John Healey‘s first Budget gave founders a 10 per cent capital gains rate and doubled a key share option limit, and asked banks to pay twice the corporation tax surcharge for 15 months.
The fintech and finance specialists who sent reaction to The Fintech Times welcomed most of the founder package. The sharpest warning came from fintech’s own trade body: as drafted, the new relief may not reach fintechs at all.
The founder package
The centrepiece for start-ups is a new Founders’ Relief. From 6 April 2027, qualifying founders of high-growth, innovative companies will pay capital gains tax at 10 per cent on up to £10 million of lifetime gains. Who qualifies is still being settled: the detailed design is out for technical consultation, and the measure will be legislated in Finance Bill 2026-27.
For a narrow group, it reverses a long retreat. Entrepreneurs’ Relief, renamed Business Asset Disposal Relief, had its lifetime limit cut from £10 million to £1 million in 2020, and its rate has since risen from 10 per cent to 18 per cent. The same Budget halves that limit again, to £500,000 from April 2027, so most people selling a business get less relief while a smaller set of high-growth founders get more. On share options, the Company Share Option Plan is relaunched as EMI2, and from 6 April 2027 employees will be able to hold tax-advantaged options worth up to £120,000, double the current £60,000, with the overlap with the Enterprise Management Incentive limit removed.
Arjun Kumar, co-founder of tax software firm Taxd, summed up the reception among founders: “This is a Budget with the right ambition for people who build things: founders’ relief back on the table, better share options, support for young entrepreneurs and a real plan to give cities their own money. But it asks the self-employed to pay tax more often and hits landlords for the third time in two years. Builders are being backed; earners and landlords are paying.”
Janine Hirt, chief executive of Innovate Finance, the industry body for UK fintech, welcomed the share option changes, noting that “many UK FinTechs rely on employee share options to attract and retain staff, making equity a core part of remuneration for ordinary workers.” The relief itself is another matter. “Proposals for a new Founders Relief appear at first glance to reverse the reductions in business asset disposal relief which were made in 2020, for a smaller group of high growth entrepreneurs,” she said. “This is welcome in principle but the eligibility must be extended beyond today’s proposals, which would currently exclude financial services and therefore most FinTechs.”
She added that “some FinTechs remain excluded from the Enterprise Management Incentive scheme and we would encourage this to be reviewed.” Hirt set out Innovate Finance’s wider case in her column for The Fintech Times on the morning of the Budget.
Andy Oury, tax partner at accountancy firm Oury Clark, questioned whether a relief built around founders fits how companies actually grow. “In my experience it’s often not Founders who end up progressing a business to its full potential. Others join along the way as managers, owners and investors,” he said. “It’s a shame Healey didn’t simply revive Entrepreneurs Relief to recognise and incentivise the different parties in the architecture of the SME system that contribute to business growth. But let’s see what the fine print says.”
Non-competes: promised, not yet
The Budget confirms the government will legislate so that non-compete clauses no longer stop start-ups and scaling firms from hiring. It will consult first on the wider use of restrictive practices and set out a detailed position in early 2027, ahead of legislation. Jonno Evans, partner at venture capital firm IQ Capital, said reform “will make it easier for talented individuals to move between companies, launch new ventures and turn innovative ideas into successful businesses.” Emmanuelle Ries, employment partner at Kingsley Napley, read the timetable differently: “The promise to launch a further consultation in early 2027 before legislating pushes this into the medium to long grass. Clearly change is not imminent.”
Banks pay more, for now
The corporation tax surcharge on banks rises from 3 per cent to 6 per cent from 1 January 2027 to 31 March 2028, to help pay for the £100 Household Energy Payment. The Budget says the 15-month period will be legislated in Finance Bill 2026-27 and will not be extended. The surcharge was introduced at 8 per cent in 2016 and cut to 3 per cent in April 2023, when the profits threshold below which banks pay nothing was raised to £100 million.
David Postings, chief executive of UK Finance, said: “Increasing bank taxes is not, in our view, the best way to deliver growth. The Chancellor’s promise that this increase will be time-limited is therefore important, given we already have a tax regime that needs to be made more internationally competitive.”
