Experts Comment: Did The Autumn Budget Give UK Startups And Scale-Ups What They Asked For?

Budget day is a bit like results day for founders: weeks of speculation, one announcement and a scramble to work out what it all means.

The Chancellor delivered the Autumn Budget on 28 October, and the verdict is mixed. The small-business rates relief threshold for retail, hospitality and leisure rises from £12,000 to £18,000, the Bank Surcharge goes up by an extra 3% and taxes on savings and property income increase, while the main rates of income tax, VAT and National Insurance stay where they are.

A 50% jump in the rates relief threshold is welcome news for businesses that qualify, but it arrives alongside a time-limited surcharge hike, a 3.9% increase in the National Living Wage and National Minimum Wage and a side-hustle trading allowance that goes from £1,000 to £3,000. Beyond the tax changes, there’s new money for regional growth too.

The Budget also introduces a Founders’ Relief, which is described as a 10% capital gains tax rate on lifetime gains of up to £10 million for qualifying founders.

Startups and scale-ups had wish lists of their own. In our pre-Budget comment piece, experts named capital gains tax, founder and investor reliefs, employer costs and funding for AI and R&D as the areas they most wanted to see covered. How far the Budget meets those is what’s weighed up next.

 

Which Founders The Budget Measures Reach

 

The rates relief is the most sector-specific measure. It applies to retail, hospitality and leisure, so its direct benefit depends on the sector a startup or scale-up operates in. The £6,000 increase in the threshold is aimed at businesses working from shops, venues and similar sites.

The tax rises fall on banks and on income from savings and property, which puts lenders, investors and anyone with savings or rental income on the receiving end. Meanwhile, holding the main rates of income tax, VAT and National Insurance means the headline costs of employing people and selling in the UK stay constant.

The Budget documents published on GOV.UK set aside £285 million for 2027–28 to support regional development. Of that, £165 million goes to mayoral Good Growth Funds and £120 million to incubator capital in areas moving towards devolution or strategic-authority status. Business rates are due to be retained locally by the end of the decade and mayors will receive a share of income tax from 2028, which moves more fiscal control to regional leaders.

The wage floor increase applies across age groups, and the Budget documents project day-to-day departmental spending more than £40 billion higher each year by 2028–29, with capital investment up £120 billion over the Parliament, both compared with the previous government’s spring 2024 plans.

We asked experts: now that the Autumn Budget has been announced, how far does it deliver what UK startups and scale-ups asked for?

 

 

Our Experts

 

• Jamie Crawford, Tax Partner, Dorsey & Whitney
• Liam Houghton, Co-Founder and CEO, Popsa
• Richard Baker, CEO and Founder, Tokenovate
• Denis Kaminskiy, Founder, Arcus Global
• Darren Burn, Founder, OutOfOffice.com and DoNotDisturb.com
• Andy Oury, Tax Partner, Oury Clark
• Dave Foreman, CEO, PXN Group
• Rich Pleeth, Co-Founder and CEO, Finmile
• Ash Gawthorp, CTO, Scale Factory
• Matt Rouif, CEO and Co-Founder, Photoroom
• Sarat Pediredla, Co-Founder and Operator, LevelFive
• Melissa Di Donato, CEO and Chair, Kyriba
• Rory Blundell, CEO, Gravitee
• Dr Anand Verma, Founder and CEO, ExpectAI
• Micha Kiener, CTO, Flowable
• John Ridd, Co-Founder and CEO, Greenpixie
• Scott Dawson, CEO, DECTA
• Anil Oncu, CEO, Bitpace
• Aman Thakran, Founder, BharatFare

 

 

Jamie Crawford, Tax Partner, Dorsey & Whitney

 

 

“The introduction of a 10% rate of CGT – capped at £10m of gains – for eligible founders disposing of a qualifying business after 6 April 2027 is a very welcome move that could encourage the next generation of successful British entrepreneurs and businesses.

“The priority through the upcoming consultation must be to ensure that the relief is as straightforward as possible. Otherwise, if its eligibility criteria are too tight or the rules overly complex, the Government risks creating another tax relief that looks good on paper but delivers little in practice.”

