The long-awaited UK Autumn budget was announced yesterday, Wednesday 30 October, and it brought with it both anticipated changes as well as a few unexpected introductions.
From its effect on the cost of living, NHS contributions and housing prices – things that influence the lives of everybody – to factors like government borrowing limits and Capital Gains Tax that have a direct effect on a (relatively) small few, there’s no doubt about the fact that Labour’s Autumn budget has stirred some real mixed feelings among the British population.
The Autumn Budget: At a Glance
So, what exactly has been announced in the Autumn budget? Here’s a quick snapshot of the main changes that have been made to the UK budget:
- National Insurance: Employers’ contributions to national insurance will increase by 1.2 percentage points to 15% from April 2025, while employees won’t have a direct increase.
- Income Tax: There will be an increase in personal tax thresholds on income and insurance tax in line with inflation from 2028 to 2029.
- NHS: New 10-year plan for the NHS which includes a £22.6bn increase in the day-to-day health budget and £3.1bn increase in the capital budget.
- Housing: Government will spend £5bn on housing investment in 2025-26. Including reduced right-to-buy discounts, and local governments will retain the earnings from council housing sales to allow them to reinvest.
- Minimum Wage: Increased national living wage by 6.7% to £12.21, equivalent to £1,400 a year for an eligible full-time worker.
- Increased CGT: Increased Capital Gains Tax (CGT), as antipiated (but not by quite as much). The lower rate will be raised from 10% to 18%, and the higher rate from 20% to 24%.
- Business Tax: Permanently lower business rates for retail, hospitality and leisure businesses from 2026-27. Until then, they’ll receive 40% relief on business rates up to a cap of £110,000.
Of course, this doesn’t include changes in things like transport, private school fees and more, but these are the most important amendments that’ll directly affect businesses and business owners.
How Will UK Budget Changes Influence Businesses?
The most significant concern of business owners in the UK was centred on expected increases in Captial Gains Tax (CGT). Although it hasn’t gone up quite as high as some had feared, the increase is still poignant and is, no doubt, going to have a very real impact on businesses, business owners and in the long term, the UK economy as a whole.
Not only does it directly affect how much wealthy business owners will have to pay in taxes when they sell their companies, but this will have a massive influence on the UK’s ability to attract entrepreneurs and investors to found companies in the UK in the first place.
Entrepreneurs and business owners need incentive to select a particular location in which to launch a company. These days, with so many good options in terms of countries with positive regulatory environments, low taxes and great living conditions, competition between different locations is amping up.
So, why does it seem like the Labour Party isn’t interested in playing the game? Expectations and predictions set by business experts and company owners themselves project a great deal of unhappiness as a result of the lack of support from government and their regulations. With growing feelings of discontent and skepticism surrounding what the UK can offer businesses in the future, many people believe that the country is about to face some very serious consequences for its actions.
A Possible Mass-Exodus?
Considering the position in which they feel they’ve been put, many business owners feel as if they have little choice but to relocate to other parts of the world. While the economic landscape has already been competitive from one country to the next, many feel like this budget reform comes as a final push from the UK government that’ll result in companies looking for greener pastures.
Indeed, the bad news for the UK government is that businesses are spoilt for choice. From Dubai and the other parts of the United Arab Emirates (UAE) to interesting locations like the Irish West Coast and the United States (US), there are plenty of locations around the world that are specifically committed to providing businesses with conditions that are conducive to ruing successful, profitable businesses.
So, what’s stopping UK-based companies from cutting their losses and starting fresh somewhere abroad?
What Do Experts Have to Say?
Not much, according to some experts! However, others disagree, asserting that while the budget changes in the UK are not necessarily good for business, the country still has a lot to offer companies in other regards, including national infrastructure, national healthcare, a high standard of living and more.
The problem, however, is that the UK isn’t the only place in the world that can offer these things. So, the question becomes, what’s stopping businesses from moving to other countries that offer better conditions in terms of CGT and more and also have a great standard of living, excellent healthcare and more?
Most of the experts we’ve spoken to feel fairly disheartened by the Autumn budget changes and what this means for business, and there’s a particularly high level of concern over companies in expert industries like tech. While not everybody thinks that businesses will immediately flood out of the country and take up residence in Dubai and the US, he overwhelming feeling does seem to be that we ought to expect a great deal of relocation.
