Budget 2026: What Healey’s Founders’ Relief, visa reforms and non-compete ban mean for UK tech

The Chancellor’s first Budget gives tech scale-ups a cheaper exit, an easier route to hiring overseas graduates, and staff who can move more freely, though most of the detail is still out for consultation.

John Healey’s first Budget gives British tech companies three things the sector has long lobbied for: a lower tax rate on founders’ exits, easier hiring of international graduates, and an end to non-compete clauses as a barrier to moving between start-ups. Under a new Founders’ Relief, qualifying founders will pay capital gains tax at 10% on up to £10m of lifetime gains from 6 April 2027.

The Chancellor framed the package around growth companies. He told MPs that high-growth firms are under one per cent of smaller businesses yet produce more than half their output, and said of the start-ups of today and the scale-ups of tomorrow: “I want to see them succeed and stay in Britain.”

The founder’s exit

Against the 24% higher rate, the relief could save a founder up to £1.4m. The Budget, the first of Andy Burnham’s government, also left capital gains tax rates unchanged, despite cabinet ministers including Wes Streeting and Louise Haigh pressing for an increase.

The bar is set high. A founder must have held at least a quarter of the ordinary shares when the business began and kept shares for five years. The company needs turnover of at least £10m and 15 full-time staff, and must meet two of three tests: 25% compound annual turnover growth over three periods, 25% headcount growth, or £1.5m of R&D claimed in the three years before sale. For a typical venture-backed company, that means near doubling revenue in three years from a £10m base.

Founders who fall short face a worse position than today. The lifetime limit on Business Asset Disposal Relief, which carries an 18% rate, halves to £500,000 on the same date. Government figures show the two changes roughly cancelling out by 2030/31.

Startup Coalition, the lobby group led by Dom Hallas, credited a Treasury call for evidence on founder tax, led by the entrepreneur Alex Depledge. It also called the eligibility criteria tight and said it would seek changes during the technical consultation.

Hiring overseas talent

The visa changes are aimed squarely at the graduate and senior engineering market. The High Potential Individual visa will extend to graduates of the world’s top 150 universities, the Graduate visa will last two years for eligible institutions, and salary thresholds for sponsored skilled workers will change. The most highly paid skilled workers will get up to six months to find a new job if their employment ends, from 2027, reducing the risk for overseas hires who join early-stage companies. Global Talent visa endorsement will also widen to R&D businesses.

Non-competes and staff equity

Startup Coalition described the Budget as confirming a ban on non-compete clauses. The Chancellor’s own wording was more qualified: he said the clauses would no longer obstruct hiring by start-ups and scale-ups, while ordinary workers would remain free to change jobs. Consultations on the detail, and on gardening leave and non-solicitation clauses, are due shortly; the coalition warns that a ban leaving gardening leave untouched would change little in practice.

For staff, a new EMI2 scheme doubles the value of tax-advantaged options available at companies that have outgrown EMI, from £60,000 to £120,000, easing a cliff-edge that scale-ups say hampers retention.

Capital and AI

The British Business Bank’s capacity rises by £5bn to £30.6bn, funding equity investments, a new venture debt product and support for community lenders. The bank will double its commitments to women-led businesses and funds to £200m, alongside a new scale-up programme for female founders recommended by the Women in Tech Task Force. Up to £5bn will go to defence and dual-use technology companies over four years.

An AI package worth more than £700m includes a £140m increase for the Sovereign AI Fund, plus a data-centre covenant offering faster grid connections in return for local investment.

At the earliest stage, the trading allowance triples to £3,000 and a pilot Young Entrepreneurs Allowance will cover a year of living costs. The Treasury has not published its age limit, value or selection process.

Not everyone was persuaded. Kemi Badenoch, the Conservative leader, argued the Budget contained nothing for business. For tech founders, much now depends on the consultations: on Founders’ Relief eligibility, which decides how many companies qualify before April 2027, and on non-competes, which decides whether the promised ban reaches gardening leave.