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Adviser urges Burnham to use first Budget to restore incentives for entrepreneurs

ended 04. September 2026

Prime Minister Andy Burnham should use his first Budget on 28 October to reverse the deterioration in the tax treatment of entrepreneurs and rule out further Capital Gains Tax increases.

Since Labour came to power, the main higher rate of CGT has risen from 20% to 24%, Business Asset Disposal Relief has risen from 10% to 18%, and Business Relief from Inheritance Tax has been restricted.

Scott Gallacher, director of Rowley Turton, said:

“Rachel Reeves repeatedly talked about the need for growth, entrepreneurship and wealth creation, but the tax system has moved in the opposite direction for people who actually build valuable businesses.

“For someone creating a business worth £5 million, £10 million or more, the combination of higher tax on sale and restricted Business Relief materially changes the risk and reward.

“I already know of successful business owners considering emigrating before a sale because they regard the current CGT burden as penal.

“That should worry Andy Burnham. If his Government genuinely wants growth, his first Budget should start restoring the incentive to build substantial businesses in Britain rather than giving successful entrepreneurs reasons to leave.”

Gallacher also warned that the tax changes could affect where wealthy individuals choose to deploy their capital.

“Someone with capital can accept concentrated risk, employ people and spend years building a business, or simply invest conventionally and use structures such as Family Investment Companies, trusts and lifetime gifting as part of their wealth planning.

“As the second option becomes increasingly attractive relative to entrepreneurial risk, that is not a great outcome for a Government that needs private-sector growth.”

Questions for business owners and advisers

  • Should Burnham use his first Budget to reverse some of the recent tax changes affecting entrepreneurs?
  • Are higher CGT rates influencing when or where business owners sell?
  • Are you seeing entrepreneurs consider emigrating before a major disposal?
  • Has restricted Business Relief changed the attractiveness of building a business beyond £5 million?
  • Are Family Investment Companies, trusts and conventional investments becoming relatively more attractive than entrepreneurial risk?

9 responses from the Newspage community

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Scott Gallacher
Director at Rowley Turton
In my experience, once a business owned by a husband and wife grows beyond the £5 million level covered by their combined Business Relief allowances, it is often no longer simply about providing for their own financial needs.

For many entrepreneurs, continuing to build the business is about legacy — creating something valuable to pass to their children, employees or the next generation.

Restricting Business Relief undermines that incentive. Burnham and Healey need to use the Budget to encourage entrepreneurs to keep building great British businesses beyond the point at which they personally have enough, rather than giving them a tax reason to stop, sell or leave.
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Adam Stiles
Managing Director at Helix Financial Partners
The Labour Party's idea of an entrepreneur is Scrooge McDuck. The reality of an entrepreneur is much starker. Headaches, hardship and heartache. We spend countless hours away from our families trying to make something for our family, our staff, our clients but Reeves and Starmer have attacked us more than any time in living memory. There is currently very little incentive to grow, do well or have any real aspiration.
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Eugen Neagu
Director at N2 Asset Management Limited
The main problem that most businesses encounter is the cost of employing new people, especially experienced workers and managers. From £1.15 cost for the employer, a high rate taxpayer worker gets only £0.53 or 46%. 54% goes in one way or another paid to HMRC as income tax or national insurance contributions.

