Autumn Budget 2026: What the Chancellor’s First Budget Means for Businesses in East Sussex

Chancellor John Healey delivered his first Budget with the discipline you might expect of a former Defence Secretary. The speech was prepared under tight security, there were no leaks in the run-up and, when the measures finally emerged, there were few surprises either.

Mr Healey stepped into the role unexpectedly in July. Working with a close team of economic and business advisers, he built the Budget around Prime Minister Andy Burnham's economic vision: more power devolved away from Whitehall, support for households struggling with the cost of living, and incentives for businesses to set up and stay in the UK.

The backdrop gave him little room to manoeuvre. The Office for Budget Responsibility (OBR) confirmed weaker than expected growth forecasts of 1.2% this year, 1.1% next year and 1.6% in 2028. Inflation stands at 3.5%, government borrowing has reached a record £3 trillion and the cost of that borrowing is at levels not seen for decades. Pointing to the economic storms caused by the ongoing invasion of Ukraine and the war in the Middle East, the Chancellor stressed the need for fiscal discipline. The result was not one big gesture but a raft of smaller measures, with winners and losers across the economy.

For business owners in Eastbourne, Bexhill-on-Sea, Hastings and across East Sussex, several of those measures deserve a closer look. Here is our summary of the announcements that matter most.

Where was the Budget aimed?

The biggest announcements were directed at business. The Chancellor put the emphasis on investment, on backing a new generation of wealth creators, on boosting the construction sector and on new initiatives to expand the UK's artificial intelligence and national defence industries. Energy costs, for households and businesses alike, were also high on the list, alongside support for renewable energy.

The quieter run-up was welcome after the disruption of last year. But while the speech concentrated on the benefits, the small print contains some tough implications for business, which we explore below.

Founders' Relief: a new incentive for high-growth start-ups

If you are building a business with ambitions to scale, the headline measure is a new Founders' Relief. From 6 April 2027, qualifying founders will pay a reduced 10% rate of capital gains tax on up to £10 million of lifetime gains. The relief is designed to encourage high-growth start-ups to establish themselves in the UK and stay here, and it sits alongside targeted support for women-owned scale-up businesses.

How a company is structured from day one will affect how a future sale is treated, so founders should take advice early. Our business sales, acquisitions and mergers team can help you plan with an eventual exit in mind.

Business Asset Disposal Relief is being cut: what it means if you plan to sell

The flip side of Founders' Relief is a significant change for established owners. From April 2027, the lifetime limit for capital gains eligible for Business Asset Disposal Relief (BADR) will be halved from £1 million to £500,000.

The Chancellor says that 75% of claimants will still receive relief on their entire gain. Even so, this is another important shift in the transition and succession cycle of business. If you were already weighing up a sale, a management buyout or handing the business on to the next generation, the timing of that decision has just become more important. Our recent article on succession planning for business and agricultural assets looks at the wider picture for family businesses.

Business rates relief for pubs, clubs and live music venues

There was better news for the hospitality and leisure businesses that are such a feature of the East Sussex coast. From 1 April 2027, high street pubs, social clubs and live music venues will see their business rates relief increased from 20% to 35%. The small business rates relief threshold will also be extended to £18,000. The cost of these measures will be met by gambling and vape shops.

Rates are only one part of the cost of occupying premises. If you are taking on a new lease, renewing an existing one or buying a commercial property unit, our commercial property solicitors can help you understand the full financial picture.

Wages, allowances and tax: the numbers to plan for

Several measures will show up directly in your cash flow:

• The National Minimum Wage and National Living Wage will rise by 3.9% from next April, so employers will need to find extra cash to cover payroll.
• The main rate of writing down allowances will be cut by 2% to 12% from April 2027, although first year allowances for new investment will rise from 40% to 50% from January 2027, which rewards businesses that invest sooner rather than later.
• Online retailers will be required to collect VAT from UK sellers whose businesses make more than £90,000 of sales through their marketplace.
• HMRC will receive new powers to collect unpaid taxes.
• The banking sector will support the wider economy through a temporary increase in the Bank Corporation Tax surcharge to 6% from 1 January 2027 to 31 March 2028, returning to 3% from 1 April 2028.

