John Healey’s first Budget as Chancellor may have been short on fireworks, but there were still a few noteworthy sparks for businesses, from a new Founders’ Relief for entrepreneurs to a reduction in the Business Asset Disposal Relief threshold.
In this round-up, Nottingham chartered accountants Clayton & Brewill highlight the announcements from the Budget 2026 most likely to affect businesses, alongside other important changes for individuals and households.
For businesses
- Business rates: Small business rate relief for retail and hospitality businesses will increase from £12,000 to £18,000. Other business rates in these sectors will be frozen.
- National Minimum and Living Wages: As announced pre-Budget, the National Living Wage will rise to £13.21 an hour, while the National Minimum Wage for 18–20-year-olds will increase to £11.27. Around 2.3 million workers are expected to benefit.
- Business Asset Disposal Relief (BADR): The Chancellor announced a reduction in the CGT relief threshold from £1 million to £500,000.
- Founders’ Relief: A new CGT relief will offer a 10% rate on lifetime gains of up to £10 million for founders of successful businesses, with the aim of encouraging them to scale and reinvest in the UK. The Trading Allowance will also triple from £1,000 to £3,000.
- Bank surcharge: The surcharge paid by banks will increase by three percentage points on a time-limited basis. This is below the 5–8% increase that had been expected.
For individuals and households
- £100 Household Energy Payment: Households in council tax bands A–D in England will receive £100 towards their energy bills this winter. This will likely be the headline grabbing announcement, with the government’s council tax band checker already crashing as people check their eligibility.
- VAT on electricity bills: The temporary VAT cut will be extended until 1 July 2027.
- Gas standing charges: These will be scrapped from household bills.
- Fuel duty: The 5p fuel duty cut will be extended until July 2027.
- EV charging: Costs will be reduced at local, lower-powered public charging points.
- ISAs: The planned cut to the Cash ISA allowance has been scrapped, meaning the £20,000 annual tax-free limit will remain for all ages. A new Starter ISA will also be introduced to make investing more accessible. The Lifetime ISA withdrawal penalty for homebuyers purchasing a property at the £450,000 threshold will fall from 25% to 20%. A replacement ISA for first-time buyers is still planned, although it may take a few years to introduce. The Lifetime ISA will remain in place for now.
- Paternity leave: Self-employed fathers will become eligible for two weeks of paid paternity leave.
- First-time buyers: The First Homes Scheme will offer eligible first-time buyers the opportunity to purchase a home at a 30–50% discount to market value. More details here.
