UK Budget 2026 – Business and investment measures announced

Posted on 29 October 2026

Below are some relevant measures and announcements made as part of the Government’s Budget 2026. The measures announced include changes for business rates, fuel duty, wage levels and the announcement that Kent & Medway are agreeing a devolution agreement with the Government to establish a Strategic Authority.

UK economic outlook

  • GDP growth: The Office for Budget Responsibility forecasts UK real GDP growth of 1.2% in 2026, an upgrade from its March 2026 forecast. Growth during 2026: Real GDP increased by 0.6% in the first quarter and 0.5% in the second quarter of 2026.
  • Business investment: Business investment grew by 4.8% in the first half of 2026 and was 7.5% higher than at the beginning of the current Parliament.
  • Whole-economy investment: This increased by 2.7% during 2026 to the date covered by the Budget and by 6.9% since the beginning of the Parliament.

Business rates

  • Retail, hospitality and leisure: From 1 April 2027, the rateable-value threshold for 100% Small Business Rate Relief increases from £12,000 to £18,000 for qualifying properties in England.
  • Tapered relief: The upper rateable-value threshold increases from £15,000 to £21,000 from the same date.
  • Rates freeze: Qualifying retail, hospitality and leisure properties will receive a real-terms freeze in bills in 2027-28 and 2028-29.
  • Pubs, social clubs and live music venues: Relief rises by 20 percentage points to 35% from 1 April 2027.
  • Supporting Small Business scheme: The 2023 support will be extended for one further year for eligible recipients.
  • EV charging infrastructure: Eligible public EV charging points and EV-only forecourts receive 100% business-rates relief for ten years from 1 April 2026.
  • Vape shops and Adult Gaming Centres: Existing business-rates reliefs will be removed from 1 April 2027.

Sole traders, founders and employee share schemes

  • Trading Allowance: The Income Tax Trading Allowance increases from £1,000 to £3,000 from 6 April 2027.

  • Founders’ Relief: A new Capital Gains Tax relief will apply to qualifying founders of high-growth innovative companies from 6 April 2027. The entrepreneurship prospectus specifies a 10% rate on up to £10 million of qualifying lifetime gains.

  • Business Asset Disposal Relief: The lifetime limit for eligible gains falls from £1 million to £500,000 from 6 April 2027.
  • EMI2: From 6 April 2027, the individual option limit increases to £120,000, the exercise period increases to 15 years, and the interaction with the EMI option limit is removed.
  • Small Producer Relief: Alcohol Duty Small Producer Relief becomes more generous from 1 February 2027, supported by an additional £10 million a year.
  • Young Entrepreneurs Allowance: The government will pilot a Young Entrepreneurs Allowance in England, providing successful applicants with support towards their living costs during the first year of their business.
  • Women-led scale-ups: This new scale-up women’s programme will test how best to overcome barriers to fundraising and investment for women founders, which could include peer learning, investor networks and practical support on finance and governance.

Investment and business finance

  • National Wealth Fund: It receives an additional £15.4 billion of capital, taking its overall capitalisation from £27.8 billion to £43.2 billion.
  • Energy Wealth Fund: The additional National Wealth Fund capital includes £2 billion for a new Energy Wealth Fund.
  • British Business Bank: It receives an additional £5 billion of capacity, taking its total financial capacity to £30.6 billion.
  • Growth Guarantee Scheme: The scheme is expanded to support £6.5 billion of additional SME lending during the current Parliament.
  • Commercial equity: The British Business Bank receives capacity for £1.4 billion of new commercial-equity investment commitments.
  • Community lenders: The package includes £165 million for community lenders.
  • Venture debt: The package includes £450 million for a new venture-debt product. Capital allowances and R&D
  • First-year allowance: The main-rate First Year Allowance rises from 40% to 50% from 1 January 2027.
  • Writing-down allowance: The main rate falls by two percentage points to 12% from April 2027.
  • R&D Claim Notification Form: This will be removed from 1 April 2027.
  • R&D Additional Information Form: This will be simplified from autumn 2027. Energy and transport
  • Industrial electricity: The British Industrial Competitiveness Scheme begins on 1 April 2027 and includes a backdated payment for eligible businesses. The Budget states that 10,000 energy-intensive manufacturing businesses will receive electricity discounts.
  • Fuel duty: The temporary 5p-per-litre reduction is extended and the planned RPI increase deferred until 1 July 2027.
  • Red diesel: The 3.7p-per-litre duty reduction applies from 15 June 2026 to 1 July 2027.
  • HGV Vehicle Excise Duty: VED for most HGVs is reduced to £1 for 12 months from 1 July 2026.
  • Climate Change Levy: From 1 April 2028, the main rates for electricity and liquefied petroleum gas will be frozen, while the main rates for gas and solid fuels will rise in line with RPI.
  • Carbon Price Support: Carbon Price Support rates will be removed from 1 April 2028.