 

Liam Houghton, Co-Founder and CEO, Popsa

 

 

“The Chancellor has recognised the importance of rewarding entrepreneurial ambition, with a new Founders’ Relief offering a 10% capital gains tax rate on lifetime gains of up to £10 million. That is welcome recognition of the risks founders take to build businesses, create jobs and generate wealth in Britain.

“But the detail will determine how effective this is. The minimum turnover and employment thresholds, and growth and innovation tests could create significant hurdles. We need clarity on how these will be defined, which companies will qualify and whether eligibility depends on when a business was founded. The test is whether this genuinely encourages founders to build and reinvest in Britain.

“The commitment to cut £800 million in regulatory costs, alongside increased funding for the National Wealth Fund and British Business Bank, could help ambitious firms scale, although this only goes some way to offset the £5bn per year costs of the Employment Rights Act. Simplifying R&D reporting requirements from autumn 2027 is also welcome, although businesses need to see a meaningful reduction in administrative burden.

“The temporary increase in the bank surcharge may help fund energy bill support, but it reinforces the need for a predictable tax environment. Even time-limited changes can influence investment decisions.

“Overall, there are encouraging measures, but not yet a coherent growth strategy. Britain needs a more ambitious approach to innovation and AI, and a stable, competitive environment that gives founders compelling reasons to stay, invest and scale here.”

 

Richard Baker, CEO and Founder, Tokenovate

 

 

“The introduction of a new Founders’ Relief is a welcome step towards rewarding entrepreneurs who take risks, create jobs and build successful businesses in the UK. With global competition for investment and talent intensifying, giving founders greater incentives to scale and remain in the UK sends an important signal.

“The UK has established itself as a global fintech hub, yet there is a growing risk that we become an incubator for businesses that ultimately scale elsewhere. As the US and other markets compete to attract financial technology companies, the UK must strengthen its funding escalator to ensure the next generation of innovators can grow, access capital and eventually list here.

“As global financial markets undergo a major transformation driven by automation, tokenisation and digital settlement, homegrown fintechs have an opportunity to lead. We hope to see this announcement accompanied by better access to growth capital and greater regulatory certainty, ensuring the UK can become a global exporter of financial technology while giving the businesses developing it every reason to stay.”

 

Denis Kaminskiy, Founder, Arcus Global

 

 

“Founders’ relief sends a welcome message that Britain wants people to take risks, build businesses and stay here.

“Government should also back UK innovators by becoming their customer, so a new British Business classification should help. What’s missing is greater investment in councils’ capacity to deliver: devolving powers must come with funding for the systems, data and skills that turn devolution into better services up and down the country.”

 

Darren Burn, Founder, OutOfOffice.com and DoNotDisturb.com

 

 

“The Autumn Budget risks creating a two-tier system that overlooks the very businesses forming the backbone of the British economy.

“The Chancellor has introduced a generous new Founders’ Relief, allowing qualifying entrepreneurs to pay just 10% capital gains tax on up to £10 million of gains, while simultaneously halving the existing Business Asset Disposal Relief allowance to £500,000.

“Smaller business owners may still be adequately served by BADR, while founders of exceptionally high-growth businesses stand to benefit enormously. But what about the businesses in the middle?

“There are thousands of established, profitable, medium-sized British businesses generating millions in revenue, employing people, paying substantial taxes and contributing to their local economies. Yet their founders could be excluded from the more generous relief because they haven’t achieved arbitrary employee-growth targets or incurred £1.5 million in qualifying R&D expenditure.

“It’s particularly contradictory when businesses are being encouraged to embrace AI and technology to increase productivity, rather than simply grow their headcount.

“We should absolutely incentivise innovation and ambitious startups. But building a sustainable, profitable business over many years – and its associated tax payments – is also a considerable entrepreneurial achievement.

“The government risks rewarding businesses at either end of the spectrum while penalising successful, established businesses in the middle. That’s a strange message to send to the entrepreneurs who have spent years building Britain’s economic foundations.”

 

Andy Oury, Tax Partner, Oury Clark

 

 

“It’s great to see Mr Healey’s focus on the SME and founder community. He clearly understands the importance of this more than his predecessor. Today’s Budget package sends a clear signal that he believes in helping the startup world and improvements to EMI (the flagship share option scheme) and two Founder Reliefs sound promising. This was not a given, so we need to celebrate this today.

