CHANCELLOR ANNOUNCES TAX RELIEF FOR STARTUP FOUNDERS

Chancellor John Healey announced a new tax relief for startup founders in his first Budget on Wednesday. Under the proposed Founders’ Relief, entrepreneurs would pay capital gains tax at 10 per cent on up to £10 million of lifetime gains from selling qualifying shares. The Treasury said the measure would target founders and significant early investors in high-growth British companies. Brent Hoberman, co-founder of Founders Forum Group, said: “Founders’ Relief, in particular, is something we’ve long been calling for and will encourage our best entrepreneurs to start and stay in Britain.”

The Budget also halves the lifetime allowance for Business Asset Disposal Relief from £1 million to £500,000. The Treasury said three-quarters of people who currently claim that relief would be unaffected. The reduction has been described as a £300 million tax increase on entrepreneurs to help fund the new founders’ measure. Entrepreneurs who do not qualify for Founders’ Relief would face the lower Business Asset Disposal Relief allowance. The government has yet to decide the full eligibility rules for the new scheme.

A consultation on who will qualify runs until 30 November, and the Treasury plans to introduce Founders’ Relief in April 2027. Andy Aitken, co-founder and chief executive of Honest Mobile, called the Budget “incredible” for UK founders. He said the government had recognised the importance of rewarding entrepreneurs after years that had felt like a step backwards. Investors also warned that Britain’s growing businesses need more capital if they are to remain in the country. The proposed tax relief and its eligibility rules will determine which founders can claim the new rate.