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United Kingdom

Chancellor John Healey delivers maiden Budget with tax changes and defence funding

The Budget's tax changes, defence funding and capital budget cuts affect businesses, research spending and public finances across the UK.

Photo: Your Local Guardian

What happened

Chancellor John Healey delivered his maiden Budget on 28 October 2026. Legal 500+1 The Budget includes a temporary 3% Corporation Tax surcharge on banks and a new Founders' Relief offering 10% capital gains tax rates for innovative startups. Legal 500 The main writing-down allowance for capital allowances is reduced from 14 per cent to 12 per cent for the next three years. Ground News The Defence Investment Plan will be fully funded to the full £15bn of funding to 2030, with the remaining £4.7 billion to be identified through further measures. mills-reeve.com Departments must find an additional 1 per cent of capital budgets for the final three years of the spending review period to fully cost the Defence Investment Plan. Research Professional News

Around it

The Budget was set against elusive economic growth, stubbornly high inflation and increasing public debt, with a manifesto pledge not to raise National Insurance, Income Tax rates or VAT for working people. Legal 500 A commentator criticised the Budget as a steady as she goes Budget that avoids market turmoil but fails to tackle key economic issues, citing pressure from the war in Iran on public finances, inflation and energy prices. Your Local Guardian Public investment in research and development makes up around 15 per cent of overall government capital spending, and experts fear R&D could be hit especially hard by cuts worth up to £1.4 billion. Research Professional News The Budget includes a £100 energy payment for households, with 96 per cent of households in Jarrow and Gateshead East receiving payments in January 2027. Ground News+1

What comes next

Households are due to receive the £100 energy payments in January 2027. Ground News Small Business Rates Relief eligibility thresholds for retail and hospitality are due to increase from 1 April 2027. Ground News

Sources

  1. Your Local GuardianHundreds of thousands to miss out on Budget's £100 energy support package
  2. mills-reeve.comAutumn Budget 2026: defence and aerospace
  3. Legal 500UK Autumn Budget 2026
  4. Ground NewsAutumn Budget Deepens Tax Trap for HENRYs, with Marginal Tax Rate on Savings Hitting 64%
  5. Research Professional NewsTreasury demand for defence funds ‘may hit R&D hard’

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