more generous. The Company Share Option Plan (CSOP) is being rebranded as EMI2 (Enterprise Management Incentive 2), with individual option limits doubling from £60,000 to £120,000 and the exercise window extending from 10 to 15 years. For Polish‑founded tech or professional‑services firms in London or other hubs, this makes it more realistic to use options to retain senior staff without paying Silicon Valley cash salaries.
If you plan to scale and maybe bring in non‑Polish senior hires, it is worth understanding EMI and EMI2 now, not just when a lawyer mentions them during a funding round.
As a founder, your business and personal finances are tightly linked. The Budget makes several changes here too.
First, the government has confirmed that the annual ISA limit will remain at £20,000 rather than dropping to £12,000 for most savers. A new Starter ISA will be created to encourage first‑time investors in stocks and shares, and a First Time Buyer ISA will eventually replace the Lifetime ISA for new savers. For a Polish entrepreneur saving for a UK home or building a GBP‑denominated investment pot, the message is simple: the £20,000 tax‑free ISA allowance is still there—if you can, use it.
Second, a new Pension Tax Allowance from April 2027 ensures many people whose only income is the State Pension do not pay tax or need to file a return just because the State Pension exceeds the standard Personal Allowance. While this mainly affects retirees, it matters if your long‑term plan is to part‑retire in Poland while drawing a UK State Pension. Make sure your long‑term projections use the updated figures.
Third, residential energy changes may indirectly affect you if you work from home. Standing charges on household gas bills are to be abolished from 2027, with electricity standing charges to follow. Government estimates suggest around 60% of households could save about £45 a year, though high‑usage households may not benefit. For self‑employed people and directors working from a domestic address, this slightly changes the pattern of energy costs you might apportion to the business.
Add in the ongoing temporary 0% VAT rate on residential electricity until 30 June 2027 and the extended 5p cut in fuel duty until the same date, and you have a subtle but real shift in running‑cost structure. On their own these changes are small, but together they can change the real cost of commuting versus home‑working, or electric versus petrol vehicles, over a three‑ to five‑year plan.
Budget changes only matter if they show up in concrete decisions. For Polish entrepreneurs in the UK, there are five practical steps worth taking in the next 60 days.
Refresh your three‑year forecast with new tax rates. Build a simple model that:
Map key dates in your diary. Note April 2026 (mileage change, dividend rate increases), April 2027 (new income tax rates, NLW/NMW rise, trading allowance increase), October 2027 (marketplace VAT rules) and April 2029 (timely tax payments). Treat them like product‑launch milestones, not abstract fiscal years.
Segment your revenue by channel and marketplace. If you sell via Amazon, Etsy or other platforms, start reporting sales per marketplace and per country now. That way, when the £90,000 per‑marketplace VAT rule hits, you will already know whether you are over or under the line.
Review your long‑term exit narrative. Even if exit feels far away, sketch what a “good sale” would look like: timing, value and where you’ll be tax‑resident. Then ask: with BADR cut to £500,000 and Founders’ Relief rules tightening, what needs to change in your share structure, growth plan or IP ownership over the next five years?
Choose advisers who speak both your languages—literally and commercially. A Polish‑speaking UK accountant or tax adviser who actually reads Budget notes—not just headlines—will quickly earn their fee in this environment. Bring them a clear summary of your numbers, not a shoebox of invoices.