“However, it remains to be seen how the new Founder’s Relief will work in practice. 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. 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.

“It’s not so good news for the sole-trader today although great to hear them finally mentioned and support for the hospitality industry. Despite assurances that the Make Tax Digital Scheme wasn’t about bringing forward tax payments for this constituency, it seems that’s exactly what they will now face given the changes announced to the administration of self-assessment income tax. It’s been my fear that accelerated payments was always the grander design for MTD. That will be a one-off working capital transfer from the bank accounts of plumbers, cleaners and coders into the Exchequer, dressed up as helping people budget and avoiding larger tax bills that are harder to pay. But the transition will be brutal. It will mean roughly 18 months of tax squeezed into 12. This could be a solvency event for some.

“Another notable item in today’s announcement was more powers and funding to HMRC. With 60% of the £60bn tax gap being blamed on small businesses ‘non-compliance’ this likely means more enquiries they can’t understand or afford to get professional advice for. But the fact HMRC typically wins a lot more of their enquiries on small businesses follows that it’s hardly a surprise they want to focus on this cohort.

“So, despite the rhetoric, it’s actually a mixed bag for those not in the big corporate world. Assistance for some, but by no means all who run one-man-band businesses and larger SMEs.”

 

Dave Foreman, CEO, PXN Group

 

 

“Today’s Budget puts real weight behind growth beyond Westminster, and that’s great to see. New powers and funding for mayors, alongside a bigger British Business Bank, give founders and investors the kind of long-term commitment they can plan around. Scotland and the North are already producing companies that can compete globally, and getting equity into the hands of those founders should now be a priority.

“The new founders’ relief is exactly the right instinct. Every successful exit is a chance to fund the next generation of businesses, and keeping that capital circulating in the regions that produced it is how strong ecosystems are built. The new scale-up programme for women founders will help widen that pipeline too.”

 

Rich Pleeth, Co-Founder and CEO, Finmile

 

 

“I think it makes a useful start for AI companies, particularly the additional £60 million for the Sovereign AI Fund and its new focus on physical and industrial AI. That recognises that some of the opportunity sits in warehouses, transport and manufacturing, where a better decision has to turn into something happening in the real world.

“The £80 million expansion of the AI R&D procurement scheme matters too. A paying customer with a specific problem can be more useful to a young company than another invitation to demonstrate its technology. I’d want smaller suppliers to be able to compete without needing a team just to complete the application.

“The test is what happens after a pilot. If software helps a maintenance team plan work, the buyer should check whether fewer visits are wasted, including the time spent checking and correcting the system. Successful trials need a clear route to an ongoing contract.

“I’m encouraged by the direction, but founders still need predictable decisions and payment dates to hire and plan. I’d rather see deployments that buyers keep paying for than a long list of trials nobody takes forward.”

 

Ash Gawthorp, CTO, Scale Factory

 

 

“Half a billion pounds for AI safety and security sounds impressive, but announcing funding is the easy part. The harder question after today’s Budget is whether Britain can build and operate the systems that money buys, particularly in defence and biosecurity.

“The British data centre covenant acknowledges a real constraint. Faster grid connections and on-site generation might help projects move forward, but they will not make wider power infrastructure problems disappear. A major AI data centre project in Essex has already lost its anchor customer after grid delays pushed its expected connection into the 2030s. Keeping sensitive NHS and defence data in Britain will require dependable electricity infrastructure.

“There is also an uncomfortable question around sovereignty. The Budget backs British AI companies, while the new biosecurity lab is set to benefit from up to £200 million in model credits from OpenAI and Anthropic. It makes sense to use leading models, but we should be clear about what we own and what we rent. Who controls the models, under whose jurisdiction does sensitive data sit and can a critical service keep running if commercial terms or geopolitics change? Britain could spend heavily building a capability it depends on, only to find someone else ultimately controls whether it can continue using it.

