Founders' Relief at 10% CGT: Too Narrow for Britain's 5.7M Businesses

Britain's entrepreneurs got a 10% Capital Gains Tax rate on up to £10 million in lifetime qualifying gains — and a warning that most of them may never qualify for it.

In his maiden Budget, Chancellor John Healey told the House of Commons he would give Britain's businesses the resources they need to "start, scale and build, now and in the future." For the UK's 5.7 million businesses, the package included extra finance for innovative companies, public procurement aimed at driving growth, and a new Capital Gains Tax Founders' Relief.

On paper, there's plenty to welcome. Keith Griffiths, Founder and CEO of The Entrepreneur Festival, has built and exited a business himself — and he argues incentives alone don't build companies.

"It requires confidence and an economic environment in which taking risks, creating jobs, and reinvesting capital are genuinely rewarded," Griffiths said. "My concern is that this Budget has not yet demonstrated how the Chancellor intends to deliver that."

What does the macro backdrop look like?

The Office for Budget Responsibility forecasts growth of just 1% in 2027, following 1.2% in 2026. Government debt is forecast to reach 83.2% of GDP in 2027. That keeps public finances under sustained pressure — a tough backdrop for businesses expected to innovate and invest at the same time.

Griffiths puts it plainly: people are less likely to take entrepreneurial risk if the wider economic environment doesn't instil confidence.

Who actually qualifies for Founders' Relief?

The relief offers founders a 10% CGT rate on qualifying gains up to £10 million over a lifetime. The intent, Griffiths says, is clear — reward successful entrepreneurs and encourage more people to start and grow businesses. It's a principle he strongly supports through his own company.

The problem sits in the eligibility rules:

• Requirements around UK residency and company size could exclude many entrepreneurs.
• Not every successful founder retains a 25% stake as their business develops and attracts external investment.

"If the objective is to encourage entrepreneurship, the incentive must be accessible to a broad range of founders, not a narrow group of businesses," Griffiths said.

Where is the new money going?

Healey also announced a £5 billion increase in the British Business Bank's financial capacity. Within that sits £1.4 billion for equity funds supporting high growth businesses, plus £450 million for a new venture debt product.

Griffiths welcomes the move — access to capital is one of the biggest barriers for scaling businesses. But he flags the targeting. The £450 million venture debt tranche goes to high growth companies in industrial strategy sectors that want growth finance without giving up equity. That's fine, he says, but finance needs to reach a much broader range of businesses, at every stage.

Can growth happen outside London?

For Griffiths, regional growth is one of the most important issues facing Britain's businesses. He backs the principle of "growth in every postcode" — a phrase he built his career on in the North.

His track record gives the argument weight. Griffiths founded, scaled and exited UKREiiF in Leeds, a company he says brought more than £60 million in economic benefit to Leeds and surrounding areas during his tenure, generating employment and attracting investment. He has now chosen to keep building in Leeds with The Entrepreneur Festival, backing the city and the wider Northern economy.

He supports the Prime Minister and Chancellor's commitment to growth in every postcode. But devolution, he argues, must mean more than transferring money and responsibility to local authorities. It must deliver skills, infrastructure, access to finance and — crucially — a voice for local businesses in shaping economic priorities. A business starting in Leeds, Newcastle or Sheffield must have the same shot at investment and talent as one in London.

What's missing?

The Budget contains several measures that could make a positive difference. What's absent, in Griffiths' view, is a coherent national strategy that ties them together and ensures businesses across the country benefit equally.

His list is short: better access to finance, a stronger skills pipeline, and meaningful regional devolution. Above all, closing the gaps in the entrepreneurial ecosystem.

When a founder builds, exits and starts again, the cycle repeats — more investment, more jobs, more opportunities through supply chains. Griffiths calls this virtuous cycle of reinvestment one of the most valuable drivers of economic growth.

"The Chancellor has acknowledged that Britain needs more wealth creators. I agree completely but they will not emerge simply because a batch of narrow incentives are announced," Griffiths said. Founders need to believe Britain rewards ambition and risk-taking — and until the eligibility rules and capital access widen, that belief remains the Budget's biggest untested assumption.