Autumn Budget 2026 – industry comment

Today’s Autumn Budget combined targeted relief for households and small businesses with new support for entrepreneurs and innovation, as Chancellor John Healey sought to ease cost pressures while maintaining fiscal discipline.

Higher business rates relief, an extension of the fuel duty cut and incentives for founders sat alongside a temporary increase in the bank surcharge and higher minimum wages, presenting a mixed picture for businesses weighing up investment and growth.

Framed as providing “breathing space”, the Budget comes against an uncertain economic backdrop, with the OBR forecasting growth of 1.2% this year before slowing to 1% in 2027.

The balance between immediate support, additional costs and longer-term ambition sets the stage for industry reaction, with access to finance, business confidence and the practical delivery of the announcements likely to shape their impact.

Industry reaction and outlook

“The real test of this Budget is not simply how much public money the Government commits, but how much private investment it unlocks.

“We welcome the Chancellor’s recognition of the pressures facing households and businesses, and the importance of strengthening investment and economic growth.

“The additional £20.4 billion of capital for the British Business Bank and National Wealth Fund represents a significant opportunity. But its success will depend on how effectively Government works with the private finance providers already supporting businesses across the UK.

“Every day, FLA members finance the machinery, equipment, vehicles and technology that businesses need to invest, become more productive and create jobs.

“Public finance should be a catalyst for private investment, not a substitute for it.

“We want to see specialist asset finance providers playing a central role in delivering the Government’s ambitions, particularly through the expanded Growth Guarantee Scheme and initiatives designed to support regional growth and investment.

“At the same time, the decision to increase the Bank Corporation Tax Surcharge highlights the need to consider the cumulative impact of taxation and regulation on the finance market.

“We recognise the difficult fiscal choices facing the Chancellor. But if the Government wants lenders to support more investment, it must ensure that the overall policy framework encourages competition, confidence and the availability of finance.

“The Budget’s measures to support household finances and address energy costs are also welcome. However, improving living standards requires more than immediate financial relief. It means enabling people to make investments that improve their lives, whether that is accessing a reliable vehicle to get to work, replacing essential household goods or making their homes more energy efficient.

“If business finance helps create economic opportunity, consumer finance helps people access it. Both are essential to delivering growth that benefits households and communities across the UK.

“We also want to see a stable and predictable approach to the transition to electric vehicles, ensuring that taxation and other policy measures support consumer confidence and affordable mobility.

“The FLA will continue working with Government to ensure that the UK’s finance market can make its full contribution to investment, productivity and sustainable economic growth.

“The ambition now must be to turn the announcements in today’s Budget into investment in the real economy.”

“For small businesses up and down the country, this was a bare minimum Budget. Despite pockets of welcome news, much of what they need to thrive has not been delivered.

“Support for retail, hospitality and leisure businesses is needed. But the UK’s SME landscape goes far beyond those sectors. The manufacturers, construction firms, wholesalers, hauliers and service businesses that make up much of the SME economy are still facing a significant tax burden. They have been left on the same rate, overlooked once again.

“The rise in the National Living Wage and National Minimum Wage will support those who are struggling with the cost of living, and fair pay matters. But once again, this cost has been shifted onto SMEs. Businesses are still absorbing the 2025 employer National Insurance increase. Now they face yet another rise in the cost of employing people, with nothing in this Budget to help them carry it.

“The Government wants growth in every postcode. To get it, SMEs need relief on the cost of doing business and more confidence to invest. This Budget has done little to provide either.” 

“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.”

“Overall, this Budget goes some way towards reassuring SMEs that their needs are being heard. There are welcome measures around business rates, fuel duty, reducing red tape and support for new entrepreneurs. However, the reality is that businesses are still dealing with rising wages, high operating costs and an uncertain economic outlook.

“While the Budget offers some positive steps, access to flexible finance remains critical for SMEs.”   

Angus Milledge, Head of New Business Sales at SAP Concur, said: “The Government’s announced roadmap towards digital tax reporting is a positive and much-needed step in helping businesses improve how they manage their finances. As expectations around data accuracy, transparency and accountability increase, organisations relying on manual expense claims, disconnected systems and paper-based processes may find it more challenging to maintain efficient financial processes and visibility across spending.

“Digital invoice and expense management can help businesses capture spending information more consistently, support adherence to company policies and give finance teams greater visibility over costs. With tax authorities making greater use of data analytics and automation, access to timely, reliable financial data will be increasingly important in helping organisations meet reporting requirements and support informed decision-making.

“Businesses should view digitalisation not simply as a response to changing requirements, but as an opportunity to improve how they manage and gain greater visibility into spend. By connecting travel, expense and invoice processes, organisations can strengthen oversight, support more efficient financial operations and enable their teams more time to focus on strategic priorities.”

“The fleet and leasing industry has long-urged the Government to provide greater certainty for drivers by freezing Benefit-in-Kind rates at 9% for all fully electric vehicles (EVs) through to the 2031/32 tax year.

“While the 1% increase from 2030/31 may at first appear modest, it’s unwelcome and risks creating yet another barrier for drivers who are considering switching to an EV. It comes at a time when the Government is looking to accelerate the transition to greener transport, so this incremental rise sends the wrong message to drivers and businesses alike.

