John Healey has delivered his first Budget as chancellor. Here the measures of key interest to small and medium sized business owners.
Trading allowance
The amount individuals can earn from self-employment tax free will increase from £1,000 to £3,000.
Business Asset Disposal Relief
The Business Asset Disposal Relief (BADR) for capital gains tax will be cut from £1 million to £500,000. The follows the BADR rate being increased to 18% in April 2026.
Founders’ relief
A new founders’ relief will provide a 10% capital gains tax rate for up to £10 million of lifetime gains.
Young entrepreneurs allowance
A new young entrepreneurs allowance covering a year of living costs while young founders start a business.
Support for female entrepreneurs
New scale-up programme for female founders.
British Business Bank will double its funding for female-led businesses to £200m.
Business rates
The threshold for small business rates relief (SBBR) for retail, leisure and hospitality businesses in England will increase from £12,000 to £18,000 from April 2027. The government says this means 70,000 more businesses will no longer pay business rates.
For all other retail, hospitality, and leisure properties, business rates will be frozen for
two years.
The Supporting Small Business (SSB) scheme will be extended to 1 April 2027 for those who were in receipt of it 2023 SSB.
Business rates reliefs will be removed for vape shops and adult gaming centres, so the reliefs are “better targeted at businesses that support thriving high street. From April 2027, vape shops and adult gaming centres in England will no longer be eligible for the RHL multipliers, and vape shops will also lose eligibility for SBRR.
VAT for online sellers
Online marketplaces will be responsible for ensure businesses using their platforms that have “significant sales online” pay the VAT they owe.
Business and infrastructure funding
A further £20.4 billion for the National Wealth Fund and British Business Bank.
The £5 billion uplift to the British Business Bank’s financial capacity includes £1.4 billion to invest in equity funds backing high-growth businesses, £165 million for community lenders and £450 million for a new venture debt product providing non-dilutive finance to innovative firms.
National Minimum Wage and National Living Wage
National Living Wage will rise to £13.21 an hour. National Minimum Wage for 18-20-year-olds will increase to £11.27 an hour and to £8.31 an hour for 16 to 17-year-olds and eligible apprentices.
Fuel duty
The 5p cut in fuel duty extended to July 2027.
Tackling small business red tape
The Department for Business, Innovation, Science and Trade has accepted 14 of the 15 recommendations of the Small Business Regulation Taskforce aimed at reducing regulatory
burdens on small businesses.
This include make it simpler to bid for contracts, streamline official business surveys to reduce the number of data requests businesses have to fill out, and implementing the government’s ‘Tell us Once’ ambition.
Tariffs on food products
As previously announced, tariffs removed on over 100 food products, including chocolate and fruit juice.
Small Producer Relief
Small Producer Relief in the alcohol duty system extended to provide £10 million per year of support to over 2,000 small alcohol producers.
AI adoption
£30 million to pilot local partnerships to help small businesses adopt AI to help them grow. It will start with the West Yorkshire Combined Authority, South Yorkshire Mayoral Combined Authority, and York and North Yorkshire Combined Authority.
HMRC and self assessment
HM Revenue & Customs (HMRC) will be given a new power to directly recover from bank accounts “lower-value tax debts from those who can afford to pay but repeatedly fail to do so”.
From April 2029, self assessment taxpayers who make payments on account for tax bills will “make smaller, more regular contributions towards their tax bill throughout the year, bringing payment closer to when income is earned”.
E-invoicing
The government has setting out an implementation roadmap for requiring VAT e-invoicing from April 2029, which is aimed at reducing business’ administrative burdens and improving efficiency.