Our Experts
- Gilbert Verdian: Founder and CEO at Quant
- Olga Nechita: Director at Fragomen
- Mark Pearson: Founder of Fuel Ventures
- Sabby Gill: CEO of Dext
- Andrew Insley: CFO of Advania UK
- Mark Bowling: CISO at ExtraHop
- Gareth Morgan: Co-Founder at Balance Agency
- Hristo Borisov: CEO and Co-Founder of Payhawk
- Michael Queenan: CEO of Nephos
- Cordelia Meacher: Founder and Managing Director at FieldHouse Associates
- Tim Mills: Managing Partner at ACF Investors
- Royden Greaves: CEO and Founder at Jarvis
- Edgar Randall: Managing Director at Dun & Bradstreet
- Sina Azeri: Founder and CEO of Transform Gaming
- Russell Crampin: Managing Director at Axians UK
- Nadia Kadhim: CEO at Naq
- Abdullah Mutawi: Partner in Dubai at Taylor Wessing
- Forbes McKenzie: Founder and CEO of McKenzie Intelligence Services
- William Jones: Country Head Middle East at Malt
Gilbert Verdian, Founder and CEO at Quant
“The imagined ‘mass entrepreneur exodus’ makes for a good headline, but it is more rhetoric than reality. There are many, many more of us entrepreneurs who are committed to staying put and paying our fair share. Nowhere else can match London when it comes to talent, capital raising, and stable regulation. These advantages have been built up over centuries of competitiveness and innovation and – regardless of tax tweaks – are here to stay.
“It may be painful in the short-term, but this is the budget we need to have. We need to remember that in the long run, this will increase government investment in large infrastructure projects and public services, boosting the health of the whole economy. Ultimately, the Budget can be seen as a catalyst for future growth.”
Olga Nechita, Director at Fragomen
“Many Brits might feel that their contribution to the UK economy is being overlooked and are seeking more welcoming environments abroad.
Countries like the UAE, Italy, Malta, and Spain have all positioned themselves as prime destinations, offering a compelling blend of tax incentives and attractive immigration programs.
UAE’s Golden visa has seen a tenfold increase in interest from non-doms, providing a 10-year renewable residence with opportunities to invest in real estate.
Despite its intention to end the property investment option, Spain’s Golden Visa also stands out as a beacon for the non-doms, offering rapid immigration processes.
And as the last remaining citizenship-by-investment option in Europe, Malta’s appeal has surged once again among non-doms seeking to secure freedom of movement. Despite pressures from the European Commission, the programme remains highly attractive – especially while it lasts.”
Mark Pearson, Founder of Fuel Ventures
“The decision to dismantle this critical tax relief is purely anti-entrepreneurship and could deal a devastating blow to the UK’s startup ecosystem, stifling the next generation of entrepreneurs who are the backbone of innovation, job creation, and economic resilience in our country.
Business Asset Disposal Relief was specifically crafted to reward and support individuals who risk their livelihoods to build something meaningful, knowing that they have a chance to see the fruits of their labour fairly rewarded…This move will not only reduce entrepreneurial efforts but will also send a troubling signal to both homegrown and international investors who see the UK as a hub for innovative ventures.
Removing this relief sends a clear message that our government no longer values the unique contributions of those who create the jobs, pay the taxes, and drive the innovations that propel our economy forward – instead, they’d rather kill the start-up economy.
Mark adds, “This decision will have ramifications specifically in the tech sector, sending talent and start-ups to European nations who foster a better relationship with entrepreneurs as a whole.”
Sabby Gill, CEO of Dext
“By presenting both support and challenges for small businesses, this Autumn Budget has presented a robbing Peter to pay Paul scenario for the UK’s SMB community. The 1.2% increase in employer National Insurance contributions, alongside a reduced contribution threshold of £5,000, will certainly put pressure on smaller firms with already tight margins. Adjusting the threshold based on business size or revenue would have been a helpful consideration.
