The Chancellor, John Healey, had signalled well in advance that this would be a “steady-as-she-goes” Budget, offering breathing room for households and businesses rather than making significant changes to the tax landscape. That has largely held true, with plenty of tinkering to the UK tax rules but not much transformative change for now.

Revenue raisers

In an attempt to generally shield businesses from tax rises, newly announced revenue raisers have targeted specific sectors, including banks and energy companies. For banks, the corporation tax surcharge will rise by 3% to 6% from 1 January 2027 to 21 March 2028. This is a better outcome than many expected, but temporary tax increases are notorious for being repeatedly extended. Meanwhile the electricity generator levy, which is itself meant to be a temporary tax, is seeing a rate rise from 45% to 55% until 31 March 2028.

Corporate taxes

While regular tax tweaks to raise revenue can deter investment, the Government has been looking to provide greater certainty for significant investments in the UK. That led to the announcement, in the 2025 Spring Statement, of the Advance Tax Certainty service which provides binding clearance on the application of the UK’s tax rules to major investment projects. The threshold for projects to qualify was a lofty £1bn, but it has now been announced that it will be lowered to £300m. 

Of interest for a broader range of companies will be yet another set of changes to capital allowances. For those who can cast their mind back to last year’s Budget, the then-Chancellor, Rachel Reeves, introduced a new 40% first year allowance for main rate expenditure, coupled with a reduction in main rate writing down allowances from 18% to 14%. This year’s Budget continues the theme of front-loading relief while trimming the ongoing annual deduction, by raising the first year allowance to 50% and cutting the writing down allowance to 12%. But additional upfront relief should not be mistaken for generosity, with the Government calculating that this policy change will save the Exchequer (and so cost taxpayers) more than £5bn in the next five tax years.

On the other side of the Exchequer’s ledger sits the much-discussed introduction of the new securities transfer tax. Although the headline tax rate will not change, the Government expects to lose £30m a year, with the largest factor being the shift to self-assessment.

Entrepreneurs or founders

In a moment that might remind some of Alistair Darling’s creation of Entrepreneurs’ Relief in 2008, John Healey announced a new Founders’ Relief, with the very same CGT rate of 10% and lifetime limit of £10m that Entrepreneurs’ Relief had back in 2008. But continuing the theme of tinkering, Entrepreneurs’ Relief (now Business Asset Disposal Relief) was left in place by this year’s Budget, with a lowered lifetime allowance of £500,000. For further detail, see this blog post by my colleague Kasim Mehmood.

Consultations

More transformative changes might be suggested by the Budget’s announcement of a consultation on corporate tax simplification, but the consultation document is quick to limit taxpayers’ expectations. In response to companies’ hopes that Pillar II could remove the need for the UK’s CFC and anti-hybrid regimes, the Government notes that these regimes remain valuable in protecting the UK’s tax base. Although the consultation document acknowledges that simplifying tweaks may be possible, there’s no indication that the UK will follow the EU’s lead and, for example, consider carving companies out of the CFC regime where they are within scope of Pillar II.

Even less promising is the Government’s consultation on predevelopment costs. Following on from the Supreme Court’s decision in Gunfleet Sands (or, as the Court of Appeal and Supreme Court referred to it, Ørsted West of Duddon Sands, which we wrote about here and here), the Government opened a consultation, but with the caveat that it was “not currently minded to legislate” to provide tax relief for predevelopment costs (see our blog post, here). On Budget day, the Government published its summary of responses. Despite most respondents taking the view that relief should be available for predevelopment expenditure, the Government has not announced any intention to legislate. Instead, taxpayers have been promised a review of HMRC guidance to provide greater clarity. An approach which may have been influenced by research conducted by Ipsos for HMRC and published on 27 October 2026, which concluded that the tax treatment of predevelopment costs “typically had no impact on investment decisions”. Although that conclusion should be treated with caution, given that we do not know which businesses were surveyed and the significance of predevelopment costs can vary considerably between sectors.

Tax administration 

Tax administration remains a hot theme in this year’s Budget, with £485m allocated over the next five years to expand HMRC’s compliance team. Some of those resources will no doubt be allocated to the Government’s review of its approach to addressing persistent non-compliant behaviour by a small minority of large businesses, after pressure on HMRC from the Public Accounts Committee to make effective use of the tools already available to it. HMRC’s powers will also be supplemented in this area by an expansion in the amount of information that can be published about deliberate non-compliers. 

Wrapping up this year’s Budget review, companies should be prepared to engage with the nitty-gritty of a number of tax tweaks, but headline-grabbing changes are likely to be limited to the growth of HMRC’s enforcement powers and resources.