Neither House of Parliament sits again until next week. But with the Budget looming large on 28 October, we couldn’t resist a newsletter before the end of the conference recess.
There is always a fair amount of speculation ahead of a Budget, which impacts the behaviour of entrepreneurs well before the Chancellor utters a word. In a new report, Tax Policy Associates estimates that around £45 billion of gains were brought forward ahead of the October 2024 Budget, helping push 2024–25 taxable gains to a record £127 billion, 82% above the year before.
That might sound like a windfall for the Treasury. But those gains would otherwise have been realised over the following years and taxed at 24%; instead they were taxed at 20%, at an estimated cost of £1.4 billion to £2.4 billion. Dan Neidle, founder of Tax Policy Associates, expects the same happened before the 2025 Budget, and that it is happening again now. Nor is the instability new. Over successive governments, the headline capital gains tax rate has been raised, cut, raised again, and split into multiple sub-rates.
Research has found that Brexit uncertainty reduced business investment. More broadly, the academic literature shows that periods of high policy uncertainty coincide with lower business formation, investment and innovation.
After the 2025 Budget, the then Chancellor told the Treasury Committee there had been too much speculation and too many leaks, much of it inaccurate and very damaging. A leak inquiry followed.
Leaks aren’t the only problem, though. Newspapers, think tanks, business and lobby groups can fall into the habit of driving speculation. Sometimes it’s to head off changes they oppose. But sometimes it’s because taking credit for stopping a measure is a way to demonstrate influence, even when the measure was never really on the table.
This is familiar ground for the APPG. Back in 2018, our report on Tax Reform included cross-party forewords from Liam Byrne MP (Labour), then Chair of the APPG for Entrepreneurship, and Colin Clark MP (Conservative), who wrote that the Treasury and HMRC must ensure policy “has longevity”. The report found uncertainty over the Annual Investment Allowance (AIA) made it hard for firms to plan investments spanning three to four years. Since then, the 2022 Autumn Statement set the AIA at £1 million permanently, full expensing was made permanent in 2023, and both were confirmed in the 2024 Corporate Tax Roadmap.
In 2023, our APPG report Funding to Flourish argued that uncertainty about the future of the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs) was already having a negative impact, because founders couldn’t plan fundraising rounds without knowing whether the schemes would survive their 2025 sunset clause. The report was launched in the Lords with Lord Leigh and the then Shadow Business Minister, Bill Esterson. The 2023 Autumn Statement extended both schemes to 6 April 2035, with support from both sides of the House, giving entrepreneurs and investors certainty about their future.
More recently, founders at our evidence session on R&D tax relief described years of near-constant change creating a chilling effect on legitimate claims. Unlike the AIA and EIS/VCTs, R&D relief has had no lasting commitment to stability in its rules. As the cases above show, stability commitments can be delivered and kept across governments.
Governments of all hues have used roadmaps to reduce speculation. Examples include the Coalition’s 2010 Corporate Tax Road Map, the 2016 Business Tax Road Map and the Corporate Tax Roadmap 2024. Their record is mixed, but each was an attempt to give business a clearer view of the years ahead.
In 2017, Better Budgets, a report by the Chartered Institute of Taxation, the Institute for Government and the Institute for Fiscal Studies, argued for one main fiscal event a year and a more open process. Some of its authors have since said tax policy making has gone backwards.
No government will tie its hands on every tax, but there is no reason Chancellors can’t commit to stability on most business taxes for the length of a Parliament, and rule out ideas they have no intention of adopting.
Whichever Chancellor manages to quell business uncertainty, now or in future, will find entrepreneurs ready to invest, hire and build the growth every party says it wants.
Advisory Board Update
Latest news, research and events from our Advisory Board
The Entrepreneurs Network is hosting three report launches in October. On 7 October, it launches the JVF Female Founder Ambition Series report, which examines the barriers female founders face across the full lifecycle of building a business. Job Creators 2026, produced with Penningtons Manches Cooper and launching on 14 October, looks at foreign-born founders building Britain’s fastest-growing businesses.
On 21 October, it launches Starting Out and Starting Up: Making self-employment a route into work for young people. The Entrepreneurs Network is also heading to Oxford on 15 October for an informal morning meetup for Ecosystem Builders.
London Life Sciences Week 2026 will be held from 15 to 20 November, bringing together the global life sciences community for a week of events, showcases, breakthrough innovations, investment opportunities and networking.