While the Capital Gains Tax increase to 24% was less severe than expected, small businesses will be hit and need to plan accordingly, especially those involved in business asset disposal or succession. The boost in Employment Allowance to £10,500 will be a welcome offset to this, meaning that over a million small businesses will see minimal or no change to their National Insurance bills. However, although the continuation of business rates relief for retail, hospitality and leisure properties is beneficial, the reduced level of support may be disappointing to some businesses that were relying on the previously higher rate.
One of the more encouraging aspects is the commitment to ‘levelling up’ beyond the North and South divide, with welcome increased activity outside of London. Small businesses across the entire UK will benefit from broader, more equitable support measures, which is essential for creating a balanced, resilient economy nationwide.
Yesterday’s Budget was as painful as promised, and it’s clear that more could continue to change in the future which would impact small businesses. To navigate this, scenario planning is key to adjust to the rising costs and leverage available support. Accurate, up-to-date financial data will be key, allowing businesses to make agile decisions in real-time. As firms navigate these shifts, leaning on digital tools and expert advice will help them remain resilient, focused, and prepared for growth.”
Andrew Insley, CFO of Advania UK
“Increased Employer National Insurance (NI) contributions is a mixed bag. It will have a big impact on us as we employ 1,600 staff in the UK. We recognise our duty to hire and nurture young tech talent as we grow the business. Taxing these job roles more, does not support this aim.
However, this does provide a much-needed sense of certainty that UK businesses have been craving. Unfortunately, it’s likely to hinder investment and economic growth for the UK economy due to increased costs. Still, this newfound certainty will empower long-awaited decisions from our clients on investments in areas like infrastructure, AI, and computing, which UK businesses have hesitated to pursue due to the uncertainty of the last 15 months.”
Mark Bowling, CISO at ExtraHop
“The cybersecurity skills gap is a growing concern that organisations can’t afford to ignore. There’s a widening gap between the number of skilled professionals available and the demand for them, driven by the increasing complexity and volume of cyber threats. Part of the problem lies in how quickly technology and cyber risks evolve, outpacing the development of talent in the field. On top of that, cybersecurity as a career can still seem too technical or inaccessible to many, which limits the talent pool even further.
Budget issues also come into play, with CISOs often finding it difficult to secure enough funding to invest in the people and tools needed to maintain strong security practices. The key for CISOs is to present cybersecurity as an investment in the company’s long-term stability, rather than as an expense. By focusing on how breaches and vulnerabilities could impact the bottom line, they can make a stronger case for why hiring more talent and investing in security is crucial.
Addressing the cybersecurity skills gap requires more than just hiring externally, it calls for better communication at the executive level, smart budget allocation, and a commitment to fostering internal talent. It’s a tough challenge, but with the right approach, it’s possible to make meaningful progress.”
Gareth Morgan, Co-Founder at Balance Agency
“Extending the freeze on income tax thresholds is effectively an indirect tax rise that hits both businesses and employees as wages increase. In our industry, where competition for skilled talent is high, our agency, Balance, is often pushed to raise salaries just to retain talented staff, even as other costs are increasing.
A freeze like this tightens margins and reduces our ability to reinvest in growth, innovation, and the very staff we rely on to compete. The government must recognise the long-term impact on SMEs like ours.
Talent in the UK wouldn’t be unwise to relocate because of actions like this. Countries such as the UAE offer tax-free income, while the US has regions with low-income tax, which is more attractive than what the UK can offer.”
Hristo Borisov, CEO and Co-Founder of Payhawk
“Taxing UK-based employees’ equity packages as regular income effectively eliminates any incentive to equity-based compensation—a crucial lever for startups trying to attract and retain top talent. Ultimately, this could lead to a ‘brain drain’ as skilled workers seek opportunities in more favourable environments.
Given the UK continues to feel the ramifications of Brexit and top talent remains hard to find, the rumoured policy will only exacerbate an existing problem. Additionally, reports of cutting Business Asset Disposal Relief effectively say the Government no longer acknowledges the personal and financial risks founders take when establishing and growing a business.
All this when the UK is home to some of the biggest and best fintechs in the world, many of whom are on the cusp of an IPO.
The UK is a fintech leader – it’s one of the many reasons Payhawk chose it as its headquarters.
Unless policy makers rethink how they can best support innovators, the UK not only risks its place as a destination for start-ups, it risks the fintech crown it wears.”
