Industry reacts: Autumn Budget 2026
Chancellor John Healey has announced the Autumn Budget 2026 in the House of Commons. Some of the announcements include a £100 winter energy payment for 20 million households in tax bands A-D.
He also plans to allocate funding to devolved governments in Scotland, Wales, and Northern Ireland. With regards to businesses, the threshold for small business rate retail for hospitality and leisure businesses will be raised from £12,000 to £18,000 – stopping 70,000 businesses from paying them altogether.
Furthermore, all business rates will be retained locally by the end of the decade with 20% of revenue going to mayors from next year.
There will also be a new trading allowance, raising the amount people can earn from a new venture tax-free from £1,00 to £3,000. The Chancellor also announced the launch of a new young entrepreneurs allowance, which will cover a year of living costs for young founders,
There will also be a specific scale-up programme for female founders, adding that the British Business Bank will double its commitments to women-led businesses in funds to £200 million.
Healey also announces a “founders’ relief”, a 10% rate on lifetime gains up to £10 million for the founders of Britain’s most successful firms.
The opposition has claimed that the budget this year has been limited, with Conservative Leader Kemi Badenoch saying that labour is “addicted to welfare”.
With significant developments being made for those in the startups space – how has the industry reacted to the recent budget?
Business rates relief offers hope for struggling high streets
Warren Abbey, CEO of 365 Finance, said: “Increasing SBRR was a big win for the private sector, especially SMEs and high street businesses across the country. It will purportedly take 70,000 more companies out of paying business rates, a tax that’s hugely problematic for many small businesses, largely because it’s so rigid.”
He added: “Predictable operating costs are part of the picture, allowing them to think about refurbishing a premises, investing in equipment, increasing stock or taking on staff, rather than constantly protecting cash reserves against the next bill. But more must still be done to boost both business and consumer confidence, allowing owners to plan ahead with greater certainty and be more ambitious in planning for growth.”
Rising wage costs put pressure on SME recruitment
Abbey continued: “People need to be paid fairly. Inflation continues to rise, and energy costs are soaring just as winter approaches. But the government cannot give with one hand and take with the other – it is absolutely right that minimum earnings are driven up, but this is why the business rates policies were so important.”
He added: “Increases to minimum wage are most likely felt across retail and hospitality – two sectors already facing significant financial pressures. The danger of higher wages is that businesses respond not by growing, but by postponing recruitment, reducing hours, or passing more costs on to customers.”
SMEs need better access to finance to support growth
Abbey said: “Small businesses need better access to funding. It has become all too clear over the past decade that there is insufficient SME lending coming from high-street banks, so more must be done to improve avenues to alternative lending. Today’s Budget, while include some tax reliefs for startup founders and British Business Bank capital for female-led businesses, did little to improve funding options for established SMEs.”
He added: “Crucially, we have to shift the narrative around business financing. It is not just for innovative new companies, but also, for SMEs, it is not simply something they seek when they are struggling; for many healthy businesses, it’s what allows them to take the next step, whether that means purchasing equipment, refreshing a premises, buying stock or opening another site.”
The British Business Bank said: “Today’s measures announced by the Chancellor are a significant boost to the Bank’s firepower, enabling us to unlock more finance for smaller businesses, innovative scale-ups and strategically important sectors across the UK. This increased capacity will help more ambitious businesses start, scale, and stay in the UK, driving economic growth and creating jobs across the country.”
The Bank’s Budget package includes £1.4 billion in additional capacity to invest in equity funds, £450 million to establish a new venture debt product and a £165 million expansion of its Community ENABLE Funding programme.
Founders welcome tax incentives but call for greater clarity
James Cobb, Founder and CEO of Crowd Connected, said: “At first, it looked like another blow for entrepreneurs. Then the Chancellor announced something that could be the most positive change to founders’ taxation in years. A 10% on gains of up to £10 million would effectively restore the generous relief that entrepreneurs once enjoyed, before successive governments whittled it away.”
He added: “But here’s the catch. We’ve been given a £10 million headline without knowing who’s actually eligible. What does ‘Britain’s most successful firms’ mean? Are we talking about billion-pound unicorns or the thousands of entrepreneurs who’ve spent years building profitable businesses, creating jobs, and contributing to the economy?”
Cobb said: “Britain doesn’t need another sound bite about backing entrepreneurs. It needs to make sure the entrepreneurs actually benefit.”
