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Posted: Wed 28th Oct 2026
11 min read
John Healey’s first Budget raised no broad taxes and changed a lot of small things.
Two of those changes are ones Enterprise Nation asked for in our Budget submission, at the figures and dates we proposed. Here is every measure that touches a small business, what it means for you and when it starts.
Business rates measures apply in England only. Everything else applies UK-wide unless stated.
Aaron Asadi, CEO of Enterprise Nation, said:
“I can’t remember a Budget in which founders and entrepreneurs were mentioned so often.
"A year ago we struggled to find the words ‘small’ and ‘business’ in the same sentence. Today they were front of mind, and for the people who run Britain’s small firms, being seen counts for something.
“In our Budget submission we asked the Chancellor not to add to the burden on small business, and he avoided the broad-based tax rises that would have hit them hardest. Two of the biggest measures for small firms were calls from that submission: the Trading Allowance triples to £3,000, and small business rate relief rises to £18,000 for retail, hospitality and leisure.
“The rates package also gives the high street two years of certainty. Founders’ Relief, the Young Entrepreneurs Allowance and the extra £5 billion through the British Business Bank are the right signals.
"And the measures aimed at households – the energy payment, the electricity VAT cut, fuel duty, the living wage – matter just as much, because a customer with more money in their pocket is the best support a small business can get.
“We’re watchful on a few things. Business Asset Disposal Relief has been halved, so owners selling a business they’ve built over many years will feel that, while the new relief is aimed at a much narrower group.
"The rules on family succession need to live up to the promise in the Red Book.
"And on AI, the government has put far more money into security than into helping small businesses adopt it. Security matters, but the world won’t wait while we get comfortable.
“Anyone demanding big giveaways is asking for money the country doesn’t have.
"The Chancellor faced severe economic trade-offs, with a war in the Middle East pushing up energy prices and borrowing costs, and he can’t pluck money out of thin air without real fiscal risk. Within those limits, the government has done a good job.
“What we need next is strategy, not tactics: a 10-year plan that tells founders which industries we’re backing, how we’ll make this the easiest place in the world to start and grow a business, and what the country stands for.
"Breathing space is welcome. A plan is what we’re waiting for.”
Our first ask was the simplest one. Do not add to the burden.
On trading income, the Chancellor kept to that, and he went further on two measures we put to the Treasury.
Small Business Rate Relief rises to £18,000. From 1 April 2027, the rateable value below which you pay no business rates goes from £12,000 to £18,000, with relief tapering up to £21,000. We asked for those exact thresholds. Around 70,000 shops, cafés, restaurants, pubs, salons and gyms will pay nothing. The relief covers retail, hospitality and leisure premises only, so an office, workshop or studio sees no change.
The trading allowance triples to £3,000. From 6 April 2027, the first £3,000 you earn from trading is tax-free, up from £1,000. We asked for £3,000 by April 2027 and got both. If you run a side hustle alongside a job, that is up to £400 a year back in your pocket.
Every measure here is confirmed and costed in the Red Book.
Rates frozen for the rest of the high street. Bills for other retail, hospitality and leisure premises are capped at inflation for 2027-28 and 2028-29. Government says 120,000 shops avoid an extra £3,250 over two years and 14,000 restaurants avoid £7,500.
Pubs, social clubs and live music venues get a further 20% off from 1 April 2027, taking their relief to 35%, worth over £3,000 a year for the average pub.
Transitional protection continues. Around 37,000 small ratepayers still on the Supporting Small Business scheme keep it for another year, worth around £3,000 each.
Mileage rates rise. The 55p a mile tax-free rate for your first 10,000 business miles is now permanent, and from 6 April 2027 the rate above that goes from 25p to 35p. A plumber or carer driving 15,000 miles a year saves up to £300.
Cheaper imported inputs. Tariffs stay suspended on 269 goods, from tomato paste to bicycle tyres. From 11 November 2026 to 3 February 2027, you can ask the government to suspend tariffs on products you use.
Small brewers and distillers get £10 million a year more in duty relief from 1 February 2027, and a Guest Beer right in the Pubs Code opens more taps to them.
Less paperwork. Government accepted the Small Business Regulatory Taskforce’s recommendations, including simpler bidding for public contracts, fewer ONS surveys and a ‘Tell us Once’ approach to giving your details to government. R&D claims lose their notification form from 1 April 2027.
The family handover tax did not happen. Before the Budget, we warned against taxing the handover of a family business as income. New rules on taking profits out of a company start in April 2028, and the government says genuine handovers to your children keep capital treatment. Draft legislation comes in 2027.
The whole rates package is paid for mostly by online marketplaces collecting VAT and a higher duty on high-stakes gaming machines, so the high street is funded by online and gambling. Vape shops and adult gaming centres lose their rates reliefs from April 2027.
