What the Budget means for dance teachers

The Budget on 28 October 2026 brought three changes that matter for dance teachers. The trading allowance will triple from £1,000 to £3,000 from 6 April 2027, which helps anyone with a little freelance teaching income. Studios in England that count as leisure premises could pay less in business rates, or none, from 1 April 2027. And the minimum wage rises by 3.9% from April 2027, which school owners will want to build into next year’s fees.

Here is what each change means in practice, and what we would do about it now.

The trading allowance goes up to £3,000

The trading allowance lets you earn a small amount from trading or casual work without paying Income Tax on it. According to HMRC’s note on increasing the trading allowance, it rises from £1,000 to £3,000 from 6 April 2027, for the 2027 to 2028 tax year onwards. The Self Assessment reporting threshold for this income rises to £3,000 at the same time.

For a dance teacher, that could cover side income such as a few freelance classes, private lessons, choreography for a local show or adjudicating. If that income stays within £3,000 in a tax year, you may not need to pay tax on it or report it to HMRC. HMRC estimates that 400,000 people will see a lower tax bill, by about £380 on average.

Two things to keep in mind:

• It isn’t law yet. The change will be made by the Finance Bill 2026 to 2027. Until that bill passes, the £3,000 figure is a proposal, and the current £1,000 allowance still applies.
• It doesn’t change this year’s return. The 2025 to 2026 Self Assessment return, due by 31 January 2027, uses the current rules. Our guide to Self Assessment for dance teachers covers the dates and what you need.

If dance teaching is your main business, this change is unlikely to affect you much. The allowance is aimed at small amounts of income, so anyone earning well above £3,000 from teaching will still file a return as normal.

Business rates relief for studios in England

If you rent or own your own studio, this may be the change worth most to you. The Budget raises the small business rate relief thresholds for qualifying retail, hospitality and leisure properties. According to the government’s letter to councils on the Budget package and ICAEW’s summary, from 1 April 2027:

• Full relief up to £18,000. A qualifying property with a rateable value of £18,000 or less can pay no business rates, up from £12,000 today.
• Tapered relief up to £21,000. Relief reduces gradually between £18,000 and £21,000, up from £15,000 today.
• A real terms bill freeze. Bills for qualifying properties will be capped by inflation in 2027 to 2028 and 2028 to 2029.

Does a dance studio count?

The government guidance on which properties qualify lists “premises used for lectures or lessons undertaken for recreational purposes (such as art classes, pottery classes, language lessons and performing arts classes)” and “sport and leisure facilities, such as gyms, sports grounds, and sports clubs”.

Dance studios are not named, so nothing is automatic. The guidance sets out these conditions:

• Main use. The property must be wholly or mainly used for a qualifying purpose, such as recreational classes.
• Open to the public. It must be used by visiting members of the public. Needing a membership or a booking does not rule you out.
• Your council decides. Councils apply the rules and decide whether each property qualifies.
• Schools are excluded. The guidance says schools, creches, nurseries, colleges and universities do not qualify, as they are not open to visiting members of the public.
• One property, usually. Small business rate relief normally applies when your business uses only one property, although you may still get relief if you use more.
• England only. Business rates are devolved, so this applies to England. Scotland, Wales and Northern Ireland have their own schemes.

What to do now

• Check your rateable value. Look up your studio on the Find a business rates valuation service.
• Ask your council. Find your local council and ask whether your studio counts as a qualifying leisure property, and what relief you could get from April 2027.

New minimum wage rates from April 2027

The government has accepted the Low Pay Commission’s recommendations in full. From April 2027, every rate rises by 3.9%:

If you pay teachers, assistants or front of house staff as workers or employees, these are the legal minimums from April. Many dance schools use paid student assistants aged 16 to 20, so the younger rates are the ones to check most closely. Our guide to dance school assistants explains when a helper counts as a worker rather than a volunteer, and how to recruit safely.

Our checklist for the year ahead

• Budget before you set 2027 fees. Work out your staff hours for next year at the new rates, so any fee change for September 2027 is based on real numbers.
• Check birthdays. An assistant who turns 18 or 21 moves to a higher rate, so keep a note of dates of birth with your payroll records.
• Keep records of side income. If you teach a few freelance classes alongside a main job, keep a simple log of what you earn. It will make it easy to see whether the new allowance covers you.
• Watch for the Finance Bill. We will update this post when the trading allowance change becomes law.

This article is general information, not tax or legal advice. Rules can change and your circumstances matter, so check with HMRC or an accountant before you make decisions.