Entrepreneurs need more than financial incentives
Keith Griffiths, Founder and CEO of The Entrepreneur Festival, said: “The Budget sends an important signal that the Government wants to encourage entrepreneurship, from helping people take their first steps in business to incentivising successful founders to reinvest in the UK. Measures such as the increased trading allowance, support for young entrepreneurs, backing for female-led businesses and the new Founders Relief are welcome. But financial incentives alone won’t deliver ‘growth in every postcode’.”
He added: “Entrepreneurs need more than access to capital. They need the mentorship, networks and practical advice that help them navigate challenges, make better decisions and scale successfully. Yet access to experienced founders and the right support networks remains particularly difficult for those from underprivileged backgrounds and underrepresented groups, in particular.”
Devolution could bring new opportunities for regional businesses
Abbey said: “Devolution has been a defining theme of Andy Burnham’s leadership. The Chancellor gave us a better idea of what this might mean in practice, with confirmation that business rates and tax income receipts will be retained locally in the years to come.”
He added: “On the surface, shifting power away from Westminster could be positive, empowering local leaders to better address the specific challenges facing their towns and cities. This could be a positive change for SMEs, resulting in better public spaces, infrastructure and facilities – this sort of regeneration would, in turn, provide a huge boost to local independent businesses, helping to improve consumer sentiment, footfall and investment prospects.”
However, Abbey cautioned that “while in theory today’s Budget could herald some positive changes for regions across the UK, it is hard to get too excited given the time it will take to make meaningful change.”
Backing SMEs and widening access to entrepreneurship
Michelle Ovens CBE, CEO & Founder of Small Business Britain, said: “It is encouraging to see the Chancellor recognise the huge contribution our 5.7 million small businesses make to the UK economy, and the importance of backing entrepreneurs across the country.
“The increased trading allowance is particularly welcome, making it easier for people to turn side hustles into thriving businesses. The Young Entrepreneurs Allowance also gives young people a welcome launchpad, while support for female entrepreneurs through the British Business Bank is an important step towards unlocking the potential of women in business.
“Growth in SME funding is the right direction of travel, as access to finance remains a critical challenge. Changes to business rates will also bring welcome relief to small businesses at the heart of our high streets and communities.
“Today is a positive step forward, and we must ensure everyone, whatever their background, has the opportunity to start and grow a business. I look forward to working with Government to turn these commitments into real opportunities for small businesses across the UK.”
AI investment must be matched by security, skills, and accountability
Nik Kairinos, CEO and co-founder of RAIDS AI, said: “There have been several high-profile reports of AI breaches over the summer, and this heightened attention is prompting many governments to finally take a closer look at the risks posed by AI. It’s encouraging that the UK has committed half a billion pounds to AI safety and security.”
He added: “Organisations need support in understanding how they can deploy AI responsibly, by having clear audit trails of what their AI is doing, continuous monitoring to compare AI activity with baseline behaviours, and ensuring that human oversight remains, particularly over autonomous agents.”
On AI infrastructure, Kairinos said: “Investment in data centres to boost the UK’s sovereign AI capabilities is important for technological independence, but developing domestic infrastructure does not automatically guarantee AI safety.”
Michael Sturrock, Director of Policy & Public Affairs at the Data & Marketing Association, said: “The UK Government has been, so far, ambitious with its AI investment. There are two sides to this, and tackling the risks of frontier AI is ultimately different from helping British businesses make good use of the technology. Both matter, of course, but the latter deserves just as much attention if AI is to deliver the growth the Government is hoping for.”
He added: “Greater investment in skills, particularly AI, data management and analytics, must also reach the people already working in these industries.”
Ritam Gandhi, Director of Studio Graphene, said: “The Budget recognises two things the UK needs to get right: embracing the opportunities AI creates and backing the entrepreneurs who will turn those opportunities into businesses. Measures to support founders and scale-ups are welcome, particularly when building a business takes time, capital and a willingness to take risks.”
He added: “Ultimately, the opportunity is to build an environment where ambitious businesses can grow, innovate and compete on the global stage.”
This is a developing story. We’ll give updates on the situation as we learn more. 14:17pm 28/10/2026
For more startup news, check out the other articles on the website, and subscribe to the magazine for free. Listen to The Cereal Entrepreneur podcast for more interviews with entrepreneurs and big-hitters in the startup ecosystem.