“Expanding challenge-led procurement is sensible, but departments still need people who can distinguish a capable supplier from a confident sales pitch. Buying AI does not mean being able to run it. A system can detect a cyber threat in seconds, but someone still has to verify the alert, decide what to do and stand behind the consequences. In biosecurity, a timely warning is worth little if the institution around it cannot act quickly. Investment in the new NCSC AI Cyber Security Centre of Excellence in Manchester and the Union Learning Fund is encouraging, provided they help develop people who can challenge these systems rather than simply press the buttons.

“None of this is an argument against the investment. The Chancellor has identified several of the right problems, but government must now build the capacity to use what the money buys.”

 

Matt Rouif, CEO and Co-Founder, Photoroom

 

 

“Raising business rates relief for smaller retailers is a welcome step, and the additional investment in British businesses and AI infrastructure sends an encouraging signal to entrepreneurs. The new support for founders could also help more ambitious companies grow and remain in Britain. But investment alone will not protect jobs or guarantee growth if smaller businesses lack the skills to benefit from new technology.

“Britain has already committed more than £1 billion to AI computing capacity and £30 million to local adoption. The Chancellor must now go further on practical AI upskilling, helping independent retailers reduce operating costs and giving growing businesses the confidence to invest. Britain’s AI ambitions should ultimately be judged by the businesses that succeed here, the jobs they create and the productivity gains they deliver.”

Sarat Pediredla, Co-Founder and Operator, LevelFive
sarat-pediredla-co-founder-and-operator-levelfive

“I welcome and commend the infrastructure investment; it’s critical. But the real productivity gains and GDP growth will come from applied AI and businesses really using it, and adoption is a better measure of that.

“Mid-sized firms get stuck on skills, access to talent and capability, and on understanding what’s possible without the hype. I’d like to see an incentive to invest in AI in real workflows, perhaps by including it in R&D tax credits.”

 

Melissa Di Donato, CEO and Chair, Kyriba

 

 

“Today’s Budget gets a lot right on AI, backing British talent and taking the challenge of adoption seriously. But businesses are crying out for more practical help to use AI well, to build the skills and confidence to apply it in the real world. The bigger opportunity is not just to make existing processes quicker, but to rethink how businesses work. That’s when we’ll start to realise the productivity gains the UK is desperate to see.

“The new local AI partnerships are a good start, and I’d like to see that support grow. In finance, the companies getting real value from AI are the ones that have trained their people properly, thought hard about where AI can change the way they work and been clear about which decisions still need human judgement and sign-off.”

 

Rory Blundell, CEO, Gravitee

 

 

“In today’s Budget, the Chancellor was right to put AI adoption at the heart of the Budget and recognise the importance of secure, sovereign AI. The UK has a golden opportunity to take the lead and show that rules don’t have to stifle innovation, but that they can create the environment for prosperity.

“But these investment pledges alone won’t enable Britain to achieve the growth promised by AI. Growth requires widespread adoption. This can only come with trust, and trust requires accountability.

“The Government’s Budget showed a focus on building UK capability, rather than the confidence of UK businesses. Without establishing confidence that AI can be controlled, that it is safe to use, and that risks have been mitigated, even the most ambitious investment in AI will struggle to translate into real productivity gains and business growth.

“We need to get serious about investing in the governance and security frameworks which allow businesses to deploy AI agents securely at scale. Without this, we risk investing in the technology without creating the conditions for businesses to actually use it, limiting the productivity and growth it could unlock.”

 

Dr Anand Verma, Founder and CEO, ExpectAI

 

 

“A nation that leads on AI security should also lead on putting AI to work. There was nothing today rewarding the use of AI in small businesses to run operations.

“AI can give a 10-person team the reach of a firm 10 times its size. That’s how SMEs compete, grow and create jobs. The Budget protects the technology, not its use.”

 

Micha Kiener, CTO, Flowable

 

 

“The government’s investment in its cyber security defences is welcome, but some of these measures will take years to fully roll out. And while the country prepares its defences against external threats, rogue AI agents could already be operating inside British businesses.

“We keep seeing how agents can act in unexpected and problematic ways when they’re given autonomy without the right context and controls. Businesses have to consider the risks to their own operations and the wider consequences for society and the economy as they give agents more autonomy.

“The government can invest in protecting the country, but businesses have to take responsibility for the agents they deploy in the meantime. That means ensuring agents have the context they need to make decisions, operate within clearly defined boundaries and follow rules built into the work they carry out, rather than relying on agents or LLM companies to police their own behaviour.”