For challenger banks the threshold matters more than the rate. Hirt pointed out that the surcharge “maintains its £100 million threshold which has historically exempted new banks,” but argued that “in the long term the threshold needs to be raised to provide headroom for our growing digital banks who have been passing interest rates on to savers and are now providing the majority of lending to small firms across the UK.” She also welcomed the Chancellor’s remit letter to the Bank of England‘s Financial Policy Committee, which asks for the next stage of its review of bank capital requirements to make the framework more internationally competitive and to promote competition.
Anil Oncu, CEO of payments firm Bitpace, expects the cost to travel down the chain. “When tier-one clearing banks absorb higher corporate surcharges, mid-market merchants and exporters feel it through higher FX margins, SWIFT fees and account facility charges,” he said.
Capital for small firms
The Budget lifts the British Business Bank‘s financial capacity by £5 billion to £30.6 billion, including £1.4 billion more for equity funds backing high-growth businesses and £450 million for a new venture debt product.
Kristaps Zips, UK CEO of payabl., called it “a welcome announcement from the Chancellor” for fintechs looking to scale, adding: “Fintech has long been one of the UK’s biggest success stories and the key now is making sure this support reaches the businesses that need it.”
Lenders closer to the high street were less impressed. Rob Keown-Boyd, CEO of non-bank SME lender multifi, said the measures “simply don’t go far enough to help the SMEs that are facing a cashflow crisis,” and pointed to his own book: “demand for working capital has kept climbing through 2026; applications are running around a third higher than the same point last year.”
Paul Joyce, partner at mid-market M&A adviser LAVA Advisory Partners, raised a practical question: “You can put a considerable sum behind a scheme and still leave someone running a perfectly good business scratching their head about whether any of it is available to them.”
For open finance, Hirt welcomed a commitment she said Innovate Finance had asked for: the government will explore the use of HMRC data in Open Finance, working with regulators and industry to test feasibility, which she sees as a way to unlock finance for small firms and the self-employed.
Paying tax sooner
From April 2029, people who already make Payments on Account for Income Tax Self Assessment will make smaller, more regular payments through the year instead of two large instalments. Kumar called it “the single biggest revenue raiser in the Budget,” adding: “it comes from cashflow, not from a rate. Cashflow is what kills small businesses.” Oury expects the change in collection to bite hard in its first year: “the transition will be brutal. It will mean roughly eighteen months of tax squeezed into twelve. This could be a solvency event for some.”
E-invoicing gets a date
The Budget confirmed that VAT invoices must be issued in a specified electronic format from 1 April 2029, published an implementation roadmap, and committed to full details of the policy and technical design by April 2028. Pierre Arman, managing director at Alvarez & Marsal, warned that “the full details of the UK e-invoicing regime may not be known until April 2028, which would leave businesses with little time to get ready and could threaten business continuity.”
Alex Baulf, VP of global indirect tax at Avalara, took the opposite view of the same roadmap: “After years of watching Europe press ahead, UK businesses can now stop guessing about e-invoicing. This roadmap provides the clarity organisations have been waiting for and turns April 2029 into a date they can actively prepare for.”
Abigail Myers-Antiaye, VP of global compliance at Basware, pointed to France, where a mandate is already rolling out: “choosing an approved provider did not fix inaccurate customer records or bills that did not match what had been ordered.” Her advice was to start internal preparation now: “Leaving existing invoicing problems untouched means paying to carry them into a new system.”
Markets shrug, for now
Joe Calnan, head of FX dealing at iBanFirst, gave the Budget “15 out of 20. Not because it offers convincing solutions to the UK’s structural economic challenges, but because the exercise was exceptionally difficult, even more so under a new Prime Minister.” He does not expect it to change monetary policy, and still expects the Bank of England to raise Bank Rate by 25 basis points next week.
Todd Laddusaw, CFO at treasury platform Kyriba, cautioned against reading too much into the calm: “The biggest mistake businesses can make after today’s Budget is to mistake a relatively calm market reaction for a clean bill of financial health.” With the next rate decision on 5 November, he said, “the cost of capital remains a moving target.”
What comes next
The Bank of England announces its next interest rate decision on 5 November. The higher bank surcharge applies from 1 January 2027, and the government’s detailed position on non-competes is due in early 2027. Founders’ Relief, EMI2 and the lower £500,000 limit for Business Asset Disposal Relief all take effect from April 2027. Full e-invoicing details are due by April 2028, ahead of the April 2029 mandate.
Source: HM Treasury, Budget 2026
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