Coutts Business Insights: What do entrepreneurs need to know from the Budget?

Although there is immense confidence in the quality of British (and Cambridge-based) innovation, particularly in sectors like life sciences, deep tech, and AI, there are some notable headwinds scaling businesses face. The sentiment in the room was a fascinating blend of what we might call ‘micro-optimism’ for individual business prospects and ‘macro realism’ regarding the wider UK operating environment.

For many we spoke to, the need for growth could be limited in places by the rising tax burden and a potential lack of latitude for government support. The consensus was that while the UK remains an excellent place to start a business, some hurdles to scaling here and staying here, have become steeper.

Positively, the Budget and its accompanying Entrepreneurship in the UK prospectus explicitly aim to foster a ‘Start, Scale, Stay’ ecosystem that keeps the best of UK business and talent here.

Here’s what we learned from our discussion and what we believe all growth entrepreneurs need to know:

1. The tax burden vs. targeted reliefs: With higher UK taxes – the expansion of reliefs like the Enterprise Investment Scheme have become even more critical for helping businesses manage costs.
2. Capital allocation remains a structural barrier: Government reforms to unlock pension funds are welcomed as a necessary fix for a risk-averse investment culture, but entrepreneurs continue to feel the pull of US capital.
3. From IP to ambition: Despite protected R&D budgets, there is still more to potentially be done help government keep pace with business. However, the expansion of the Enterprise Management Incentive scheme will support innovative companies to attract and retain more of the best talent.

A dominant theme in our discussion was the potential for fiscal policy to affect entrepreneurial risk-taking. The increase in capital gains tax rates for business asset disposal relief (rising to 18% by April 2026) and changes to employee ownership trusts (EOTs) were cited as factors that could dampen the incentive to stay and build long-term value domestically.

However, the Budget does offer specific tools to counterbalance these pressures. For ambitious firms, the government is doubling down on tax-advantaged investment schemes. The Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT) will see their investment limits doubled to £10 million (£20 million for knowledge-intensive companies) – strengthening mechanisms to attract external private equity.

In a higher tax environment, engaging with these forms of relief is no longer about tax efficiency, but actually a necessity for maintaining competitive growth.

The conversation echoed what we have heard throughout the Business Insights Programme: there remains a persistent cultural disparity between the UK and the US. As we found in our report earlier this year, there is a concern that without a shift in risk appetite, the UK risks becoming an ‘incubator economy’ – developing brilliant ideas that are ultimately commercialised and scaled elsewhere.

The government’s Budget measures attempt to address this by intervening in the market structure. The British Business Bank has been given a new mandate to deploy £25.6 billion of financial capacity, with a specific target to direct over 60% of venture investment into scaling companies. Additionally, the new VentureLink initiative aims to unlock domestic pension capital for high-growth firms.

These structural reforms are promising on paper, but our roundtable were conscious that cultural change takes time and wanted to encourage further infrastructure to support entrepreneurs expanding into new markets. While inward investment is central to growing our economy, UK companies abroad have less of an established presence (although there are clearly stand-out exceptions).

Until domestic institutional capital flows as freely as it does across the Atlantic, founders must remain agile in their fundraising strategies, leveraging these new government-backed vehicles while continuing to court international investment to fuel their ambition. 

Cambridge is proof of the UK’s ability to generate world-class intellectual property. Yet, our attendees noted a disconnect between scientific brilliance and commercial execution. There was a strong feeling that the machinery of government could advance in its support of high-growth tech firms, with calls for a more aggressive ‘Brand Britain’ approach to championing key sectors globally.

The Autumn statement does go some way to responding – protecting the £22.6 billion R&D budget and introducing a £130 million Growth Catalyst to support frontier companies. But perhaps the most practical win for scaling firms is the expansion of the Enterprise Management Incentives (EMI) – a tax-advantaged share scheme designed to support scaling companies to recruit, retain and reward key employees. With the cost of hiring rising, the battle for top-tier talent is intensifying. The decision to double the EMI employee limit to 500 and quadruple the gross assets test to £120 million, allows scale-ups to offer competitive equity packages to senior leaders for longer.

In a market where founders feel they are fighting for talent against well-funded global competitors, this expansion is a potentially vital lever for retention and recruitment.

The Autumn Budget presents a complex picture – a clear increase in the fiscal burden, counterweighted by targeted structural reforms designed to fix the long-standing issues of capital access and talent retention.

While we should acknowledge that no measures exist in a vacuum, and low consumer confidence and higher inflation may have a knock-on effect on business, it is certainly true that this is a more ‘pro-business’ Budget than we saw in 2024, with a deep focus on scale-ups, that should be welcomed.

At Coutts, we understand these nuances and are here to help entrepreneurs interpret these changes, utilise the available tax reliefs, and connect with the capital you need to realise your ambitions – on your own terms.

For more insights like these and to join future discussions, register your interest in the Coutts Business Insights Programme.

Tax reliefs referred to are those applying under current legislation which may change. The availability and value of any tax reliefs will depend on your individual circumstances.