“Founders’ Relief" among string of measures introduced in Budget to encourage founders

The UK government used today’s Budget to court founders, scaleups and investors with a mix of tax changes, visa reform and sector-specific support. The headline move is a new “Founders’ Relief”, a Capital Gains Tax break for founders and significant early investors in UK startups. Alongside that, the chancellor set out a higher tax-free trading allowance for new ventures, from £1,000 to £3,000, plus a new young entrepreneurs allowance to cover a year of living costs while young founders try to turn ideas into businesses.

The pitch is simple: Britain creates too much of the value and lets too much of it drift away. Chancellor John Healey said the biggest barrier to fast-growth firms is investment in Britain, and argued that the country should keep the founders who take the risk, build the company and create the wealth. UK startups responded with praise, calling it the boldest backing for startups and scaleups from the government in years.

Women founders were singled out too. The Budget includes a new scaleup programme for female founders, and the British Business Bank said it will double its investment to female-led businesses in funds to £200m. The government also said it wants to make postive noises about more pension fund investment into UK startups, though the source does not spell out a new rule on that front.

Healey also tied the Budget to a broader push on tech, especially AI and data infrastructure. He said the government must seize the opportunities while guarding against the risks, and that AI should be secure, safe and working for the British people. He also announced a data centre covenant, with strict tests around local community investment, jobs and water protection. In return, critical data centres would get the grid connections they need. And when the NHS or armed forces use AI, Healey said, the data should stay in the UK.