“There’s also the added complexity of the eVED set to be introduced from April 2028, which creates further uncertainty surrounding the Government’s long-term approach to fleet electrification. We speak with fleet operators and drivers on a daily basis; they need confidence and certainty to plan effectively. A clear direction of travel is essential if the UK is to meet its zero emissions mandate by 2035.”

“The confirmation that benefit-in-kind tax for electric company cars will rise by just one percent to 10% in 2030/31 is welcome news and gives both employers and drivers some much-needed certainty.

“Knowing the rates through to 2030/31 will help the industry work out the total cost of ownership and price four and five-year vehicle leases more accurately. It should also restore confidence in the long-term future of salary sacrifice schemes, which have a big part to play in encouraging EV take-up.

“We’re disappointed, however, that the Chancellor hasn’t taken this opportunity to make used electric company cars more affordable. Drivers are still taxed on a vehicle’s original list price, even when it has depreciated significantly. Changing this could have opened up electric cars to more employees through salary sacrifice schemes, while also helping to boost demand in the second-hand market and support residual values.

“The government may have claimed to remain ‘unshakably committed to net zero’, but the continued rise in electric company car tax and the introduction of pay-per-mile charging from 2028 will add to costs at a time when many businesses are already under pressure.

“The extension of the fuel duty cut is obviously welcome, particularly for businesses running vans, and the increase in mileage allowance rates certainly reflects the cost of driving for work more accurately. But we need to be careful that higher allowances don’t encourage employers to move away from company cars in favour of employees using their own, potentially older and less safe vehicles.”

Richard Hogg, VAT Partner at Forvis Mazars, said: “Confirmation of a roadmap toward the mandation of e-invoicing might fly under the radar in a Budget focused on fiscal discipline and the cost of living, but the implications for business are huge. At face value, it’s one of the most significant VAT administration reforms in years. 

“Part of broader efforts to digitise tax with a view to reduce and better manage reporting and collection gaps, the reform will bring the UK into line with other tax jurisdictions where it has already been mandated. But the roadmap also provides an opportunity to learn from other countries’ mistakes in the implementation process. 

“Even if businesses which operate across international jurisdictions already have experiences in e-invoicing compliance, they would still be advised to begin planning now so that they’re not blindsided by the new system of invoicing processes and contracts. [A prudent exemption for small businesses reduces administrative complexity for many firms.”

Angus Milledge, Head of New Business Sales at SAP Concur, said: “Today’s rate cuts and Founder’s Relief are welcome steps in the right direction and continued support for high-growth sectors, including technology, financial services, and professional services, will be crucial in maintaining the UK’s competitiveness and growth ambitions.

“As startups and fintechs weigh up where to grow, invest and create jobs, measures that encourage innovation, investment and entrepreneurship will ensure the UK remains a place where businesses can scale, succeed and build their futures.”

Alex Baulf, VP of Global Indirect Tax at Avalara, said: “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. That’s a positive step for both businesses and the wider economy. In fact, we found that e-invoicing could unlock £8.8bn for the UK through productivity gains, faster payments and reduced fraud. Done well, it could seriously help the Chancellor narrow the UK’s £12.1bn VAT gap. With a clearer picture in place, firms can get on with mapping their invoice flows, improving data quality and making sure they’re ready to capture the benefits when the mandate arrives.”

Robert Birchall, Partner, Tax at Charles Russell Speechlys, said: “At first sight, this appears to be a mixed Budget for entrepreneurs. The new founders’ relief is a welcome signal that the Government wants to incentivise and reward people who build UK start-up and scale-up companies. But halving the BADR lifetime limit, straight after the rate rose to 18% in April, makes it challenging to call this an entrepreneur-friendly package and brings into sharper focus the question regarding what purpose this relief it is meant to serve going forwards. Since 2020, the BADR lifetime limit has fallen significantly, and each cut erodes the payoff for entrepreneurs who take the risk of building a business in the UK and employees who receive EMI options.

“In contrast, founders’ relief looks to be aimed at encouraging successful firms in the UK, but the real challenge is helping many more businesses become standout British scale-ups. Founders will judge this Budget on whether the net effect makes it more attractive to start, grow and stay in the UK.” 

Suzanna Kemal, Head of HR at Reward Gateway | Edenred, commented: “Pay rises are welcome news for workers facing continued cost-of-living pressures, and fair pay should remain a priority for employers and Government alike. But the challenge is ensuring higher wages go hand in hand with a healthy jobs market.

“With youth unemployment and the NEETs crisis demanding urgent attention, we cannot afford to overlook the barriers businesses face when hiring entry-level talent. Pay is only one part of the equation – employers also need the confidence to recruit, invest in skills and create opportunities for young people to get their foot on the career ladder.

“The answer is not to choose between better pay and more jobs. It is to create the conditions for businesses to grow, employees to feel financially secure and young people to build sustainable careers. A strong labour market must deliver both fair wages and real opportunities.”  

Pete Glancy, Head of Policy at Scottish Widows, commented: “Women are still on track to retire on around £6,000 less a year than men according to our latest research. The gender pay gap is a major driver of that inequality, so greater transparency on salaries in job adverts can help ensure pay reflects the role rather than the gender of the candidate. Doubling funding for female-led scale-up businesses should also help level the playing field for women building their own businesses.”