These are pilots, capacity and consultations rather than cash in hand, so the dates matter.
Founders’ Relief. A 10% capital gains rate on the first £10 million of lifetime gains from 6 April 2027, for founders of ‘high-growth, innovative companies’. The tests are still being designed, and most trading businesses will not qualify.
EMI2 share options. The limit an employee can hold doubles to £120,000 from 6 April 2027, so scaling firms can pay more in equity.
British Business Bank. £5 billion more to lend and invest, including £6.5 billion of extra guaranteed lending through your bank, a £450 million venture debt product and £165 million for community lenders, from 2027.
Young Entrepreneurs Allowance. A pilot in England paying towards living costs in a founder’s first year. Size, eligibility and how to apply are still to come.
Women founders. A new scale-up programme and over £100 million of Bank commitments to women-led funds. No launch date yet.
Export finance. A new UK Export Finance guarantee for small firms in 2027, with the General Export Facility opened to first-time exporters and faster approvals up to £15 million.
Youth hiring. The £3,000 Youth Jobs Grant and the £2,000 payment for taking on a young apprentice continue, and £100 million extends mayoral apprenticeship brokerage to all 14 mayors from 2027-28.
Parental pay for the self-employed. Fathers, partners and adopters who work for themselves can claim it from April 2029, over 150,000 parents a year.
Non-compete clauses will be restricted by law so they stop blocking hires by start-ups. Details in early 2027.
Late payment. The Budget restates the government’s commitment, and the Commercial Payments Bill now in Parliament is where the action sits. It caps payment terms at 60 days and gives the Small Business Commissioner power to fine.
None of these made the speech. All of them are in the scorecard.
Selling your business. Business Asset Disposal Relief, the 18% capital gains rate when you sell, has its lifetime limit halved from £1 million to £500,000 from 6 April 2027. Gains above that are taxed at 24%. Three in four claimants are unaffected, on the Treasury’s figures.
Equipment you already own. The writing-down allowance falls from 14% to 12% from April 2027. Most small firms are covered by the unchanged £1 million Annual Investment Allowance, so this bites mainly on cars and older asset pools. Relief on new kit improves, with a 50% first-year allowance from 1 January 2027.
Property and savings income. Tax rises by a further two points from 6 April 2027, four points in total since last year’s Budget, if you let property or hold cash outside an ISA. Cash ISAs keep their £20,000 limit.
Services bought from abroad. From April 2027, overseas providers must charge VAT on services sold to UK businesses that are not VAT registered. If you buy software from abroad and sit below the VAT threshold, expect those bills to rise.
Wages. The National Living Wage rises 3.9% to £13.21 from 1 April 2027, with the 18 to 20 rate at £11.27 and the 16 to 17 and apprentice rate at £8.31. Employer National Insurance is unchanged.
Paying tax earlier. From April 2029, Self Assessment taxpayers who make payments on account will pay in smaller, more regular instalments. You pay the same tax, sooner. The Red Book does not mention the plan to deduct side hustle tax from wages through tax codes, which we opposed, and we will confirm the design once HMRC publishes its response.
From 1 October 2027, marketplaces will collect VAT at the point of sale for UK businesses that are VAT registered or sell over £90,000 a year on that platform. We asked for this change in 2025 to stop overseas sellers posing as UK firms and undercutting you.
Personal and second-hand sales are excluded, and sellers above the line lose the cash they used to hold until their quarterly return.
Energy. The 25% electricity discount goes to around 10,000 energy-intensive manufacturers. A café, salon or workshop on a business tariff gets nothing direct, and the Business Energy Advice Service we asked government to roll out across England is not mentioned.
Hospitality VAT. We asked for a decision either way. The Budget does not mention it.
AI adoption. £30 million funds local pilots in West Yorkshire, South Yorkshire and York and North Yorkshire. There is no national programme, so our Tech Hub remains the place to start.
None of these are business measures, but together they give your customers a little more to spend.
A £100 energy payment reaches 20 million households in council tax bands A to D in January 2027. VAT on household electricity stays at zero to July 2027, worth about £50 a year.
The 5p fuel duty cut runs to 1 July 2027, single bus fares outside London are capped at £2 through 2027, and tariffs come off over 100 supermarket products from 26 November 2026.
From April 2027, mayors keep 20% of business rates, and the aim is 100% local retention by the end of the decade.
Good Growth Funds get £285 million of seed money in 2027-28. Business support, skills and growth money will increasingly be decided in your region, so find out what your combined authority is planning.
Our Growth on Hold research found seven in 10 small businesses shelved a plan to hire or invest this year to cover costs. Our Small Business Barometer found three in four owners now pay themselves under £20,000.
