Chancellor Healey Unveils Founders Relief and Adjusts Business Tax Caps in Budget

Chancellor John Healey unveiled a new capital gains tax relief for qualifying company founders during his Budget announcement on October 28, 2026. The policy grants qualifying founders a 10 per cent tax rate on gains up to £10 million to encourage reinvestment in Britain. Alongside this, the government reduced the lifetime limit for the separate Business Asset Disposal Relief (BADR), with the Chancellor stating that three out of four claimants would experience no change.

Detailed criteria for accessing the new founder relief have not yet been released. Beyond tax caps, the Chancellor outlined plans to update rules regarding profit withdrawals from companies, promising to safeguard genuine commercial activity and family business transfers. The Budget also includes raising the trading allowance to £3,000, launching a living-cost allowance for young entrepreneurs, and introducing EMI 2 to double the generosity of company share option plans.

Additional announcements focused on workforce flexibility and targeted support for business leaders. The government plans to modify skilled worker visas and non-compete clauses to facilitate worker movement between successful firms. Additionally, the British Business Bank will double its financial commitments to women-led funds and businesses to £200 million, following recommendations from the Women in Tech Task Force.

The policy changes come amid broader economic debate and recent changes in government advisory teams. Alex Depledge stepped down as the Treasury's entrepreneurship adviser on October 24, alleging that ministers treated innovation as a secondary priority. Meanwhile, economic commentators and industry figures highlighted that clear qualification rules and tax stability remain critical to maintaining investor confidence and preventing market distortion.