2026 Budget Summary

Today, Chancellor John Healey delivered his first Budget, setting out a number of measures with impacts for businesses across the UK.

Below, we examine the key announcements relevant to RCK’s service lines, including R&D Tax Credits, Energy Reliefs and Capital Allowances.

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RCK's service lines were discussed in this year's Budget. For R&D tax relief, one of the most significant announcements was the Government’s decision to remove the Claim Notification Form (CNF), reducing an administrative hurdle that has prevented some otherwise eligible businesses from making a claim. This was a requirement to pre-notify HMRC of a business's intent to claim. Without this, (or if the deadline is missed) no claim can be submitted for that accounting period, resulting in the loss of any potential benefit.

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^{R&D Tax Credits:} 

The reduced administrative burden is a welcome development. Our recently commissioned survey, which was conducted by Censuswide, surveyed 254 CFOs from R&D-active SMEs that have claimed, or considered claiming, R&D tax relief within the last five years. The research, which was featured in The Times, found that 71% of respondents believe the compliance burden associated with claiming R&D tax relief is disproportionate to the financial benefit. This was the first independent primary study of its kind and provided a comprehensive assessment of how these changes are affecting innovative businesses across the UK.
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Rufus Meakin, Senior Advisor and Brand Ambassador to RCK Partners comments on these changes:
I welcome the Government’s decision to remove the R&D Tax Credit claim notification requirement from April 2027.

Companies undertaking qualifying R&D should have a fair opportunity to access relief. The six-month deadline has caught out many eligible businesses whose accountants only identified the requirement when preparing their accounts.

I raised this issue in my recent R&D Tax Credit Insider article, “Give first-time R&D Tax Credit claimants more time” where I argued that companies needed longer and proposed extending the deadline to nine months.

Encouragingly, the Government has gone further by announcing its removal altogether, a welcome step that will remove a barrier to legitimate R&D claims.  

The announcement builds on Rufus’s previous call for the Government to reconsider the administrative burden created by the CNF. We encourage any businesses seeking more clarity to contact us to discuss the changes in relation to their specific circumstances.

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^{Energy Reliefs:}  

The Government reinforced its support to businesses and individuals with rising energy costs due to the conflict in the Middle East. Chapter 4 of the Budget sets out further detail on energy bill support for businesses. This includes funding being confirmed at Budget for the British Industrial Competitiveness Scheme (BICS) to cut electricity bills by up to 25% for over 10,000 energy-intensive businesses from April 2027.

We encourage energy intensive businesses to check their eligibility for BICS and other energy relief schemes as energy costs continue to rise.

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^{Capital Allowances:} 

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The government is maintaining stability for businesses and investment through its commitment to the Corporate Tax Roadmap, capping the headline rate at 25%, currently the lowest in the G7, and maintaining the UK’s world-leading full expensing regime.

The government has decided to raise revenue by reducing the main rate of writing down allowances by two percentage points, taking the rate to 12% from April 2027.

At the same time, the government is increasing incentives for new investment by raising the main rate First Year Allowance (FYA) from 40% to 50%

This maintains the UK’s international competitiveness, with the UK continuing to have one of the most generous capital allowance regimes in the world.

If you would like to discuss your Capital Allowances position, please get in touch.

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^{Sector Updates:} 

The Budget also included further support for several innovation-led sectors in which RCK works closely with businesses, including AI, aerospace, life sciences and defence.

The Government also announced support aimed at founders, reflecting a broader focus on encouraging entrepreneurship and investment in UK businesses.

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^{To Close:} 

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This was a significant Budget for businesses investing in innovation, energy efficiency and capital expenditure. If you would like to understand how any of today's announcements could affect your business, please get in touch with the RCK team.

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