Budget 2026 reaction

Chancellor John Healey has presented the government’s tax and spending plans in the first Autumn Budget since Andy Burnham became prime minister. 

Key points included:

• Surcharge banks pay on their profits to rise from 3% to 6% for 15 months, starting in January

• Threshold at which High Street shops start paying business rates in England to be increased from £12,000 to £18,000

• Gambling centres and vape shops will not qualify for business rates relief

• Taxes on gambling machines to rise from 20% to 25% for higher-stakes machines
• Requirements for online marketplaces like Amazon, eBay and Temu to be strengthened to prevent sellers using their platforms avoiding paying VAT
• Legal minimum wage to rise by 3.9% in April
• All business rates to be retained locally by the end of the decade, with mayors to keep 20% of revenue from next year

A selection of business leaders share their insights…

Douglas Ure, Chief Executive Officer of Business West

“This was a Budget delivered against a backdrop of significant fiscal constraints, but it’s good to see support for businesses through measures on energy costs and business rates relief. The continued focus on investment, growth and strategic sectors is also welcome, particularly in areas where our region has real strengths and ambitions to grow, like AI, defence and life sciences.

“It’s great to see the West of England recognised with £10 million of funding for Bristol Temple Quarter. This is one of Britain’s biggest regeneration schemes, with huge potential to drive investment, create jobs and support economic growth, not just in Bristol and the wider region, but nationally too.

“We strongly welcome the Chancellor’s announcements to widen devolution across the South West, establishing Mayoral Strategic Authorities across our region. The South West of England has significant untapped economic potential, and these new authorities can provide local leaders with the powers and funding needed to tackle the region’s key challenges and unlock new opportunities for growth.

“We’re also really pleased to see the Government committing to a roadmap for fiscal devolution. Giving local areas more control over their finances, and stronger incentives to support businesses and grow their economies, is really important. The proposals for 100% business rates retention by the end of the decade, with 20% going to mayors from 2027, are a significant part of that.

“Of course, the detail will be important, but there’s a real opportunity here to give local and regional leaders more of the tools they need to drive growth.”

Matthew Drew, Managing Partner, Goughs Solicitors

“For businesses, there was good news for entrepreneurs with the British Business Bank doubling its commitment to women entrepreneurs to £200m. Those starting up businesses are rewarded for taking risks by a 10% lifetime founders relief up to £10m. Housebuilders will welcome the freeze on new building regulations and the likely boost to first-time buyers through the new Equity Loan Scheme. The additional commitment to affordable housing and brownfield site deregulation could boost new builds. Smaller businesses in hospitality and leisure will welcome the Business Rates cuts. Less welcome was the planned reduction in the Business Asset Relief on business disposals. Pledged cuts of government red tape are easy to announce, but difficult to implement, so we won’t hold our breath!  

“Perhaps the biggest boost to confidence will be stability. This is not a budget to rock boats, upset the financial markets or impact interest rates. Recent budgets and the endless policy leaks leading up to budget day have been extremely damaging. There is a lot to be said for continuity and a cautious first budget from the new Chancellor. Individuals should feel more confident their personal plans will not be blown off track by homegrown policy decisions. Businesses will be very relieved there are no new taxes to dent internal budgets or investment plans.”

Sally Holland, Accountant and a Partner at PPS Chartered Accountants

“Another disappointing budget. As suspected he has again hit business asset disposal relief (BADR) reducing the threshold from £1m to £500k again hitting the entrepreneurs. We continue to have a fiscal drag with the income tax thresholds still frozen, but then we didn’t really expect he would increase this. Small businesses will benefit from the business rates relief, but there did not seem to be much else to help.”

Maria McCallum, joint Managing Director of The Electrical Compliance Collective (TECC), Swindon

“Small businesses are constantly being told they’re the backbone of the British economy, but we need to see that reflected in the decisions being made.

“As a family-run electrical company employing around 23 people in Swindon, we want to grow, recruit and invest in the next generation of skilled workers. But rising employment costs and increasing overheads mean every decision to take on additional staff comes with greater financial pressure.

“We’ve put our money where our mouth is. We’ve invested in larger premises, a new showroom and dedicated apprentice training facilities because we believe in the future of our business and the local workforce.