Michael Queenan, CEO of Nephos
“There is no longer incentive for entrepreneurs to start a business in the UK. In today’s globalised world, we’re competing with wealthy countries like Dubai, who are offering 0% corporation tax, 0% income tax, and 0% capital gains tax.
Why would you start a business in the UK if your hard work is going to be worth less when you want to take the value from it? Where is the incentive to take the risk? And then your family gets hit by more taxation when you pass it to them? This budget is killing ambition and chasing out the few entrepreneurs that are left in the UK.”
Cordelia Meacher, Founder and Managing Director at FieldHouse Associates
“Sadly, this Budget demonstrates a complete lack of understanding from the Government about the extent to which business owners and entrepreneurs support and drive forward the British economy.
With reliefs removed and taxes raised, smaller businesses have been targeted from almost every direction. Conditions for existing businesses have been made immediately more challenging, and this will directly impact “working people”, who may well now not get the pay rise, bonus, or benefits they were hoping for from their jobs.
We need to incentivise people to start their own businesses, to employ people and contribute, not turn them off so badly that they actually consider leaving the country. Many founders and investors I know are looking seriously at the US, Italy, or Dubai. It’s all very depressing, and runs in contradiction to the Government’s apparent agenda for “growth”. How can we grow when business is stifled and our talent is heading elsewhere?”
Tim Mills, Managing Partner, ACF Investors
“There are many reasons why the UK is well-placed to drive world-leading innovation, from our universities to our legal system. These huge strengths remain following the budget, but with governments across the world competing to attract the best talent, our government must assess its priorities to ensure entrepreneurs are incentivised to stay in the UK and build their companies here.”
Royden Greaves, CEO and Founder at Jarvis
“Scrapping Business Asset Disposal Relief will be damaging to the UK startup ecosystem. Schemes like these encourage people to take calculated risks, which drives innovation. Removing these incentives seems like a short-term solution when every government should be thinking long-term. We won’t see the immediate impact but in a decade, we may find fewer entrepreneurs entering the ecosystem — and will face an even longer path back to a growth economy.
“Innovation must remain at the forefront of the government’s agenda if the UK is to maintain its status as a global tech leader. Our strength lies in our access to top talent, world-class universities, and bold entrepreneurs. If we start to stifle that belief by changing policy, we will stifle the fabric of long-term economic growth.”
Edgar Randall, Managing Director at Dun & Bradstreet
“While concerns loom that an increase in Capital Gains Tax might affect the attractiveness of the UK as a base for future entrepreneurs, but business decisions are influenced by more than just fiscal policy. For the UK to remain competitive and continue attracting innovation-focused industries – especially in fields like Tech and AI – we must weigh the cumulative effect of policies impacting growth, including energy costs, employer NI contributions, and tax structures on capital gains and dividends.
Positively, our Q4 Global Business Optimism Insight report reflects a 13% rise in business optimism in the UK as inflation eases and borrowing becomes more favourable, which should help offset some concerns. If Capital Gains Tax adjustments are accompanied by policies that incentivise capital investment and D&D we can foster an environment that supports innovation without stifling long-term growth.
Ultimately, businesses are about people, and they want to be based where they feel supported and empowered to grow. To protect the UK’s appeal as a business hub, it is critical that policies on tax encourage innovation and incentivise entrepreneurship.”
Sina Azeri, Founder and CEO of Transform Gaming
“Entrepreneurs who embark on a journey to start a business from scratch are primarily motivated by two things: their passion and desire for equity. The decision on where to establish a business is shaped by factors including access to inclusive capital markets, the availability of skilled talent and beneficial capital gains tax regulations.
In our ever-more global world, entrepreneurs have the flexibility to establish their businesses in any major financial or tech hub, with the option to operate remotely across borders. Historically, London has been one such global hub, however a rough treatment of capital gains for entrepreneurs – such as the lack of relief and increased tax rates – will certainly push entrepreneurs to consider relocating their businesses elsewhere.
Personally, I am considering moving both my business and tax residence to somewhere more attractive and accommodating to business owners”
Russell Crampin, Managing Director at Axians UK
“Many employees of the tech industry can easily work from home, and therefore work for international companies without physically relocating. Unfortunately, this means the UK business talent pool reduces at a time when we’re being asked to drive growth.
