John Healey delivered the Budget on 28 October 2026.
While much of the Budget's political focus has been on cost-of-living measures, energy support and tax changes for individuals and businesses, a number of announcements will be of particular interest to the UK's financial services sector.
Whether a regulated firm, lender, wealth manager, fintech business or investor, the Budget offers a useful insight into the Government's current priorities
Although major regulatory reforms were not announced, the Budget signals a continued emphasis on encouraging investment, supporting entrepreneurship and simplifying aspects of the tax regime.
Our Financial Services team explain below.
A growth-focused narrative
A central theme running throughout the Budget is the Government's stated desire to stimulate economic growth and investment.
The Chancellor referred to backing Britain’s entrepreneurs to succeed and encouraging investment across the UK economy.
Growth-focused policy generally creates opportunities for lenders, investment firms, fund managers and advisers as businesses seek funding, expansion capital and strategic advice.
The Government has also continued to emphasise the role of financial markets and private capital in supporting economic development, suggesting that the financial services sector will remain central to its broader growth strategy.
Temporary increase to the Bank Surcharge
The Government has confirmed a temporary rise in the Bank Corporation Tax Surcharge from 3% to 6%, from 1 January 2027 to 31 March 2028, which is likely the most direct measure affecting the financial services sector.
The measure is expected to form part of the Finance Bill 2026-27 and represents one of the most notable sector-specific tax announcements in the Budget.
Whilst the increase is temporary, affected banks will need to consider its impact on forecasting, capital allocation and profitability.
Financial institutions may also be reviewing the implications for pricing strategies and future lending decisions.
For firms operating outside the banking sector, the change does not directly apply, but it demonstrates the Government's willingness to look to larger financial institutions to generate additional tax revenues where required.
Tax simplification
Alongside the Budget, the Government launched a consultation on corporate tax simplification for business investment to support business investment, growth and competitiveness.
As outlined by Rt Hon James Murray MP, Financial Secretary to the Treasury:
“A stable and predictable Corporation Tax system helps give businesses the confidence to invest, innovate and grow.
A commitment to make the tax system easier to understand and operate therefore directly complements the government’s commitment to economic growth in every postcode.”
Of particular interest to finance professionals are proposals relating to:
- treaty relief from withholding tax on interest;
- the unallowable purpose rule; and
- the Corporate Interest Restriction regime.
The consultation recognises longstanding concerns from businesses, advisers and tax experts regarding the complexity of certain aspects of the UK tax code, including the cumulative effect of overlapping regimes, administrative hurdles and reporting requirements.
Increased focus on entrepreneurs and private capital
One of the more noteworthy themes emerging from the Budget is the Government's desire to support entrepreneurship and encourage investment into businesses.
Among the measures announced were:
- a new Young Entrepreneurs Allowance, to cover a year of living costs for young founders while they turn their ideas into businesses;
- a new founders' relief: 10% Capital Gains Tax on up to £10 million;
- a new trading allowance increasing the amount that can be earned tax-free from a new venture (from £1,000 to £3,000); and
- initiatives aimed at promoting investment and economic growth.
This is to be welcomed by many within the financial services and venture capital communities.
A policy environment that supports founders and growth businesses can help stimulate greater demand for lending, investment, private equity funding and advisory services.
For early-stage businesses and their advisers, attention will now turn to the details of the proposed consultations and whether meaningful incentives emerge to encourage business formation and scale-up activity.
Developments in savings and retail investment
The Budget also contains several measures relevant to retail investors and wealth managers.
Most notably, the Government confirmed that the £20,000 per year Cash ISA limit will stay. In addition, proposals have been announced for a new "Starter ISA" intended to reward first-time investors to enter the investment market.
The policy objective appears to be increasing retail participation in investing and improving financial engagement among individuals who may not have previously considered investing.
For financial advisers, platforms and investment managers, such initiatives could create opportunities to engage new investors and broaden participation in financial markets.
However, as always, the success of any new savings or investment product will depend heavily on its final design, simplicity and consumer understanding.
Enhanced HMRC compliance powers
The Chancellor confirmed that he was providing funding to HMRC to improve compliance, and enhanced powers to collect unpaid tax from those who fail to engage with repeated contact but who can clearly afford to pay.
Whilst these measures are not targeted at regulated financial services firms specifically, they reinforce the wider trend towards increased scrutiny, stronger enforcement and greater emphasis on compliance across the financial system.
Looking ahead
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The Autumn Budget 2026 is not a landmark financial services Budget in the sense of introducing major regulatory reform. However, it provides important indicators as to the Government's priorities for the coming years. For financial services firms, the key takeaway is that many of the most significant developments will emerge through consultations and secondary legislation over the coming months. In short, while the Budget may not have delivered the sweeping reforms some in the industry had anticipated, it has set a clear direction of travel: promoting investment, supporting growth and maintaining a strong focus on tax compliance. |
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Kiera Goodwin
Solicitor
Kiera is a Solicitor in the Corporate Commercial team at Myerson and a member of the Financial Services and Manufacturing teams. Kiera has experience in a variety of corporate matters, including employee ownership trusts, share sales, share buybacks, employee share option schemes, company reorganisations, and other general corporate matters.
About Kiera Goodwin