 

John Ridd, Co-Founder and CEO, Greenpixie

 

 

“The Chancellor’s Data Centre Covenant is a smokescreen designed to appease local resistance to AI infrastructure. The Government is fully aware that data centres will be a major political battleground at the next election – as they have become in the US – and has acted to get ahead of rising opposition.

“What Healey claimed are new requirements for data centre developers on local jobs and renewable energy creation already exist, but Big Tech is never held accountable and I don’t see that changing with this. The average data centre employs fewer people than a local supermarket.

“In truth, the sustainability agenda is being overwhelmed and ignored. The Government needs to recognise the fact that almost a third of cloud use is entirely wasted. AI is exacerbating the issue. Eliminating these ‘zombie’ resources could easily increase data centre capacity, but only if Government policy gets to the heart of the issue.

“Fuelled by AI, enormous growth in data centre usage necessitates enormous growth in infrastructure and the electricity needed to power it. It is not in the interests of data centre builders or hyperscalers to reverse an ‘always on’ culture to cloud services, so the Government needs to mandate efficiency across the board to ensure power and water resources are used responsibly by all.

“There is an opportunity here to consider all valid concerns – businesses seeking growth and the local communities affected – and Healey’s Data Centre Covenant is a start. The Government needs to increase capacity via increased efficiency, not just be railroaded into building more data centres.”

 

Scott Dawson, CEO, DECTA

 

 

“I can see why the Chancellor might be tempted to ask banks to pay more tax. They’re making healthy profits at a time when the Government is struggling to balance the books. I don’t have a particular problem with that, although I’d be interested to see how much money it actually raises.

“What concerns me is how the banks might respond. I’ve spent more than 20 years in payments, and I think smaller businesses have been getting a pretty poor deal for some time. They’re often too big for the basic services on offer but not big enough to get the attention that larger companies receive. It’s something we hear about when speaking to merchants, and I don’t want to see it get any worse.

“We recently surveyed 500 UK SME ecommerce decision-makers, and 40.8% told us they expect to raise their prices over the next three years. That’s a lot of businesses expecting to ask their customers to pay more. Imagine having to do that while also finding your borrowing has become more expensive, or your bank is less interested in lending to you.

“I’d like to see the Chancellor give some thought to the smaller businesses relying on these services before deciding how much more to tax the banks. And I’d like to see more competition from challenger lenders and payment providers, because there are plenty of businesses out there who could do with better options than they’ve currently got.”

 

Anil Oncu, CEO, Bitpace

 

 

“A higher bank corporation tax surcharge threatens to increase operational and transaction costs that commercial banks pass down to customers. 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. Businesses trading internationally will be wary of these additional costs across cross-border payment corridors and correspondent banking networks.

“The Government’s priority should be accelerating regulatory frameworks for next-generation payment rails and digital settlement, giving businesses the competitive advantage to transact globally without being tied to high legacy banking charges.

“For businesses, the next step is to explore alternative, cross-border settlement rails to protect margins. Success should be measured by lower total payment processing costs and unnecessary intermediary fees. Blockchain-powered rails settle cross-border transactions in seconds at a fraction of the cost, making legacy banking friction an optional tax businesses no longer need to pay.”

 

Aman Thakran, Founder, BharatFare

 

 

“For a small online travel business, this Budget was more about what didn’t happen than what did. Holding the main rates of income tax, VAT and National Insurance matters most to us: after last year’s employer NI rise, another increase would have decided whether we hire our next customer-support person in Plymouth or keep doing it ourselves.

“What it didn’t do is help with the costs that actually shape our customers’ decisions. Air Passenger Duty is already £102 per adult on an economy ticket to India and goes up again next April. For the British Indian families we book, that tax is often bigger than our whole margin on the booking. A freeze would have been a real signal to the travel sector.

“The rates relief rise for retail, hospitality and leisure is welcome for those sectors, but online businesses like ours sit outside it. What founders like me would still like to see is simpler support for small firms adopting AI and automation: we built our own fare-checking and customer tools on a bootstrapped budget, and a straightforward allowance for that kind of investment would go further than headline schemes most micro-businesses never use.”