Beauhurst Insights has published two new reports. Unlocking Value from AI, produced with BGF, looks inside growth businesses, while Financing the Future, produced with Barclays Eagle Labs and Barclays’ Group Policy Development team, examines the role international capital plays in helping UK companies grow.
Universities UK is conducting a survey to understand the key decisions made by innovators, entrepreneurs and investors, and the policies they need.
The Enterprise Research Centre (ERC) will present the results from its Longitudinal Small Business Survey on 18 November at The Shard, reflecting on trends over 11 years of data. It is also holding its annual conference on the State of Small Business in Britain on 1 December, focusing this year on small businesses and local economic resilience. Separately, the ERC has just published What determines the mobility of university spinouts? An interview-based study of spinouts in the Midlands.
In Parliament
Questions and comments relating to entrepreneurship this month
Our Member Baroness Neville-Rolfe pressed the Government on the impact of tax rises on young people and wealth creators:
“What steps are the Government taking to ensure that their cumulative tax rises do not drive away young people or established wealth creators such as Chris Rokos, who until recently contributed so much to the UK’s prosperity in tax and philanthropy?”
Baroness Meyer asked the Government for their assessment of the cumulative impact of tax measures:
“Since the changes to capital gains tax and higher employment costs, 6,000 business owners and company directors have left the country, some 13,000 stores and 700 pubs have closed, and 7,000 hotels, restaurants and cafés have entered insolvency. The warnings are coming from everywhere: the Institute of Directors, the CBI, the IEA, the British Retail Consortium, the hospitality sector and major retailers all point to the burden of higher taxes. We cannot tax our way to growth. Does the Minister not agree that to get growth, we need more entrepreneurs and risk-takers, not policies that drive them abroad?”
Our Officer Lord Bilimoria added that the high level of taxes is eroding competitiveness:
“Will [the Minister] acknowledge that a reason for this is the highest level of taxes that we have had in 80 years? That is eroding our competitiveness, our attractiveness as an investment destination and, most importantly, growth.”
Our Officer Baroness Kramer turned to the increase in employers’ National Insurance:
“When the Government increased employers’ NICs and reduced the threshold, it gave protection to the tiniest small enterprises. But surveys now estimate that more than 40% of small and medium-sized enterprises have been significantly negatively impacted. Have the Government tracked the growth lost from the impact on this critical sector, particularly in the most disadvantaged regions of the country?”
Treasury Minister Lord Pitt-Watson responded:
“I hope there is some assurance in the first speech that the Chancellor of the Exchequer made when he said that he was just as concerned about the cost of doing business as he was about the cost of living.
The noble Baroness is correct that 900,000 small businesses are protected from this. There are also protections for hiring people under 21 and apprentices under 25.”
Richard Fuller MP asked the Government for details on the northern scale-up fund:
“The Minister talked about the northern scale-up fund, which is an interesting initiative, but can she advise us who will be making the investment decisions and assure the House that they will not be subject to political direction?”
Chief Secretary to the Treasury Emma Reynolds responded:
“The British Business Bank will make those decisions independently of Government, as should always be the case. He is right to ask for reassurance about that, and I have provided it. We are a Government that are serious about devolving power to every part of the country.”
Our Officer Callum Anderson MP raised the issue of startups going overseas to scale:
“The Chief Secretary to the Treasury is right that the UK has a vibrant ecosystem of innovative companies, but too many are looking to go overseas to realise their scale-up potential and become globally consequential companies, so I very much welcome the focus on using the state as a strategic partner to help them do that. How will the Treasury work across Whitehall and the wider public sector to help drive that cultural mindshift?”
Chief Secretary to the Treasury Emma Reynolds responded:
“I reassure him that, as the Chancellor set out this morning in his growth speech, we will work across Departments to ensure that we open up public procurement to smaller and start-up businesses, so that they stay here, rather than go elsewhere when they scale up.”
Looking Forward
Consultations and calls for evidence from government departments and Select Committees
Financial Services Regulation Committee — Regulatory sandboxes in financial services (Deadline: 23 October 2026)
Work and Pensions Committee — Pensions adequacy — auto-enrolment contributions for low earners and their employers (Deadline: 26 October 2026)
Office for Equality and Opportunity — Equal pay and pay discrimination (Deadline: 27 October 2026)
Home Affairs Committee — Work-based immigration (Deadline: 27 October 2026)
Department for Work and Pensions — Small Pots: a pathway for consolidation (Deadline: 17 November 2026)
