Key takeaways

  • HM Treasury published Entrepreneurship in the UK: Start. Scale. Stay. on 28 October 2026, alongside Budget 2026. It builds on the 2025 prospectus.
  • A new Founders' Relief gives a 10% CGT rate on up to £10 million of lifetime gains from 6 April 2027. The technical consultation closes on 30 November 2026.
  • The CSOP is renamed EMI2 and its option limit doubles from £60,000 to £120,000 from 6 April 2027.
  • The trading allowance rises from £1,000 to £3,000 from 6 April 2027.
  • The government will pilot a Young Entrepreneurs Allowance towards living costs in a business's first year. No amount has been published.
  • Scale UK Connect is a £3.4 million pilot for 200 high-growth firms. Applications close in January 2027 and the cohort starts in February 2027.
  • The government will legislate so non-compete clauses stop blocking hiring, with a detailed position due in early 2027.

Entrepreneurship in the UK: Start. Scale. Stay. is a 32-page HM Treasury prospectus published with Budget 2026 on 28 October 2026. It sets out how the government wants more innovative businesses to start in the UK, grow here and stay for the long term. Most of the tax measures it brings together start on 6 April 2027.

What is the Start, Scale, Stay prospectus?

It is a policy paper, not new law. The GOV.UK page says it covers support for founders, employees and investors building high-growth businesses, and that it builds on the 2025 Entrepreneurship in the UK prospectus.

Its stated aims are to reduce barriers to growth and improve access to talent, customers and capital. The Budget 2026 document summarises it in section 5.6, “Supporting entrepreneurs to start, scale and stay”.

The measures below come from the Budget document and the government’s press release of 29 October 2026, which describe what the prospectus contains.

The tax measures at a glance

Four tax changes for founders and their staff take effect from 6 April 2027.

MeasureChangeFrom
Founders’ Relief10% CGT on up to £10m of lifetime gains6 April 2027
EMI2 (formerly CSOP)Option limit £60,000 to £120,0006 April 2027
Trading allowance£1,000 to £3,0006 April 2027
Business Asset Disposal ReliefLifetime limit £1m to £500,000April 2027

Founders’ Relief is aimed at founders and major early backers of fast-growing UK innovators. HM Treasury’s technical consultation closes at 11:59pm on 30 November 2026, and the final design will go into Finance Bill 2026-27. See our guide to Founders’ Relief.

EMI2 is the new name for the Company Share Option Plan. Our post on EMI and CSOP changes covers the detail.

The trading allowance triples, which helps people testing a business idea. See the £3,000 trading allowance.

BADR moves the other way. The government says halving the limit keeps the relief focused on start-up and scale-up phases. See the BADR limit cut.

The Budget also says R&D tax reliefs will be easier to access and venture capital schemes will be improved. It gives no specific SEIS, EIS or VCT figures.

What support is there to start a business?

The main new item for early-stage founders is a Young Entrepreneurs Allowance. The government will “shortly pilot” it, giving successful applicants support towards living costs during the first year of their business.

The Budget does not give an amount, an age limit or a start date. Do not plan around it until the pilot rules are published.

UKRI is also providing £16 million of proof-of-concept funding to help researchers turn research into businesses.

What support is there to scale?

Scale UK is a “no wrong door” route into existing programmes for high-growth, innovative businesses. Its first new pilot is Scale UK Connect.

The 29 October press release gives these details:

  • 200 high-growth UK firms get 12 months of account management, expansion advice and investor introductions
  • it is an 18-month national pilot worth £3.4 million
  • London & Partners leads it, with partners in Manchester, the West Midlands, the South West, Yorkshire and Scotland
  • applications close in January 2027, the cohort starts in February 2027 and a final report is due in April 2028

On finance, the British Business Bank gets a £5 billion capacity uplift, including £1.4 billion for equity funds and £450 million for venture debt. See our post on the British Business Bank. The Budget also expects the Mansion House Accord to bring around £25 billion of extra investment in UK private markets.

Talent and hiring

The government will legislate so that non-compete clauses are no longer a barrier to hiring for start-ups and scaling firms. The reform will apply across the whole economy, and a detailed position is due in early 2027.

The visa changes are:

  • the High Potential Individual visa extends to graduates of the top 150 institutions
  • the Graduate visa rises to two years for graduates of high-compliance universities
  • the Global Talent endorsed funder route now covers over 100 R&D-intensive businesses

Public procurement

The government wants public buying to favour British firms. A new definition of a UK supplier will be published by January 2027, and a new National Procurement Policy Statement will be laid in Parliament in March 2027.

Which measures apply to you?

  • If you are a founder planning a sale after April 2027, compare Founders’ Relief with BADR, and respond to the consultation by 30 November 2026 if the conditions affect you.
  • If you grant share options, look at EMI2 limits before setting 2027/28 grants.
  • If you earn small sums from a side business, the £3,000 trading allowance may remove tax or reporting from 6 April 2027.
  • If you run a high-growth firm, check whether Scale UK Connect suits you before applications close in January 2027.
  • If your employment contracts include non-competes, wait for the detailed position in early 2027 before rewriting them.

What advisers should do

  1. List founder clients with exits in view. The BADR cut and Founders’ Relief both start in April 2027.
  2. Review share option plans. The EMI2 limit changes the planning for 2027 grants.
  3. Flag the trading allowance to clients with small side incomes.
  4. Watch for the Young Entrepreneurs Allowance pilot rules. Nothing about eligibility is published yet.

Our guide to SEIS and EIS for founders covers the investment schemes that sit alongside these changes.

Frequently asked questions

When was the Start, Scale, Stay prospectus published?

HM Treasury published it on 28 October 2026, alongside Budget 2026. It follows the first Entrepreneurship in the UK prospectus from 2025.

Is the Young Entrepreneurs Allowance available now?

No. The Budget says the government will “shortly pilot” it. No amount, age limit or start date has been published.

What is Founders’ Relief?

It is a new Capital Gains Tax relief giving a 10% rate on up to £10 million of lifetime gains on qualifying disposals from 6 April 2027. The design is out for consultation until 30 November 2026.

What is EMI2?

EMI2 is the new name for the Company Share Option Plan. Its individual option limit doubles from £60,000 to £120,000 from 6 April 2027.

How do I apply for Scale UK Connect?

Applications are made through business.gov.uk and close in January 2027. The pilot supports 200 high-growth firms, with the cohort starting in February 2027.

Sources

Rates, thresholds and rules in this guide were checked against HMRC and GOV.UK guidance on 6 November 2026. Tax rules change, so check the current position on GOV.UK or with a qualified adviser before acting. This guide is general information, not personal advice.