Against that, this Budget cuts costs for high street premises, rewards people starting out and backs founders raising money. If you buy equipment, let property or plan to sell up, it costs you more. The growth most owners shelved this year still waits.
We will respond to every consultation that follows on Founders’ Relief, company distributions and non-compete clauses.
If one of these measures affects your business, tell us. Your cases are what we take to government.
Accountant and founder of DaM Good Business, Davinai McGann, said:
"Overall, my reaction is disappointment. There are some exciting announcements around technology, support for female founders, which I’m particularly interested to learn more about, and the new Founders’ Relief.
"But for most micro and small businesses, including my own and those of my clients, the smaller measures don’t add up to much. Many of the headlines seem aimed at the “big small” businesses, rather than those working for themselves or employing a handful of people.
"For employers, the 3.9% increase in the National Living Wage to £13.21 an hour from April 2027 will increase costs, including the associated employer National Insurance where payable. Better pay matters, but small businesses need the capacity to fund it. An important note, when looking at rises for your staff, business owners should also review their own pay, which too often gets left behind.
"I’m concerned about the pressure on businesses employing younger staff. Young people need opportunities, training and support, and rising employment costs can make it harder for small employers to offer those first steps.
"With personal allowances remaining frozen, it also feels as though too much responsibility for improving take-home pay is being placed on employers, without enough recognition of their own financial pressures.
"There are some good bits.
"Making the 55p mileage rate for the first 10,000 business miles permanent, and increasing the rate above that to 35p from April 2027, will help eligible owners who travel for work,particularly tradespeople and those visiting clients like carers.
"The increase in the full Small Business Rates Relief threshold from £12,000 to £18,000 rateable value could make a meaningful difference to qualifying retail, hospitality and leisure businesses in England.
"However, this isn’t support for every business with premises, and I would have liked to see more direct help with energy costs for ordinary microbusinesses (and a reduction in VAT for hospitality businesses – alas maybe one day).
"For those starting out, the increase in the Trading Allowance to £3,000 from April 2027 is good. It could also help eligible sole traders with low business expenses too.
"There are several areas where I want to understand the detail:
How the marketplace VAT changes will work in practice for smaller online sellers.
The Young Entrepreneurs Allowance pilot in England, offering support towards living costs during the first year of a business, particularly eligibility and the level of support.
How more frequent Self Assessment Payments on Account from April 2029 will affect cash flow, especially for people with uneven or seasonal income.
Who will qualify for Founders’ Relief and the new female-founder support, and how accessible these will be beyond the technology sector.
"For my clients, the priority remains budgeting and forecasting: understanding exactly where they stand today, identifying which changes actually apply to them, and planning accordingly.
"My overall concern is the gap between an ambitious growth agenda and the everyday reality of running a very small business. Supporting future scale-ups matters, but so does helping existing microbusinesses remain viable and provide a sustainable living for their owners."
Archie Sheppard, 21, founder of FM firm Urban Standard, said:
“I welcome the increase in the trading allowance from £1,000 to £3,000, as well as the support being introduced for young entrepreneurs. However, I do question whether a £2,000 increase in the tax-free threshold goes far enough.
“I believe we should be encouraging young people to build multiple income streams, develop skills outside their main employment, and explore business ideas alongside their jobs.
"For many, a side hustle is the first step towards entrepreneurship, financial independence, and potentially building a business that employs others in the future.
"Taxing that early success can become a disincentive. If someone is working hard outside their normal job to earn extra money, test an idea or build something of their own, I would like to see more encouragement for them to take that first step and grow it.
"The aim should be to turn small ventures into sustainable businesses, rather than create additional barriers as soon as they begin to succeed.
“As someone building Urban Standard, I understand that growing a business takes time, financial risk and a willingness to reinvest. Support for young founders is valuable, but it needs to go beyond helping someone get started.
"We need to make it easier for them to grow, access funding, manage costs and create opportunities. Maybe a £10,000 threshold would be better?”
Heather Baker, founder of the AI Edit, said:
“What I was really hoping to see in the Budget was measures that would stimulate economic growth. Because when the economy is growing robustly, and business confidence strengthens, everyone benefits.
"This is what this country needs most and we didn’t see it today, unfortunately.”
Leigh Wells, founder of The Founders Exit, said:
“There’s something for scale and something taken from the everyday. The proposed Founders’ Relief rewards the founders and early backers of qualifying high-growth companies; halving BADR from April 2027 takes a modest bite from ordinary owner-managers, at most £30,000.
“The bigger shift is that the outcome of a sale increasingly turns on dates, stakes and records set years earlier.
"Founders who understand their position early keep the most choice over when and how they exit; those who discover the rules with an offer on the table don’t.”
