Yesterday’s Budget left Corporation Tax and employer National Insurance alone, but there are plenty of changes that will touch small businesses and their owners.

Here is a summary, followed by my view on the new Founders’ Relief and the cut to Business Asset Disposal Relief (BADR).

Here is a summary of the 2026 autumn budget plus views from Mike Watts, FCMA

• National Living Wage rises to £13.21 from 1 April 2027 (up 3.9%)
• National Minimum Wage for 18–20-year-olds rises to £11.27 from 1 April 2027 (also up 3.9%)
• Mileage rates: 55p per mile is confirmed for the first 10,000 business miles, and the rate above 10,000 miles rises from 25p to 35p
• Small business rates relief rises from £12,000 to £18,000 for qualifying retail, hospitality and leisure properties
• Business rates relief for pubs and live music venues increases to 35% from April 2027
• Founders’ Relief: a new 10% CGT rate on up to £10m of lifetime gains (more below)
• BADR: the lifetime allowance is halved from £1m to £500,000 from April 2027
• No changes to Corporation Tax or employer National Insurance

• £100 cash payment for Council Tax Bands A to D, to help with energy bills
• Trading allowance rises from £1,000 to £3,000, so side-hustle income below that level doesn’t need to be registered for Self Assessment (you still need to keep records)
• Savings and property income tax rates rise for 2027/28: basic rate 24%, higher rate 44%, additional rate 49%

“I suspect the biggest boost to the Treasury’s receipts in 2027 will come quietly, from fiscal drag, with personal tax allowances not being raised in line with the 3.9% wage increase.

For small businesses, the most immediate impact is the 3.9% wage rise and the employer NICs that go with it from April 2027. When you work out your customer price rises, please build in this cost along with any increases in materials and services. It may feed inflation, but it protects your margin.”

As an adviser to business owners, I was pleased and surprised to see a new Founders’ Relief. At last, the Government are trying to reward the entrepreneurs who build businesses employing millions of people across the UK.

Then came the very next announcement: BADR halved from £1m to £500,000. That is the opposite message, and it makes no sense. Under BADR’s 18% rate, the maximum lifetime saving is now just £30,000. So I did the inevitable and delved into the detail (links below).

The Founders’ Relief is a 10% CGT rate on up to £10m of lifetime gains for qualifying disposals from 6 April 2027. That £10m will be reduced by amounts claimed under the BADR and Investors’ Relief limits. The conditions, as proposed, are demanding. I have worked alongside many fast-growing SaaS, FinTech and AI businesses, and not one of them qualifies today, at least not yet…..

Important: conditions 1 to 3 must all be met, but for conditions 4 to 6, the company needs to meet at least two of the three tests. Pass the turnover and headcount growth tests, and no R&D is needed. Skip one of the growth tests, and you need the £1.5m of R&D as well.

Either way, the barrier is very high. Sustained growth of 25% a year for three consecutive years is extremely rare, and the R&D test limits the relief to a narrow set of sectors.

Yesterday’s announcement on CGT and BADR will please a few unicorns, but it takes away from the many small business owners who have spent a lifetime building companies and employing people.

As business owners, we can’t make losses indefinitely. We keep cutting costs, improving processes and finding efficiencies, and yes, we put prices up, but that is not our default position. If only the Government were brave enough to do the same.

The proposals are still open for comment. The consultation closes on 30 November 2026, and responses can be sent to [email protected]. If you think the conditions are too narrow, tell them.

Would you like help understanding the new Founders’ Relief and the cut to Business Asset Disposal Relief?

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