Wage increases often prompt a review of contracts, hours and working patterns. If that applies to you, our employment law solicitors can make sure any changes are handled correctly.

Landlords: higher income tax on property income

Landlords will feel the Budget too. For 2027/28, the rates of income tax applied to property income will increase by 2%, taking the property basic rate to 24% and the higher rate to 44%. The property additional rate will be 49%.

For anyone with a buy-to-let portfolio or a holiday let, this follows a period of considerable regulatory change. Our article on the new rules for holiday lets is a useful starting point if you are reviewing whether your investment still stacks up.

Public procurement, skills and the push on AI and defence

Opportunities may lie ahead for businesses willing to work with the public sector. The government will use strategic public procurement to back British firms, and a new definition of what it means to be a UK supplier is expected shortly. It is intended to overcome the broad definitions that have allowed companies with no real base here to be classed as UK firms.

The movement of skilled labour will be encouraged through additional visas and through a restriction on non-compete clauses when employees move on, a change employers will want to factor into their commercial contracts and employment agreements.

The ambition to make the UK a global leader in artificial intelligence was reinforced with an additional £80 million for Sovereign AI's R&D Procurement Scheme, creating more opportunities for innovative companies to work directly on AI solutions for the health and care system, AI security and safe adoption. On defence, next year's spending review will set out how the government will meet its NATO commitment of spending 3.5% of GDP on defence by 2035, with a target of 3% in 2030.

Businesses operating in the AI and defence sectors should be assessing their readiness to pitch for government contracts or to form industry partnerships. Aligning with these strategic areas could unlock future growth and resilience. Corporate governance, sustainability targets and supply chain scrutiny all help to prepare a company for the rigours of public procurement.

Energy costs and the Energy Wealth Fund

Tackling energy costs for households and businesses was a high priority. From April next year, more than 10,000 eligible manufacturers will receive support to cut their electricity bills and bring their costs closer to those of competitors in other European economies. A £2 billion Energy Wealth Fund will invest in renewable and low-carbon energy infrastructure across the UK to support the low-carbon economy, and the 2027 spending review will set targets designed to drive energy bills down over the next ten years.

Devolution, fuel duty and the other announcements

In a major step towards the Prime Minister's devolution ambitions, the Chancellor set out a roadmap to future fiscal devolution, describing it as 'the biggest transfer of power and resources out of Whitehall in a generation'. It will include regional funding to prioritise investment in local growth and regeneration projects.

Elsewhere, Advance Corporation Tax will be repealed from 1 April 2031, the 5p cut in fuel duty has been extended to July 2027, and there are new mileage rates for employees and self-employed people who use their own vehicles for work, with a permanent increase in the tax-free rate to 55p per mile for the first 10,000 business miles for cars and vans.

The full Budget speech and the supporting Budget documents are available on GOV.UK.

Planning your next move after the Budget? Speak to our corporate and commercial solicitors in Eastbourne, Bexhill-on-Sea and Hastings

Whether you are weighing up a sale before the Business Asset Disposal Relief changes take effect, structuring a new venture with Founders' Relief in mind, or reviewing leases, contracts and employment terms in light of rising costs, our team can help you plan with confidence. Call us on 01323 644222, email enquiries@stephenrimmer.com or book a free initial 30-minute consultation.

FAQs: Autumn Budget 2026 and your business

When does the cut to Business Asset Disposal Relief take effect?

The lifetime limit for qualifying gains falls from £1 million to £500,000 from April 2027. The Chancellor expects 75% of claimants to still receive relief on their entire gain.

What is Founders' Relief?

A new relief aimed at high-growth start-ups. From 6 April 2027 it offers a reduced 10% capital gains tax rate on up to £10 million of lifetime gains, alongside targeted support for women-owned scale-up businesses.

Are income tax rates on rental income going up?

Yes. For 2027/28 the rates applied to property income rise by 2%, to 24% at the basic rate, 44% at the higher rate and 49% at the additional rate.

When do the business rates changes for pubs and venues start?

From 1 April 2027, relief for high street pubs, social clubs and live music venues rises from 20% to 35%, and the small business rates relief threshold is extended to £18,000.

This article is for general information only and does not constitute legal advice. Please contact us for advice on your specific circumstances.