This forces many businesses to look Overseas where taxes are lower with the end result in increased unemployment in the UK, and pressure to increase taxes again.
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Mike Staton
Director at Staton Mortgages
The Right like to blame the countries problem on immigration and the left like to blame the problems on business owners. Both cant be right. I have been impressed with Andy Burnham, although it feels like it wasnt hard to improve on the inept previous regime. Andy should now concentrate on getting the economy moving, Keir and co had their boots firmly planted on the throats of business owners, stifling employment and growth. If the PM continues down the path the labour party have moved down over the past 2 to 3 years, we will see more businesses fail and more damage done to the economy. I think his aim should be to get the housing market moving, everybody but the labour party are screaming for stamp duty to be abolished, this would seriously boost our economy. Tax relief on small business owners will also stimulate the employment market and get britain back on track. Lets hope Burnham is serious about saving the country and not hoping to further award people for choosing not to work.
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Tony Redondo
Founder at Cosmos Currency Exchange
Andrew Griffith, the newly appointed Shadow Chancellor, brings more years of business experience than the entire Labour cabinet combined. This makes sensible economic announcements on October 28 unlikely, assuming a bond and sterling crisis does not hit first. So far, Chancellors Reeves and Healey have delivered only rhetoric. Reversing recent CGT increases and restoring Business Relief would signal genuine support for private-sector growth. High taxes squeeze the risk-reward ratio, forcing founders to accelerate exits, defer sales, or use phased earn-outs to manage exposure. For multi-million-pound businesses, relocating to lower-tax jurisdictions before disposal is now a pragmatic strategy for wealth preservation. Additionally, restricting Inheritance Tax IHT relief on unquoted shares adds heavy estate exposure above £5 million, encouraging early de-risking over enterprise building. Capital is shifting away from active creation toward Family Investment Companies and trusts.
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Tony Sanchez
Founder at Bridging Loan Directory
The first priority should be certainty. Entrepreneurs take risks, invest and employ people years before they know what their business may eventually be worth. Repeated changes to CGT and business reliefs alter the prospective reward after many of those decisions have already been made.

The Budget should therefore rule out further near-term increases and set out a stable tax framework against which owners can plan. Reversing every change may be unrealistic, but continually making business ownership less attractive risks influencing where founders establish companies, retain capital and ultimately sell.

Tax will rarely be the sole reason somebody emigrates, and anecdotal examples should not be mistaken for a general exodus. However, government should take the warning seriously. If conventional investment and wealth-planning structures offer a better risk-adjusted outcome than building an employing business, the incentives are pointing in the wrong direction.
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Guy Skinner
Financial Planner and Director at Citygate Financial Planning
I think even at a lower level, 15% NI to employ someone needs to be reduced. We need as close to full (productive) employment to reduce the cost to the state. We’ve already seen the workings on CGT and an equalisation with income tax and that this won’t deliver economic benefit. It’s tax poor policy and with the loss of tapering to allow for inflation, is already much higher than the rate would suggest. We talk about long term thinking all the time and how we need more. That involves building, growing, owning and doing so for a period of time, it’s not flipping and transactions as some may think. The incentive to build a meaningful business isn’t ever about the tax reliefs, but somehow I think we should reward the people who get out of their comfort zone, create jobs, take risks and grow and economy. There are more entrepreneurs emigrating and recent rule changes in Turkey seem to be making it more attractive!
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Kate Underwood
Founder & Chief People Strategist at Kate Underwood HR and Training
Everyone talks about the owners who leave. I'm more worried about the ones who stay and stop.
I speak to business owners daily who are considering jacking it in because of the costs and now the risks. These are people who built something from nothing and know every one of their staff by name. They aren't booking flights to Dubai. They're sat at the kitchen table on a Sunday night wondering if it's still worth it.
The exodus isn't people leaving Britain. It's people giving up while they're still here.
And it isn't only tax. The Employment Rights Act is landing on the same desks. Costlier to employ someone, riskier to employ someone, and a bigger bill if you're daft enough to make it work. No wonder everyone's rushing to hire.
Nobody notices what doesn't happen. The apprentice nobody took on. The two jobs never advertised. The lad who'd have been promoted, if there'd been anything to promote him into.
You can tax someone for selling a business. You cannot tax them into building one.
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Harry Goodliffe
Director at HTG Mortgages
Nobody starts a business because of a tax rate, but plenty sell because of it. That's the bit our Government keeps missing. Founders spend years taking all the risk, and the reward on the way out has been cut, with the main CGT rate up from 20% to 24% and Business Asset Disposal Relief nearly doubled to 18%. The message that sends is simple: build it here, sell it somewhere cheaper. Burnham's first Budget is his one chance to say no more rises and mean it.