If you were hoping for fireworks, this Budget probably wasn’t it. Corporation tax, income tax, VAT and employer National Insurance all stayed where they were.
But the smaller print is worth a look. A few changes could affect how you take money out of your business, what you walk away with when you sell, and how well the business copes if something goes wrong. Most kick in from April 2027, and one of the biggest waits until April 2028. So you’ve got time, but it’s a good moment to check your protection still fits.
Share buybacks got hardly any airtime on Budget day, but if you own a private company, this might be the one that matters most.
From April 2028, the rules on how a company’s payments to shareholders are taxed will change. Right now, when a company buys back its own shares, it can often be taxed as capital, at lower rates. That’s being replaced by fixed conditions, including a minimum 5% shareholding, the shareholder leaving the company completely within two years, and a five-year clawback. Miss those, and the payment could be taxed as a dividend, which is often a lot more.
Here’s why we care. Plenty of shareholder protection set-ups work like this: the company owns the policy, then uses the payout to buy back a departing owner’s shares. That’s the sort of deal these rules are aimed at. It’s also not clear yet how they’ll apply to shares bought from the estate of an owner who’s died, and the detail is still being consulted on. So if that’s how yours is arranged, have another look before 2028. It might also be worth asking whether co-owners buying each other’s shares directly, through a cross-option agreement with policies in trust, would suit you better.
From 6 April 2027, the lifetime limit on Business Asset Disposal Relief halves, from £1 million to £500,000. Anything above that is taxed at 24% instead of 18%. There’s a new Founders’ Relief too, but it’s aimed at a narrow group of high-growth companies, so most owner-managed businesses won’t qualify.
When an exit is worth less after tax, the value of the business matters even more. And the exit that hurts most is the one you didn’t plan. If serious illness forces you to sell, you lose control of the timing and you might have to take a lower price. Shareholder protection with critical illness cover can give your co-owners the money to buy you out fairly. And key person cover can help protect the business if someone who drives it can’t work.
None of these are big on their own, but they add up, and they take away a little slack:
Equipment tax relief is slower: the writing down allowance drops from 14% to 12% from April 2027
Wages are going up: the National Living Wage rises to £13.21 from April 2027, and people paid just above it will probably expect a bump too
Business rates: offices, workshops and professional firms in England face higher multipliers
Borrowing: the bank surcharge doubles for a while, and some of that could get passed on to customers
When your costs are fixed and your margins are tight, there’s less room if a key person is off and the wages still need paying. So it’s worth asking how your loans, asset finance and any personal guarantees would get repaid if one of you died or became seriously ill. And if you’re competing for staff, group income protection or group life cover can help you hold on to good people without raising everyone’s pay.
From 6 April 2027, property income will be taxed at 24%, 44% and 49%, and savings income goes up by the same amount. It’s not a business tax, but it hits lots of owners personally. Think about anyone who owns their premises and rents them to their company, or keeps cash outside an ISA to fund a future buyout.
If you own your premises personally, your death could leave the business relying on a building that now sits in your estate. That’s a good reason to look at your shareholder protection, your will and your lease together. And if you’re saving up for a buyout, that cash is now less tax-efficient to sit on, while shareholder protection funds it from a policy payout instead.
Faster tax relief on new equipment: the main first-year allowance rises from 40% to 50% from 1 January 2027
Help for retail, hospitality and leisure in England: a bigger Small Business Rates Relief, and more support for pubs and venues, from April 2027
A bigger trading allowance: it triples to £3,000 from 6 April 2027. One thing to watch is that income protection for the self-employed is usually worked out from tax returns, so if side income is never declared, it could be harder to prove when you claim
Better share option schemes: the Company Share Option Plan becomes EMI2, with higher limits. If you’re giving employees shares, check your shareholders’ agreement and shareholder protection still match who owns what
Nothing here starts before 1 January 2027, so there’s no need to panic. But it’s a good excuse to ask yourself:
Are the shareholder protected and if so, does the protection still work under the new buyback rules?
Does my shareholders’ agreement match the protection I actually have?
Would my cover fund a full buyout, including tax and legal fees, at what the business is worth today?
Does my shareholder protection include critical illness cover?
Who does the business rely on for profit, borrowing or growth, and could it cope without them?
What debts and personal guarantees would need paying if the worst happened?
If I’m planning to sell in the next year or two, have I spoken to my accountant about timing before 6 April 2027?
Is it time to consider an employee benefits program for the team?
This Budget didn’t change the headline rates, but it did change the maths on exits, buyouts and costs. When the numbers move, it’s worth making sure the protection behind your business still fits.
Our business protection team can look over what you’ve got, talk you through how these changes could affect it, and help you put the right cover in place. We work whole of market, and we’re happy to work alongside your accountant and solicitor on the tax and legal side.
Important information: This article is for general information only and reflects our understanding of the Budget announcements on 28 October 2026. Many measures are still subject to consultation and legislation and may change. It is not tax, legal or financial advice. Tax treatment depends on individual circumstances, so speak to a qualified tax adviser before acting. The value of any business protection depends on how it’s set up, and cover is subject to underwriting.
Our business protection team can look over what you’ve got, talk you through how these changes could affect it, and help you put the right cover in place.
We work whole of market, and we’re happy to work alongside your accountant and solicitor on the tax and legal side.
Graham came to us for a second opinion on his protection. We uncovered a 17-year-old policy with unbeatable cover - one worth holding onto. Two years later, after a stroke, that legacy policy paid out £75,000 when he needed it most. The right advice. At the right time. For all the right reasons.
Twelve outdated policies. No Trusts. Then - stroke, fracture, and later, bereavement. Because Waddle restructured everything, payouts were fast, probate was bypassed, and the cover actually worked when it mattered most.
A teenage health scare, emergency surgery, and weeks in intensive care. With Waddle guiding the claim, £25,000 was paid quickly, extra support was accessed, and the family could focus on recovery - not bills.
If you or a co-owner passed away or became critically ill, who’d take over?
You’ve built it together. Shareholder protection helps make sure that if something happens to one of you, the business carries on with the people you chose, not a stranger who inherits a stake.
Already have protection in place? We believe your cover should grow with you. Our friendly Policy Check reviews what you have, highlights strengths and gaps, and gives honest, expert advice to keep your cover working its best for you.