“But ambition alone doesn’t pay the bills. If the Government wants businesses like ours to create jobs and train young people, it needs to make employing people more affordable, not more expensive.

“The electrical industry has a vital role to play in the UK’s transition to cleaner energy, but we need the right support to help customers invest in technologies such as solar panels, battery storage and EV charging.

“I’m unsure that this Budget helps us with these goals.”

Andrew Wilkinson, Secure Safety Solutions

“Today’s Budget offers some welcome breathing space, but for a small health and safety consultancy like our’s, the practical benefits appear modest. Our ability to grow depends on managing costs, maintaining client confidence and having enough capacity to invest in people.

“Extending the 5p fuel duty cut until July is helpful for a business that travels to client sites, inspections and training sessions. It provides some certainty around one part of our travel costs, although it does not remove the wider pressure of fuel prices. The announced minimum wage increases will also need to be considered when planning entry-level recruitment. Fair pay matters, and creating a sustainable opportunity means budgeting for wages alongside training, supervision and development.

“The business rates relief announced for retail, hospitality and leisure could help some of our clients but appears unlikely to provide direct relief to a consultancy like ours. Where clients benefit, this may give them more room to invest in their businesses, including workforce development and workplace improvements. However, that remains a potential indirect benefit rather than a guaranteed increase in demand for our services.

“What we were particularly hoping to see was a clearer commitment to helping small businesses train young people and open more doors into the health and safety profession. The support announced for young entrepreneurs is encouraging, but starting a business and entering a profession involve different needs. Young people also need accessible routes into employment, recognised qualifications, practical experience and support from experienced professionals.

“Health and safety can offer a rewarding career, yet getting that first opportunity can be difficult. Employers often look for experience, while young applicants need someone to give them the chance to develop it. Small consultancies can help bridge that gap through paid placements, apprenticeships and supervised entry-level roles. Doing this well takes time and resources, a new starter needs mentoring, exposure to different workplaces and a structured path towards competence.

“We would therefore have welcomed more explicit support for qualification costs, paid work experience and the time small employers invest in mentoring. Funding needs to be straightforward to access and flexible enough to support smaller professional service businesses. The announcements reported so far do not identify dedicated support for entry into health and safety careers, so the detailed measures will matter.

“Our ambition remains to create worthwhile opportunities for young people and help build the next generation of safety professionals. Investment in those opportunities can benefit employers, workers and the wider economy by strengthening the skills needed to prevent injury and ill health. For us, the test of this Budget will be whether its measures make it more practical and affordable for a small business to turn that ambition into a sustainable job, supported training and a lasting career.”

Ramona Derbyshire, Head of Business Growth, Thrings

“A new “Founders Relief” will cut Capital Gains Tax to 10% on up to £10million of lifetime gains for those founding innovative, high-growth companies, with the tax-free trading allowance tripling from £1,000 to £3,000. Under the Budget proposals employee share schemes will also be expanded, and it was announced that improvements would be made to simplify venture capital schemes and R&D tax relief. 

“The announcement also brought good news for businesses looking to hire, with new legislation to prevent non-compete clauses from obstructing startups and scaling firms being able to recruit the people they need. The chancellor confirmed that detail on wider restrictive practices would come in early 2027. 

“Retail, hospitality and leisure businesses will also benefit through an increase to the Small Business Rates Relief threshold, which will impact around 70,000 further businesses – a move the government claims will result in half of the businesses in those sectors paying no business rates.” 

More opportunity for SMEs to win public contracts 

“The Budget has also sought to make procurement easier to access, with the chancellor announcing a new ‘British’ supplier definition, so that preferential treatment goes to firms creating genuine investment and jobs in the UK. This is accompanied by a target to spend more than £7billion directly with SMEs by 2028.” 

Easier access to capital 

“The National Wealth Fund and the British Business Bank will share an extra £20.4billion, which the government claims will aid their role in supporting reindustrialisation, regional growth and Britain’s strategic industries. In the Budget, it was also announced that the latter would be getting more equity capacity and a new venture-debt offer, with a particular focus on smaller firms. 

“For growing businesses that struggle to raise funding at the right time, more choice beyond traditional bank lending will be welcome, with the Treasury claiming the extra capital will help create or support 140,000 jobs.”