BUDGET 2026: What you need to know if you’re a business owner

Chancellor John Healey called this a Budget for British businesses, big and small. Which could have led you to believe this would be a Budget packed full of announcements. But, for the first time in three years, and perhaps to many people’s relief, the Autumn Budget arrived without a package of sweeping tax and rules changes for businesses to get their head around.

Overall, it was about stability and encouraging green shoots of growth. Good news?

Well yes, but while some businesses may benefit from new support that’s being offered, others face disappointment.

So, what was announced, and what could it mean for your business?

1. Selling your business could become more expensive

One of the biggest changes affects Business Asset Disposal Relief (BADR), which allows eligible business owners to pay a reduced rate of Capital Gains Tax when selling their business.

From 6 April 2027, the lifetime limit on gains eligible for this relief will fall from £1 million to £500,000.

This doesn’t mean the relief is disappearing, but it could mean a larger tax bill if you’re a business owner planning to sell assets and make qualifying gains above the new limit.

What you can do: If you’re planning to sell your business, it’s worth understanding how the change could affect you. Take professional tax advice before making decisions about when or how to sell.

2. Some high street businesses will get help with business rates

The government has announced further support for retail, hospitality and leisure businesses in England, including shops, restaurants, cafés and hairdressers.

From April 2027, the threshold for 100% Small Business Rate Relief for qualifying businesses in these sectors will rise from a rateable value of £12,000 to £18,000. The threshold for tapered relief will increase from £15,000 to £21,000.

Business rates bills for qualifying retail, hospitality and leisure properties will also be frozen in real terms for two years. Pubs, social clubs and eligible live music venues will receive additional relief.

What you can do: If you run a high street business, check whether your property qualifies and how the changes could affect your next business rates bill. Not every business will qualify for the same support.

3. The trading allowance is increasing

From 6 April 2027, the tax-free Trading Allowance will rise from £1,000 to £3,000.

This allowance applies to certain trading and miscellaneous income received by individuals. It could be useful if you’re starting a small side business or earning extra money from trading activities.

Be careful though – it isn’t a £3,000 tax-free allowance on all business profits, and the rules differ depending on your circumstances so do your research before assuming it applies to you.

What you can do: If you earn money from a small business or side hustle, check whether the increased allowance could simplify your tax affairs.

4. A new tax relief for successful business founders

The Budget has also introduced a new Founders’ Relief, designed to encourage entrepreneurs to build successful, innovative businesses in the UK rather than move abroad.

From April 2027, eligible founders of high-growth, innovative companies will be able to pay a reduced Capital Gains Tax (CGT) rate of 10% on up to £10 million of qualifying gains over their lifetime.

CGT is the tax you may pay when you sell an asset for more than it cost you. For a business owner, this could mean a tax bill when you sell your company and realise a profit.

The new relief could therefore make a significant difference to qualifying founders who build a successful company and eventually sell it. However, it won’t automatically apply to everyone who owns or sells a business. It’s intended for founders of qualifying high-growth, innovative companies, and the detailed eligibility rules will matter.

It is also separate from Business Asset Disposal Relief, which is being scaled back from April 2027. Depending on your circumstances and whether your company qualifies, Founders’ Relief may offer a more favourable tax rate on qualifying gains.

What you can do: If you’re building a business that you hope to sell in the future, keep an eye on the eligibility rules as further details emerge. If you’re already planning an exit, speak to a qualified tax adviser about how the new relief and the changes to Business Asset Disposal Relief could affect you.

5. There are changes if you use your own vehicle for work

The government has made the 55p-per-mile tax-free rate for the first 10,000 business miles permanent for employees and self-employed people using their own car or van for work.

The rate for business mileage above 10,000 miles will also increase from 25p to 35p per mile from April 2027.

This could help tradespeople, consultants and other self-employed people who rely on their own vehicles.

What you can do: If you use your own vehicle for business, check the rules and keep accurate mileage records so you can claim the relief you’re entitled to.

6. A young entrepreneurs allowance

A new young entrepreneurs allowance was announced. The allowance will cover a year of living costs for young founders who turn their ideas into a business. The Chancellor also announced a new scale-up programme for female founders.

The government Budget document says: “Too often, a major barrier to new entrants is a lack of support with personal finances, with young entrepreneurs not always being those with the best ideas, but those with access to family support. The government will shortly pilot a Young Entrepreneurs Allowance, providing successful applicants with support towards their living costs during the first year of their business.”

On the female founders scheme, the Budget document simply states: “Two new voluntary industry standards developed by the Women in Tech Taskforce, ‘Tech Forward’ and ‘Inclusive Investment’, will drive more inclusive employment practices in tech and fairer
access to investment for female entrepreneurs, supporting women to start and scale businesses and build careers in tech.”

We await more details.

The bottom line

This wasn’t a Budget full of across-the-board, headline-generating tax cuts for businesses. However, there are some changes that could be helpful to the bottom line.

For business owners planning to sell, the reduction in Business Asset Disposal Relief could be more concerning.