02 November 2026
Chancellor John Healey delivered his first Budget on 28th October 2026, setting out the Government's plans to support economic growth, encourage investment and ease financial pressures on households and businesses.
Against a backdrop of global economic uncertainty, rising costs and pressure on public finances, the Budget combines measures designed to stimulate business activity with changes to taxation that will affect some companies, investors and business owners.
For businesses, understanding how these announcements may affect their operations, investments and future plans will be important.
Supporting business investment and growth
A key theme of the Budget was encouraging businesses to invest, innovate and establish themselves in the UK.
The Chancellor announced a series of measures aimed at supporting entrepreneurs, high-growth businesses and investment in strategic sectors, including artificial intelligence (AI), construction and national defence.
A new Founders' Relief will offer a reduced 10% Capital Gains Tax (CGT) rate on up to £10 million of lifetime gains from 6 April 2027, providing an incentive for high-growth start-ups and their investors.
The Government also intends to increase opportunities for British businesses through strategic public procurement, with plans to introduce a new definition of what constitutes a UK supplier.
These measures could create opportunities for businesses looking to expand, secure investment or compete for government contracts.
Business rates relief for the high street
High street businesses, including pubs, social clubs and live music venues, are set to benefit from changes to business rates.
From 1 April 2027, eligible businesses will receive a 20% reduction in business rates, while the small business rates relief threshold will increase to £18,000.
The changes are intended to ease some of the financial pressures facing businesses operating in high streets and local communities.
However, businesses should review their eligibility and consider how the changes will affect their ongoing operating costs.
Changes to Capital Gains Tax and business relief
One of the more significant announcements for business owners concerns Business Asset Disposal Relief (BADR).
The lifetime limit for gains eligible for BADR will reduce from £1 million to £500,000 from April 2027.
Although the Government has indicated that many claimants will continue to benefit from relief on their gains, the reduction could have important implications for individuals considering selling or disposing of their businesses.
Business owners who are planning an exit, retirement or succession should carefully consider the timing and structure of any proposed transaction.
Early planning may help individuals understand the potential tax implications and options available to them.
Corporation Tax and investment allowances
The Budget also introduced changes to the tax treatment of business investment.
From April 2027, the main writing down allowance will reduce from 14% to 12%. However, the main first-year allowance for new investment will increase from 40% to 50% from January 2027.
These changes are intended to encourage businesses to invest in new equipment and assets, although the impact will depend on the nature and timing of individual investments.
Businesses considering significant expenditure should review the available allowances and seek appropriate advice before committing to major purchases.
Employment costs and workforce considerations
Employers will also need to take account of changes to employment costs.
The National Minimum Wage and National Living Wage will increase by 3.9% from April 2027, adding to the cost pressures faced by businesses employing workers on lower wages.
The Government also announced plans to restrict non-compete clauses when employees move between jobs, alongside measures intended to encourage the movement of skilled workers.
Employers may wish to review their employment contracts and workforce arrangements to ensure they remain appropriate in light of these developments.
Property income and taxation
The Budget also announced an increase of two percentage points in the rates of income tax applied to property and savings income from April 2027.
For property income, this will mean rates of 24% for basic-rate taxpayers, 44% for higher-rate taxpayers and 49% for additional-rate taxpayers.
These changes may be particularly relevant to business owners who also hold investment properties or generate income from property outside their business activities.
Energy costs and support for businesses
Reducing energy costs was another important priority.
From April 2027, more than 10,000 eligible manufacturers will receive support to reduce electricity bills, with the aim of bringing costs closer to those faced by competitors in other European economies.
A £2 billion Energy Wealth Fund will also invest in renewable and low-carbon energy infrastructure across the UK.
For businesses operating in energy-intensive industries, these measures may provide some welcome relief, although the extent of any benefit will depend on eligibility and individual circumstances.
Opportunities in AI, defence and public procurement
The Government reaffirmed its ambition to establish the UK as a global leader in artificial intelligence.
An additional £80 million will support Sovereign AI research and development procurement, creating opportunities for innovative businesses to work on AI solutions in areas including health, care and security.
Businesses operating in the AI and defence sectors may wish to consider whether they are well positioned to take advantage of future government investment and procurement opportunities.
Preparing for public sector contracts may involve reviewing corporate governance, sustainability policies, supply chains and compliance arrangements.
Planning ahead for your business
Although the Budget includes measures intended to encourage investment and economic growth, it also introduces changes that may affect business owners, employers, investors and individuals planning to sell or transfer their businesses.
The implications will vary depending on the size and structure of your business, your investment plans and your personal circumstances.
Taking advice early can help you understand how the announcements may affect your business and whether any existing arrangements should be reviewed.
How we can help
The Budget may have implications for business owners considering investment, restructuring, selling their business or planning for the future.
Our Commercial team can advise on a range of legal matters affecting businesses, including business sales and acquisitions, commercial agreements and business planning.
If you are considering selling or transferring your business, entering into a commercial agreement or reviewing your business arrangements, our solicitors can help you understand the legal implications and options available.
Call us on 01202 526343 or visit our website to arrange a confidential consultation: https://www.absolicitors.com/contact
We support businesses across Dorset, including Bournemouth, Moordown, Winton and Highcliffe.