Business mileage

  • First 10,000 miles: The tax-free and tax-deductible mileage rate for employees and self-employed people using their own cars or vans for work is 55p per mile for the first 10,000 business miles from 6 April 2026.
  • Mileage above 10,000 miles: The rate rises from 25p to 35p per mile from 6 April 2027. Trade and exporting

  • Business tariff suspensions: Tariffs on 72 products were suspended from 5 August 2026, and existing suspensions covering 361 products will be extended during 2027-28.

  • SME export guarantee: A new UK Export Finance guarantee, delivered jointly with the British Business Bank, will launch in 2027 for SMEs that export or intend to export.

  • General Export Facility: Eligibility will be widened to new exporters, with lenders able to access guarantees of up to £15 million.

  • Flexible Finance pilot: The pilot will provide up to £5 billion of guarantees, covering up to 80% of eligible commercial loans to selected overseas buyers. VAT and online marketplaces
  • Online Marketplace Liability: From 1 October 2027, liability is extended to UK businesses with annual sales of at least £90,000 on each marketplace platform.
  • Cross-border services: The VAT reverse charge on supplies of services from overseas to VAT-registered businesses will be restricted from 1 April 2027.
  • Private hire operators: Operators with annual fare turnover above £50 million will be liable for VAT on the full value of their fares from 2 January 2028. ,
  • Low-value imports: The £135 customs-duty relief will be removed and replaced with new customs arrangements from October 2028. Other business measures
  • Corporation Tax: The Government is maintaining the commitments in its Corporate Tax Roadmap, including capping the headline Corporation Tax rate at 25% and maintaining full expensing.
  • Company distributions: The taxation framework for company distributions will be modernised from 6 April 2028.
  • Advance Corporation Tax: Advance Corporation Tax (ACT) will be abolished from 1 April 2031.
  • Machine Games Duty: The rate for higher-stake machines rises from 20% to 25% from 1 April 2027, with liability moving to the machine supplier from 1 April 2028.
  • National Living Wage and National Minimum Wage: On 1 April 2027, the National Living Wage will increase by 3.9% to £13.21 per hour; the National Minimum Wage will increase by 3.9% to £11.27 per hour for 18 to 20-year-olds and by 3.9% to £8.31 per hour for 16 to 17-year-olds and eligible apprentices; and the accommodation offset will rise by 3.9% to £11.53 per day.

Kent and Medway devolution

  • Kent and Medway is in the final stages of agreeing a devolution agreement with the Government to establish a Strategic Authority.
  • The Budget states that it will be a Mayoral Strategic Authority if the Local Government Reorganisation outcome is compatible with that model, and a Foundation Strategic Authority if it is not.
  • The Government will work with the relevant councils to launch a local consultation with key stakeholders as the next step in establishing the Strategic Authority.

These are points addressed in the documents published by the Government and therefore more details for these measures and how they will be implemented is not yet available. This list is provided as a summary for businesses in the Ashford Borough to see the measures announced but should not be used as a definitive document to make business decisions. Further details from the UK Budget 2026 announcements are available on the Government website www.gov.uk

For advice and support we suggest contacting the Kent and Medway Growth Hub or representative organisations such as the Kent Invicta Chamber of Commerce or the Federation of Small Business.