Autumn Budget Rewards Risk-Takers But Creates Two Classes Of Founder

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Chancellor John Healey’s first Budget will hand high-growth founders the most generous tax relief since 2020 but halves the lifetime limit on the relief many other business owners rely on, according to accountancy and business advisory firm Johnston Carmichael.

From 6 April 2027, qualifying founders of high-growth, innovative companies will benefit from a new 10%, compared with the standard 24% rate, on up to £10m of lifetime gains. Eligibility will be set following a technical consultation, but the conditions are likely to be stringent.

On the same date, the lifetime limit for Business Asset Disposal Relief (BADR), which reduces the CGT rate to 18%, is halved from £1m to £500,000. A founder who qualifies for the new relief on the full £10m could save up to £1.4m while those who rely on BADR will see their maximum saving fall from £60,000 to £30,000. The Treasury says three in four BADR claimants will be unaffected.

Alex Docherty, Partner and Head of Private Client Tax at Johnston Carmichael, said:

“Ahead of the Budget, we said founders needed a relief that properly rewards the risk of building a business. For high-growth, innovative companies, the Chancellor has delivered exactly that. A 10% rate on up to £10m tells anyone building the next big British business that the UK wants them to do it here."

“But this Budget has created two classes of founder. The engineering firm, the hotel, the family business that sustain jobs in local communities – these are the backbone of the economy, and most are unlikely to count as high-growth and innovative. The cut to Business Asset Disposal Relief affects exactly the owners who spent a lifetime building something substantial. The consultation on who qualifies for Founders’ Relief must address that divide.”

On business tax, the government reaffirmed its Corporate Tax Roadmap. The main rate of corporation tax remains capped at 25%, and full expensing continues for qualifying expenditure. But the balance of capital allowances has shifted. The main First Year Allowance rises from 40% to 50% for qualifying expenditure from 1 January 2027, while the main Writing Down Allowance falls from 14% to 12% from April 2027.

John McAuslin, Partner and Head of Corporate Tax at Johnston Carmichael, said:

“Keeping the 25% cap and full expensing gives businesses planning significant capital investment some continuity. But spending that doesn’t qualify for full expensing will now be relieved more slowly. Any business contemplating material capital expenditure should look carefully at the timing and nature of that investment, and at whether it can qualify for full expensing or the enhanced First Year Allowance.”

David Ward, Partner and Head of Tax at Johnston Carmichael, urged owner-managed and family businesses to watch a potentially significant reform of how company distributions are taxed. The proposals aim to stop profit extraction being structured to obtain more favourable tax treatment, with draft legislation due for consultation in 2027 and the new rules expected from April 2028.

He said:

“The government has committed to protecting capital treatment for genuine changes in ownership, including family business succession, and intends to expand demerger relief in some circumstances. These commitments are welcome, but the detailed rules will be critical in determining how effectively legitimate succession, shareholder exits and commercial reorganisations are protected.”

David also pointed to the sector-specific taxes funding targeted support. The Bank Corporation Tax Surcharge doubles from 3% to 6% for 15 months to help pay for lower energy bills, while Machine Games Duty on higher-stake machines rises from 20% to 25% from April 2027 to help fund a real-terms freeze in business rates for retail, hospitality and leisure properties in England.

It remains to be seen whether Scotland will follow. The Scottish Government will receive an additional £600m through the Barnett formula over the Spending Review period and sets its own Budget on 3 December.

David added:

“The Chancellor has promised breathing space now and fresh hope for the years ahead. But what businesses need most from a Budget is long-term certainty, and once again the rules have changed for people trying to plan ahead. Business Asset Disposal Relief is a case in point. Since 2020, the lifetime limit has gone from £10m to £1m and now to £500,000, and the rate has nearly doubled from 10% to 18%."

“Businesses are built over a lifetime, not a single Parliament. Owners need to plan succession years in advance, and repeated changes to the tax treatment of business disposals make that planning more difficult."

“Moves such as asking Ofgem to scrap gas standing charges are welcome, but they’re tinkering at the edges. A tax system set for the long term and then left alone would do far more for investment and growth than another round of adjustments.”

For more information on Johnston Carmichael, please visit  here.

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Nov 11, 2025

2 min read

Confidence among North West mid-sized companies remains resolute, according to new research from accounting and business advisory firm BDO. In its bi-monthly survey of over 500 mid-sized business leaders, more than two-fifths (41%) of regional businesses are confident about their growth prospects over the next 12 months, the same number as reported by BDO in June.

While conditions remain difficult, the findings suggest many mid-market companies in the region are seeing out the year on a firm footing after a prolonged period of pressure and uncertainty, positioning 2026 as the year when AI investment comes to the fore.

2025 has been a year of transition, according to the Economic Engine survey, with more than two-fifths (44%) of companies now actively investing in AI and a further 53% exploring how it could support operations. The focus has shifted, from whether to adopt new tools, to how to embed them effectively across the business. For example, more than a third (38%) now use AI daily in their tax processes.

Many have adjusted hiring as they rebalance operations around AI and new technologies: 68% of companies hired fewer people overall, while a smaller group (29%) maintained headcount but for different roles.

Looking ahead, 2026 is expected to mark a new phase as AI reshapes workforces more visibly. Three in five (62%) businesses plan to keep overall headcount steady but change the mix of roles. A further 12% expect to increase hiring, while just over a quarter (26%) expect to hire fewer people. The figures suggest that rather than triggering job losses, AI is prompting a gradual shift in skills and responsibilities as companies integrate it more deeply into their operations.

As the North West mid-market looks to consolidate in this area, attention is turning to the Autumn Budget. Regional mid-market leaders are calling for stability and a policy framework that supports investment and cost control, rather than sweeping reforms.

When asked which measures would most support growth, companies prioritised practical cost relief: targeted incentives to cut energy and input costs topped the list at 26%, followed by business rates reform (24%), improved capital allowances (21%) and clearer R&D reliefs (21%).

Nearly a quarter (24%) of North West mid-sized companies want a three-year moratorium on business tax changes, a signal of how highly companies value predictability.

Angela Cross, regional managing partner at BDO in the North West, said:

“The North West’s mid-market has absorbed several years of economic uncertainty and is now showing real resilience. Confidence is standing firm, investment in technology is becoming routine and companies are rebalancing rather than retreating."

“For regional companies investing in technology and reshaping operations, the ability to plan with confidence is now critical. There is a strong desire among businesses for no further changes to taxation at the Autumn Budget to encourage investment. What the mid-market in our region needs is consistency from government: a stable policy environment that turns momentum into lasting growth.”

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Autumn Budget Rewards Risk-Takers But Creates Two Classes Of Founder

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