Our Insights from the 2026 Budget

After yesterday’s ‘breathing space’ Budget statement, companies of all sizes up and down the country will be poring over the small print to figure out what it all means for them and their business plans in the coming months. Our Corporate specialists set out the stand-out measures business clients should pay attention to:

Ritchie Whyte, Partner and Head of Corporate and Business Advisory, highlighted in particular changes to Business Asset Disposal Relief and the new Founders’ Relief, including support for female-founded businesses. He said:

“There are two stand-out changes in this Budget for business owners, and they pull in different directions.

“The first is a cut to Business Asset Disposal Relief (BADR). From 6 April 2027, the lifetime limit on gains qualifying for the reduced rate falls from £1 million to £500,000. For someone selling a business with a gain of £1million or more, that means £30,000 in additional tax. It continues a long squeeze on the relief, which not so long ago applied to £10million of gains.

“The second is the new Founders’ Relief, which on the face of it is very positive. It is targeted at founders and early investors who have made a long-term, high-value contribution, and it marks a clear change of tack: rather than broad relief for all business owners, the government is focusing support on the key risk takers who are in it for the long haul, creating jobs and economic activity. The aim is plainly to keep wealth creators in the UK. As always, the devil is in the detail, and the qualifying conditions will determine how many founders actually benefit.

“There is also welcome support for female founders, with the British Business Bank doubling its funding for female-led businesses to £200 million. Women still face a much tougher route to investment than their male counterparts, so this is a positive step towards ensuring the next generation of wealth creators is drawn from a wider pool of talent.”

Ritchie also cautioned that while there may have been a collective sigh of relief from business leaders that Capital Gains Tax was left untouched in this Budget, organisations should beware becoming complacent.

He said: “Equally welcome is what the Budget did not do. After years of speculation about aligning Capital Gains Tax with income tax rates, the main rates are unchanged. Many business owners had been rushing to act in anticipation of a rise, so this is a positive message. But they should not be lulled into a false sense of security. This is the moment to take stock of their position, get their house in order and plan ahead, particularly with the changes to BADR coming in April 2027.”

And for the beleaguered energy sector, Rod Hutchison, Partner and Energy Lead, saw much to welcome in John Healey’s inaugural Budget as Chancellor. He said: “For the energy sector, this Budget sends a welcome signal on both security of supply and the transition.

“The approval of Jackdaw is an important step for UK energy security and a vote of confidence in the North Sea. Alongside it, the new £2 billion energy wealth fund to back clean energy and start-ups, linked to the future of the North Sea, is a recognition that the skills, businesses and expertise built up over decades have a central role to play in what comes next. With the government reaffirming its commitment to net zero by 2050, the message is that oil and gas and the transition are not either/or.

“The focus on data centres is equally significant. Grid connection has been one of the biggest barriers to new projects, so a stronger offer of support on energy connectivity, and new powers to accelerate connections before 2030, could unlock investment and create jobs in a fast-growing sector. The new Data Centre Covenant makes clear that support will go to projects which deliver for local communities and the wider economy.

“For businesses across the energy supply chain, these are real opportunities. The detail on how the fund will operate, and who can access it, will determine how quickly they can be taken up.”