Chancellor John Healey delivered his Budget on Wednesday 28th October 2026. Experts at Liquidation Centre have analysed the key announcements and what they could mean for businesses.

Business rates relief offers breathing space

Healey plans to raise the threshold for Small Business Rates Relief from £12,000 to £18,000. This could help eligible high-street businesses cut their overheads. Online marketplaces will also collect VAT from certain third-party sellers, which could ease concerns about tax compliance and competition between online and physical retailers.

05/07/2024. London, United Kingdom. The Defence Secretary John Healey poses for a photograph following his appointment to Cabinet by Prime Minister Sir Keir Starmer in 10 Downing Street. Picture by Lauren Hurley / No 10 Downing Street

Kimberley Reid, Insolvency Practitioner at Liquidation Centre says: “Any reduction in fixed costs will be welcome news for smaller businesses, particularly those on the high street that have faced rising costs from multiple directions over the last few years. Lower business rates could provide some breathing space and improve short-term cash flow. However, businesses shouldn’t view this as a complete solution.

“Companies that are already struggling with declining sales, creditor pressure or existing debts may find that rate savings alone are not enough to restore financial stability. The businesses that tend to perform best during uncertain economic conditions are those that regularly review their financial position and plan ahead. Understanding profitability, cash flow and future obligations remains just as important as any relief announced in the Budget.”

John Healey said: “I’m increasing the threshold for small business rate relief for retail, hospitality and leisure businesses from £12,000 to £18,000. That means 70,000 more businesses. I’m not just cutting their rates and taking them out of paying business rates altogether. That means half of our shops, restaurants and gyms pay no business rates at all. And for all other businesses in these sectors, I will freeze their rates in real terms so that none face above inflation rise for the next two years.”

Lower overheads may help smaller firms, but healthy cash flow remains essential.

Minimum wage rises could squeeze margins

The planned rise in the National Minimum Wage and National Living Wage will increase hourly pay for lower-paid workers. It will also raise costs for businesses with large workforces. Hospitality, retail and care firms may feel the impact most, as payroll makes up a large share of their spending. A slower increase for 18–20-year-olds may soften the blow, but employers must still plan for higher wage bills.

Reid adds: “Higher wages will be welcomed by many workers, but employers will need to carefully assess the impact on their operating costs. For labour-intensive sectors such as hospitality, retail and care, even relatively modest increases can have a significant effect on profitability. Businesses will need to decide whether they can absorb the additional costs, improve efficiency, increase prices or find savings elsewhere.

“These decisions are rarely straightforward, particularly in sectors where margins are already under pressure. The key is planning ahead. Businesses that understand the effect of increased wage costs on their forecasts and cash flow will be in a stronger position to adapt than those that simply react when the bills arrive.”

Founders’ relief encourages new ventures

Healey has announced a new trading allowance, which lifts tax-free earnings from a new venture from £1,000 to £3,000. Support for young entrepreneurs and a lower capital gains tax rate for successful founders could also encourage more people to start and grow businesses in the UK.

John Healey said: “I believe that when business founders take that risk, build an exceptional company, create wealth for Britain, we should recognise that success and keep those people here to invest again. That is why today I’m announcing a founder’s relief, a brand new relief in capital gains tax, a 10% rate on lifetime gains, up to £10m for the founders of our most successful firms.”

Starting a business is only the first step, though. Founders still face rising costs and uncertainty as they grow.

Reid comments: “It’s positive to see measures designed to encourage entrepreneurship and reward people who take the risk of building successful businesses. Incentives like these can help create confidence for founders looking to start, grow and eventually exit a company.

“However, tax relief is only one part of the picture. Many otherwise successful businesses experience difficulties because growth requires investment, and rapid expansion can place significant strain on working capital and cash reserves. From our experience, business owners who maintain strong financial controls and seek advice early when challenges arise give themselves far more options if circumstances change. Building a successful company is important, but ensuring it remains financially resilient is equally critical.”

Alcohol duty relief for small brewers

The Budget includes £10 million in alcohol duty relief for around 2,000 small British brewers. This could ease cost pressures for independent producers, but breweries must still manage energy, ingredient, staffing and distribution costs to stay profitable.

Reid states: “Independent breweries will welcome any measure that helps reduce cost pressures, particularly at a time when many are continuing to face higher production, energy and distribution costs. While duty relief may improve margins, it is unlikely to remove the wider financial challenges affecting the sector.

“Consumer spending patterns, rising operating costs and increased competition will continue to influence profitability. The most resilient businesses are often those that regularly review their financial performance and address issues before they become serious problems. Taking action early can preserve options and prevent financial difficulties from escalating into a situation where more formal restructuring or insolvency advice is needed.”

Plan ahead, whatever the Budget brings

Each announcement offers some relief, but none replaces sound financial planning. CMA Accountancy can help you forecast cash flow and manage costs.