The BOSS after the Budget

“A raft of fiddly measures, but very little that will move the dial on growth”: As the IFS’s response reflected, after weeks of speculation over significant tax changes, the Autumn Budget proved something of an anticlimax. After the previous two raised the business tax burden to record high, many at our recent Industry Leaders conference were hoping for a boring Budget.

In that sense, the Chancellor did not disappoint. Crucially, there was little to further dismay business owners already struggling with rising costs, wages and taxes – but also only limited help.

Ahead of the Budget, S&W’s recent Business Owners Sentiment Survey (The BOSS) asked 500 UK owners of firms with revenues of over £500 million down to £5m about their biggest fears.

Topping the list, along with further increases to employers’ NI contributions, were increased capital gains tax rises: widely expected in the run-up to the Autumn Budget to be a top target for tax rises.

Whether in recognition of this or due to fears that increases wouldn’t deliver additional tax revenue, John Healey held off. There were further cuts to the business assets disposal relief (BADR) lifetime limit from April 2027, and while the government estimated that three-quarters of those claiming BADR will not be affected, this continued the dilution of a broad relief.

There was also the newly announced founders’ relief to counterbalance it, although the long list of conditions, as currently draftedm  means that take up may be extremely limited. A more cohesive plan to help people to start, scale and stay in the UK is still needed.

Nevertheless, headline CGT rates did remain unchanged, and Healey avoided many of business owners’ other big worries, too, from wealth taxes to further reductions to pension relief or inheritance tax hikes.

The Chancellor arguably also avoided exacerbating some of the biggest challenges facing businesses.

There was help for some smaller businesses struggling with business rates (and no further rises, if you ignore the reductions in reliefs for gambling and vape shops). It stuck to its manifesto pledge not to raise corporation tax.

Instead, the government announced a series of initiatives and consultations aiming to simplify and modernise the corporation tax system. That ultimately could prove the most consequential legacy of the 2026 Budget, although, as with much else, time will tell.

Business owners are likely to be less thrilled by the above inflation rise to the National Minimum Wage, but they’ll welcome the decision to pause the relentless rise in the rate for younger workers. The BOSS was clear that rapid increases in the rate for under-21s are costing young people jobs. Sixty percent said that they had reduced hiring generally due to rises in the minimum wage (20%) or specifically reduced hiring of under-21s (40%).

While the Budget largely avoided adding to business owners’ woes, however, there were two key problems with it from their perspective.

The first is that, as with concerns about employment costs, it didn’t undo the damage of what came before. Last Autumn’s BOSS survey found 39% saying Rachel Reeves’ first Budget had worsened the prospects for their business.

As S&W’s experts noted in our post-Budget review, John Healey may have avoided making things worse, but it is much less certain he has delivered the conditions for growth. Few expect a huge improvement in trading, said Ben Sharpe, S&W Business Tax Partner. “What they’re optimistic about is being able to survive.”

It’s hardly a ringing endorsement.

The other problem, though, is not that the Chancellor ignored what businesses and their owners were telling them. In fact, when we look at business owners’ wish list captured in The BOSS, the Chancellor touched on many of them, from support for adoption of AI to business rate cuts and policies to reduce energy:

• Data centres received a ringing endorsement, and the government’s ambition to approve projects and the infrastructure to support them was “one of the boldest and most positive policies” of the Budget, according to S&W Private Client Tax Partner Toby Talon.

• There were cuts to business rates, with the threshold for small business rate relief for retail hospitality and leisure businesses increased from £12,000 to £18,000.

• And on energy, there was a commitment to get UK energy costs down in line with Europe, and to only buy and build new clean power generation “when they lower bills”

The BOSS suggests these will all be welcome by business owners, as will the moves towards fiscal devolution, which our survey found significant support for.

From next year, mayors will retain 20% of business rates revenue – “the most radical act of devolution in a generation”, as the Chancellor put it, along with a commitment to allow all business rates revenues to be retained locally by the end of the decade.

That, however, will take us beyond an election and, for many of the other commitments, timelines are unclear.

The Budget was built on a promise of help now and “hope for the future”, and in many cases businesses and their owners can only hope that the real change is yet to come. As with plans to reduce borrowing, the real work has been pushed back towards the end of the parliament.

It was enough to avoid spooking the bond markets; not enough to significantly reassure them. Business owners, likewise, are likely to feel some relief and welcome the warm words and promises of a brighter future. As the IFS noted, however, “It is delivery that really matters.”