Other impacts on increased costs is that it puts pressure on developing younger talent, which is critical for any growing business.
These combined issues with the threat and opportunity from AI will be an explosive combination.”
Abdullah Mutawi, Partner in Dubai at Taylor Wessing
“Extensive speculation around tax changes creates uncertainty for founders and businesses. While moving an existing business from UK to UAE is not frictionless, we are seeing a significant trend of founders doing just that with slightly higher numbers among those starting up new ventures and using UAE as a platform from the get-go.
But we have also seen a number of companies ‘flipping’ existing corporate structures and operations to the UAE for a number of factors which make the UAE is extremely attractive, including lifestyle, flexible workforce, ease of obtaining visa, great business opportunities, and an increasingly sophisticated VC infrastructure.”
Nadia Kadhim, CEO at Naq
“Although the UK budget sees more money for digital technologies in the NHS, it also brings additional pressures on tech companies within the healthcare sector. The vast majority of digital health companies in the UK are SMEs.
I am concerned any rise in national insurance will hit the sector, delaying hiring, and in turn slowing time to market for new life-changing technologies. There is already a movement towards the US for digital health companies as they face fewer compliance hurdles in this market than the UK, making it harder to hire talent may lead to a shift towards the US for talent and companies.”
Benjamin Lister, Private Client Partner in London at Taylor Wessing
“The UK has a fantastic pool of talent and infrastructure and access to capital so it is not a given that people will move, at least overnight. Tax is by no means the only consideration as to why a business would or would not be in the UK, but it’s a key one. It’s also notoriously difficult to move business and operations wholesale from one country to another.
But the UAE is becoming an increasingly favourable jurisdiction in view of the enormous sense of opportunity and ease of doing business there, as well as favourable corporate tax rates and absence of personal income tax.”
Forbes McKenzie: Founder and CEO of McKenzie Intelligence Services
“If taxes like CGT go up as expected, tech entrepreneurs will absolutely relocate. Schemes like the EIS are set up to encourage entrepreneurs to found and sell successful SMEs to larger stakeholders, generating more funds – through both tax and employment – for the country. However, each percentage increase in capital gains tax sees the government claiming a larger slice of the investment-exit pie, leaving private shareholders with much lower returns.
With less tax revenue to benefit from, business owners are less likely to sell up or even start out, with higher CGT essentially making shares less attractive to investors now net gains are diminished. Startup valuations will drop, making it challenging to attract new investment to fund growth, as the government assumes a kind of shared ownership through its indirect claim on each business. It’s a shift that will ultimately deter the high-value startups and innovative small businesses our economy relies on.
As for the increase in National Insurance (NI) for employers, businesses will likely pass the added costs onto their customers, impacting those the government claims to protect. This, in turn, undermines the idea that the budget doesn’t affect workers – because it does. By sustaining inflation, this policy will only keep interest rates high, placing greater pressure on things like household mortgages. Rather than supporting economic recovery, then, these measures risk stifling growth, deterring innovation and complicating investment.”
“There are plenty of business-friendly places that would welcome a mass influx of tech talent from the UK’s shores. Most governments recognise that a strong technology base is an economic differentiator, and Paris, Berlin, Zurich, or Geneva, will be standing ready with open arms if the government hamstrings our tech industry with further taxes. Let’s not forget you can get to New York in just five hours, and Ireland, who benefitted hugely from the .com revolution by cutting their taxes, is just an hour. Given they have no language barrier, they’re ideal places for tech startups to set up shop”.
William Jones: Country Head Middle East at Malt
“The UAE is an incredibly compelling offer. As the incentive to stay is whittled down and more people are inclined to at least have a look, you could see a tipping point for UK talent. If you look at large Tech (FANG), then the ambiguity of Tech processes means they can look to realise profits where taxes are low (Ireland is a good example here). The more highly skilled workers that leave for the UAE/Middle East, the more they will pull businesses to follow them.
“Ultimately, taxes like this will certainly encourage highly skilled tech workers to consider where they want to be based. The question is whether a trickle becomes a flood and whether large Tech companies will structure themselves around these types of taxes. The end loser out of this will be smaller UK tech firms and start-ups who will be hit with a double whammy of higher costs to do business and a skilled labour force taking flight.”
