Budget 2026: What does it mean for you and your business?

Budget 2026: What does it mean for you and your business?

The Chancellor delivered the 2026 Budget on 28 October, announcing a range of tax measures affecting individuals, business owners and investors.

For many of our clients, the biggest announcement is a significant change to Business Asset Disposal Relief (BADR), alongside changes to the taxation of savings and property income and business investment reliefs.

Business Asset Disposal Relief: a major change for business owners

Business Asset Disposal Relief, formerly known as Entrepreneurs' Relief, can reduce the Capital Gains Tax payable when qualifying business owners sell their business.

Currently, qualifying gains are subject to an 18% Capital Gains Tax rate, compared with the standard higher CGT rate of 24%.

The Chancellor has now announced that the lifetime BADR limit will fall from £1 million to £500,000 for qualifying disposals from 6 April 2027.

This is particularly important because the £500,000 is a lifetime limit, rather than an allowance that resets each year.

What could this cost?

Consider a shareholder making a qualifying £1 million gain on the sale of their company.

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Under the existing £1 million lifetime limit, assuming the individual has not previously used any BADR:

£1 million taxable at 18%

Capital Gains Tax: £180,000

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For a qualifying disposal from 6 April 2027:

First £500,000 at 18% = £90,000

Remaining £500,000 at 24% = £120,000

Total Capital Gains Tax: £210,000

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That represents an additional £30,000 of tax on a £1 million qualifying gain.

Our view at Adams Moore: if you are already genuinely considering a sale, management buyout, company purchase of own shares or wider succession plan, now is the time to review the structure and likely tax consequences.

If you are you thinking of selling your business, please talk to us.

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A new Founders' Relief

The Government has also announced plans for a new Founders' Relief of a 10% tax rate..

However the restrictions are very severe, and we only think this will effect a very narrow range of businesses.

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Changes for business Investment

There was a mixture of good and bad news for businesses investing in plant and equipment.

The full-expensing regime is being maintained, while a 50% first-year allowance is being introduced for some qualifying expenditure. However, the main writing-down allowance rate is being reduced from 18% to 12% from April 2027.

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Personal taxes

From 6 April 2027, separate rates applying to savings income will be 24%, 44% and 49%, depending on the taxpayer's band.

For property income, new rates of 24%, 44% and 49% are also due to apply from 6 April 2027 in England, Wales and Northern Ireland, subject to the devolved arrangements described by the Government.

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As always if you have any questions please get in touch. We are always here to provide total support for you and your business.

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At Adams Moore, we work with owner-managed businesses on starting, growing, tax planning, succession, and exiting..